PRESS RELEASE

TALLAHASSEE -- Florida TaxWatch today issued a report that is designed to shed light on some of the little known features of gas taxes in Florida and dispel some of the myths concerning these taxes. The report concludes that Florida's system of automatic annual gas tax increases is a deceptive and unaccountable way to treat hard-working taxpayers. In addition, the report shows the gas tax has little or no relation to the price of gas and the cost of building and maintaining Florida's roads.

Taxpayers are subject to an automatic, annual increase in motor fuel taxes that occurs without even the consideration and debate of the legislature. The report finds gas taxes have risen every year since 1990 and will continue to do so, even when the price of gas falls. Since 1992, Florida taxpayers have paid approximately $700 million more than they would have if the sales tax were based on the actual price of regular grade gas.

"We believe Florida taxpayers are getting hosed because of the automatic annual increase in gas taxes that occurs even if gas prices fall," said Dominic M. Calabro, president of Florida TaxWatch. "Further, this 'sales tax' has little or no relation to the actual price of gas."

According to Florida TaxWatch analysis:

The effective tax rate is currently over 8%, while the state "sales tax" is set at 6%. Depending on the county you live in, state and local gas taxes can be as high as 30.1 cents per gallon. The statewide average is over 26 cents - 22% of the price of gas. The state and local gas tax bite on Floridians is actually higher than recognized by actual national comparisons of state-by-state gas tax burdens. As much as 50 cents (or 43%) of the cost of a gallon of gas purchased in Florida can be attributable to federal, state and local taxes.

Since 1990, tax increases upwards of 30% have taken place with no vote and no accountability of the Florida Legislature. While Florida's state taxes on motor fuels are below the national average, Florida has the highest potential local option tax in the nation. So, when total state and local taxes are considered, Florida's maximum tax of 30.1 cents per gallon is the fourth highest in the nation. Besides Florida, nine other states have local option motor fuel taxes and eight other states subject gasoline to their state sales tax.

Despite the original stated intent to the contrary, Florida taxpayers now have a "sales tax" on gas that has little or no relation to the actual price which is indexed in a way that does not directly correlate to road building costs and provides an annual tax increase that does not have to be debated or voted on by the legislature or accountable to taxpayers.

Also, adding insult to the injury of taxpayers, the 1990 legal requirement that the Department of Transportation meet performance standards to continue receiving the multi-million dollar gas tax funding has been removed from law before it ever took effect. In retailing, this form of deception is called "bait and switch."

The Governor has rightly called for a taxpayer-friendly budget. The following recommendations would help achieve that goal. TaxWatch recommends one of the following two options:

1) a straight unit-based tax with increases voted on by the Legislature; or 2) if indexed, the tax should reflect the actual price of gas whether it rises or falls. In addition, the state should reinstate a revised accountable and consequential performance and productivity provision in law.

"This is an issue that needs to be reviewed in order that changes can be made by the Governor and legislature that will make this tax visible, understandable and accountable to taxpayers and more closely related to the cost of building Florida's roads," said Dominic M. Calabro.

This report is not a criticism of the way Florida's transportation system is managed but of the manner in which much of the revenue that funds it is raised. Adequate funding of Florida's transportation system as well as accountable and consequential productivity and performance requirements are of utmost importance to the health and well being of our state. Florida has some significant transportation challenges ahead and Florida TaxWatch has supported increased revenue for transportation, but believes it must be generated in a way that is fair, understandable and accountable to taxpayers.

For a complete copy of the report, click here: "Hosing the Taxpayers of Florida: The Truth About Florida's Gas Taxes".