Stateline Story

Gas Prices Hit State Fleets, Consumer Wallets

  • May 28, 2004
  • By Kathleen Murphy

Jeff McCormack helps oversee 15,000 state-owned sedans, vans and trucks in South Carolina where the average gas price, $1.89 per gallon, ranks lowest in the nation. But even in the land of "cheap" gas, McCormack is siphoning money from the vehicle maintenance budget and putting off new car purchases this year to boost the fuel budget.

"We didn't anticipate gas prices going off the charts like they have," McCormack said. "The state will do its job and fulfill its mission. How we go about that may be impacted."

South Carolina is relatively lucky in that it has the lowest gasoline prices in the nation. California has the unenviable distinction of having the highest average price, $2.36 per gallon. Prices have soared to $2.32 per gallon in Oregon, $2.30 in Washington and Hawaii; and $2.29 in Nevada. Just behind South Carolina in the lowest price-per-gallon tier are Alabama, Texas and Wyoming, where gasoline goes for $1.93, and in Oklahoma, where motorists pay $1.92 on average.

The American Automobile Association's Daily Fuel Gauge Report tracks average prices state by state.

Soaring fuel prices have prompted a California Senate committee to investigate possible price gouging. In Florida, Attorney General Charlie Crist Tuesday opened an antitrust investigation and issued subpoenas to oil companies.

The high cost of gas is fast becoming a political issue. Ten Democratic governors wrote President Bush this month demanding that the federal government investigate why gas price increases have risen so rapidly. Govs. Jennifer Granholm of Michigan, Ruth Ann Minner of Delaware, Joseph Kernan of Indiana, Thomas Vilsack of Iowa, Kathleen Sebelius of Kansas, Janet Napolitano of Arizona, Bill Richardson of New Mexico, Bob Holden of Missouri, Gary Locke of Washington, and Jim Doyle of Wisconsin signed the letter.

Conservatives, too, seek action on gas prices. The American Legislative Exchange Council, a group that promotes limited government and devises model legislation, wants states to repeal their gas taxes temporarily.

"States and the federal government should be considering what they can do in the short term to relieve the pressure on gas prices for consumers. We understand that a lot of times gas taxes are tied to money for roads and transportation spending, but no option is perfect. We think when gas prices get as high as they are now, and when government considers what it adds to gas prices in terms of taxes, I don't think it's unreasonable to consider temporary relief," said Chris Atkins, director of ALEC's tax and fiscal policy task force.

The gas price explosion has prompted various kinds of legislative action:

  • Florida will offer an eight-cent break on its 16-cent gas tax throughout August.
  • Republican members of the New York Assembly are urging that the Empire State's 33-cent gas tax be suspended for the summer.
  • Pennsylvania Rep. Peter Daley, D-Donora, suggested cutting the 27.3-cent gas tax in half for six months, but Gov. Ed Rendell told the Pittsburgh Post-Gazette on Wednesday he opposes a gas tax suspension.
  • Bills introduced in North Carolina's House and Senate would cap part of the state gas tax that rises with wholesale prices, a portion of the state's 24.5-cent gas tax that is adjusted twice a year. Virginia, Oklahoma and Nebraska lawmakers rejected gas tax increases this year.

A handful of states Florida, New York, North Carolina, Pennsylvania and Wisconsin have seen gas tax rates go up since last July. Kentucky's gas tax will rise a penny to 11 cents a gallon on July 1 because the average wholesale price per gallon exceeded an $1.11 price trigger set by law in 1980. In Utah, House Speaker Marty Stephens told the Salt Lake Tribune he favors raising the 24.5-cent gas tax to pay for road construction.

Some energy industry analysts explain the upturn in prices as a conflict between weak supply and large demand. In order to save money by reducing dependency on oil consumption, a few states are in the early stages of using fuel-efficient or hybrid vehicles.

Maine Gov. John Baldacci (D), for example, last year set miles-per-gallon targets for vehicles in the state fleet by executive order. California, Oregon and Washington are banding together to purchase fuel-efficient vehicles in an initiative aimed at reducing greenhouse gases, said Therese Langer, transportation program director for the American Council for Energy-Efficient Economy, a non-profit energy efficiency organization.

A 2002 study of a dozen states' fleets by the American Council for Energy-Efficient Economy showed that states could save at least 10 percent of their fuel bill by switching to energy-efficient vehicles.

South Carolina's State Fleet Management office encourages carpooling and combining errands in vehicles used for state operations. An executive order issued by Gov. Jim Hodges (D) requires using alternative fuels such as ethanol when possible.