Saratoga County Cuts Fuel Tax as Gas Prices Keep Setting Records

BALLSTON SPA — As Capital Region gasoline prices set another record Wednesday, Saratoga County moved to give motorists a little relief at the pump.

County supervisors voted to opt in to the tax break the state is allowing counties to offer. The move will take effect June 1 and save consumers several cents per gallon through Dec. 31.

The pennies will add up: County officials estimate the cumulative savings for motorists this year will equal $4 million if gas prices remain in the $4-per-gallon range. 

“That’s a sizable savings across the county,” said Moreau Town Supervisor Theodore T. Kusnierz Jr., chairman of the Board of Supervisors.

That also means a $4 million drop in revenue to the county, but officials say the revenue projections for 2022 were drawn conservatively. Sales tax revenue so far is significantly higher than projected, and should make up for the loss.

AAA reports that regular unleaded gasoline averaged a record $4.59 per gallon in the Albany-Schenectady-Troy area Wednesday. That compares with $4.20 a month ago and $2.98 a year ago. 

The price of diesel fuel, which factors into so many aspects of commerce, has surged even more: It averaged a whopping $6.45 a gallon Wednesday, up from $5.06 a month ago and $3.08 a year ago.

As part of the budget process concluded last month, New York state decided to cut its fuel tax by 16 cents a gallon from June 1 through Dec. 31. It also authorized counties to implement cuts of their own. 

Schenectady County took that step in late April, and Saratoga County followed Wednesday, with a 21-1 vote.

Savings will vary for consumers.

Saratoga County currently taxes fuel at the same rate as other sales, at 3 cents on the dollar. On June 1, it will effectively switch the tax on fuel to a flat 6 cents per gallon. 

So the motorist saves 9 cents per gallon if each gallon costs $5, or 12 cents if the gallon costs $6. If gas suddenly drops to $3 a gallon, the savings will be only 3 cents per gallon.

Supervisor Tara Gaston of Saratoga Springs, who cast the only vote against the tax break, said she objected to the lack of public input and questioned the need for speed. 

Kusnierz said the board had to act by May 16 to get the cut in place by June 1; if it missed the window, the cut could not take effect until the start of the next sales tax quarter, on Sept. 1.

Gaston also asked what fiscal impact cutting the fuel tax would have on the county.

Multiple factors are at play there: Sales tax revenue so far in 2022 is exceeding both the 2021 total and the budgeted 2022 amounts. But county government itself is paying more for fuel. The cost of summer highway projects alone is expected to climb almost $1 million because of this.

But all told, the finances should even out, Saratoga County Manager Steve Bulger said.

Edinburg Supervisor Jean Raymond said she would support the tax cut, but reluctantly, because there’s no way to guarantee or even check that motorists will actually see the benefits: Retailers could raise prices by a few cents a gallon and cancel out the savings.

“Your point is well-taken,” Kusnierz said, adding that he’d spoken to the largest fuel distributor in the county about that scenario. The distributor, which he didn’t identify, was confident that motorists would see actual savings.

The subject of environmental and economic justice didn’t come up at Wednesday’s meeting.

In March, a coalition of environmental, poverty, transit and good-government advocacy groups urged the state not to grant a gas tax holiday, saying it would benefit the wealthy because they drive more than the poor, and would remove an incentive to drive less and pollute less.

Saratoga County is one of the wealthier counties in upstate New York, and its residents are heavily dependent on cars because so much of the county is suburban or rural.

It’s also a solidly Republican county, both in voter enrollment and elected leadership. 

Clifton Park Supervisor Phil Barrett framed the tax cut as a small step within the larger context of decisions made by Democrats in Albany and Washington. 

“I think there’s some merit in the consideration that every little bit helps,” he said. “Really, the only initiative that can have a dramatic effect on the price of energy is changing the energy policy both on the federal and state side of things.”

Whether New Yorkers drive fewer miles as fuel prices climb higher remains to be seen.

Data from multiple federal agencies suggest that Americans take their foot off the gas pedal when the economy is slumping, but not necessarily when gas prices are soaring.

Annual miles driven in the United States nearly tripled from 1970 to 2020, increasing each year except during the recession of 1973-1975, the malaise and recessions of the late 1970s and early 1980s, the small recession of 1990-1991 and the Great Recession of the late 2000s, with lingering after-effects well into the 2010s.

The steepest drop of all, however, was February 2020 to February 2021, when COVID limited travel and commuting.

Miles driven then increased every month from March 2021 to February 2022, the last month for which data are available — even as fuel prices skyrocketed 50%.