Gas tax holiday, drinks-to-go, volunteer fire department aid in state’s $220 billion budget

Drivers in New York will enjoy at least a partial break from the state’s gasoline tax beginning June 1.

The state’s new budget knocks 16 cents off the price of a gallon of unleaded or diesel gasoline between June 1 and December 31. It’s part of a $220 billion budget New York’s state Legislature approved April 7 and 8.

Governor Kathy Hochul urged county governments across the state to follow suit and suspend local sales taxes on gasoline over the same period. Counties currently are allowed to cap their local sales tax at 8 cents or 12 cents per gallon, the budget provides a new option to cap the tax at 16 cents, as well.

Otsego County’s sales tax rate on gasoline currently stands at four percent per gallon, accounting for some 8 – 10 percent of the county’s total sales tax revenue according to the New York State Association of Counties.

Otsego County Board of Representatives Chair David Bliss (R-Cherry Valley, Middlefield, Roseboom) told The Freeman’s Journal / Hometown Oneonta on April 13 the county likely could not afford to forfeit such an important part of its revenue stream.

“Some counties downstate have income taxes, but sales tax and property tax are our only two sources of revenue,” he said — a concern across all counties whenever state law ‘allows’ counties to suspend sales tax on certain items. “We need to have a balance to keep a lid on property tax.”

Patrick De Hann, head of petroleum analysis at GasBuddy.com, said this week gas prices may have already peaked for 2022.

“Gas prices have continued to move in the right direction – down,” he said. “More good news is on the horizon: the national average this week will likely fall back under the critical $4 per gallon mark. The situation for now continues to show signs of improving, with the national average falling back into the $3 range as early as this week.”

[Editor’s note: This week’s commentary addresses the state’s new gasoline tax holiday: https://www.allotsego.com/a-kind-of-tax-holiday/.]

Drinks-to-go

The new budget also permits restaurants selling wine and liquor to offer cocktails to go or for delivery when accompanied by a “substantial food item” and only if sealed with a secure lid designed to prevent consumption without removing the lid or breaking the seal. Restaurants cannot sell or deliver alcoholic beverages outside of licensed hours of operation, and the price per serving must be the same as if consumed on premises.

The State Liquor Authority issued guidance on April 11 defining a “substantial food item” as “sandwiches, soups or other foods … which are similar in quality and substance to sandwiches and soups; for example, salads, wings, or hotdogs would be of that quality or substance; however, a bag of chips, bowl of nuts, or candy alone are not.”

SLA guidance continues with this warning to restaurants: “Obvious efforts to circumvent the law, for example and unreasonably small portion of soup, a serving of canned beans, a handful of lettuce, or charging a small extra fee for an alcoholic beverage in lieu of a food item not actually ordered or delivered will be treated as a violation of the law.”

Acceding to strident opposition from the state’s retail liquor stores, the budget deal allows liquor stores to open on Christmas Day and prohibits restaurants from selling entire bottles of wine or liquor to go. The state Legislature will revisit drinks-to-go in three years.

Volunteer fire departments

The new state budget allows volunteer fire departments in New York State to recover, through insurance, costs associated with ambulance transportation and services. Mr. Bliss said while the relief ‘does somewhat complicate’ Otsego County’s new paid ambulance service, the measure is important to the county’s volunteer fire departments.

“Obviously this will be a big help,” he said.

Farm laborers / tax credit

Lawmakers approved a tax credit intended to offset costs to farmers who may soon be required to pay farm workers enhanced overtime wages. The state’s Labor Department has yet to sign off on a January 2022 recommendation that would see the overtime threshold for farm workers drop from 60 hours/week to 40 hours/week over a decade-long phase-in; observers believe the new budget makes Labor Department approval inevitable.

Otsego County Assemblyman Chris Tague, long a vocal opponent to the drop in the overtime threshold, told The Freeman’s Journal / Hometown Oneonta in January he was concerned the Labor Department’s approval was inevitable, given the Governor’s State of the State proposal for the farm tax credit.

“When she started talking about increasing tax credits for farmers to offset operating costs, to me, that was a private message that the Wage Board will drop the overtime threshold.”

“It was like she was saying to the farmers, ‘Here. We’ll give you some tax credits but we’re going to increase your operating costs by 40 percent,” the Assemblyman said. “People are already paying enough. Tax credits aren’t the answer.”

Sales tax

Otsego County — and every other county in the state — still will be required to head to Albany with a plea to their state counterparts for the right to levy a local sales tax rate higher than three percent.

Governor Hochul had sought to free local governments from the need to seek and receive the state’s approval for a local sales tax rate, as long as they want to extend their existing rates or increase their rate to no more than 4 percent. As they did in prior budget negotiations, state legislators rejected the proposal, one that also would have required local governments to seek and receive temporary approval by a majority vote of the local government’s governing body in order to impose additional sales tax above the current statutory 3 percent threshold.