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Gas tax holiday could be a potent issue in Ore. primary

07:48 AM PDT on Thursday, May 8, 2008

Associated Press

SALEM, Ore. -- Keith Bjorkman watched the digital readout on the service station gasoline pump climb inexorably higher as he filled up his truck for another business trip to California.

"Look what it cost me today -- 91 bucks," Bjorkman said with a tone of resignation in his voice.

Talk to drivers as they're filling up at the pump, and many say it'd be great if, as Hillary Rodham Clinton proposes, the federal gasoline tax were suspended this summer.

"It would be wonderful for people," said Bjorkman, a field services representative for a communications company.

Clinton's plan to suspend the 18.4 cents-a-gallon federal gas tax from Memorial Day to Labor Day could be a potent political issue in Oregon -- one of five states with presidential primaries still to be held and a place where gas prices are usually among the highest in the nation.

Her Democratic rival, Barack Obama, dismisses the gas tax holiday as a political "gimmick" that will provide only about $30 of relief to the average motorist. Other critics, including 230 economists who released a letter Monday opposing the idea, worry the tax cut would deplete the federal fund that pays for highway maintenance projects around the country.

It's a plan that has caused a split among some of Oregon's top Democratic leaders as well.

Gov. Ted Kulongoski, a Democratic "superdelegate" who is backing Clinton, said the New York senator's proposal would provide meaningful relief to families.

The governor isn't worried about the tax holiday depleting the federal highway fund because Clinton also is proposing to make up the losses to the trust fund by enacting a windfall profits tax on oil companies, Kulongoski spokeswoman Anna Richter Taylor said.

"It would have to be revenue neutral," Richter Taylor said. "The governor supports the point that middle-class families need help."

But Democratic U.S. Rep. Earl Blumenauer, a superdelegate who's backing Obama, considers it unlikely such a windfall tax would pass in Congress. He doubts consumers would see much relief in any case.

"There's a lot of bull being thrown around about a gas tax holiday," Blumenauer said in a campaign video released this past week.

Nick Shapiro, spokesman for Obama's Oregon campaign, also said Clinton has previously advocated using a windfall profits tax on oil companies to pay for a strategic energy fund.

"She's already spent the money," Shapiro said. "This is not a solution; it's an election-year gimmick."

Still, the gas tax holiday proposal found favor among motorists who showed up at a Salem filling station this week where regular gasoline was going for $3.59 a gallon.

Elisabeth Davidson, a 30-year-old Salem resident who has a 3-year-old son, said she's adjusted for the high prices by curbing the number of trips she takes around town. She only buys a limited amount of gas each time. On this day, she bought $20 worth.

"That way, it doesn't seem so bad as going 50 bucks a pop" to fill the tank, she said.

As for Clinton's gas tax holiday, Davidson said, "People are really worried about gas prices. So any way you can ease the burden would be good."

Another motorist, Dolores Johnson, said the high cost of gas already is putting a pinch on her household budget and that she's bracing for even higher costs.

"It's a Band-Aid, but we've got to do something to get relief for people," Johnson said of Clinton's plan.

Obama's disapproval of the gas tax holiday drew agreement from one motorist, bartender Charles Williams, who shelled out $50 to fill his tank.

As painful as gas prices have become, he said, Clinton's plan really would not be much help to most people.

"Clinton is talking about a short-term fix just to make people happy for a short time. It will just upset people again when the prices go up at the end of summer," Williams said.

The latest fuel price survey by Oregon-Idaho AAA indicates that gasoline prices are setting new highs almost every day in Oregon and the nation.

The organization reported Wednesday that the statewide average for regular unleaded in Oregon shot up nine cents in the past week to $3.67, making it the 11th highest statewide average in country. The national average price jumped 9.5 cents to $3.61.

AAA spokeswoman Marie Dodds said while those prices are causing consumers real pain at the pump, her organization does have worries about any plan that could reduce available funding for highway maintenance projects in Oregon.

"It doesn't offer significant relief for families, but it could have a very negative impact on the nation's roads," Dodds said of Clinton's gas tax holiday plan.

According to the Oregon Department of Transportation, the gas tax holiday would reduce federal funds for Oregon state highways by about $83 million. That could result in the delay or cancellation of some highway maintenance projects, which could result in a loss of about 1,400 jobs in Oregon, the agency said.

Clinton's campaign spokeswoman for Oregon, Julie Edwards, said those fears are unfounded because the New York senator is proposing a gas tax holiday only if it could be coupled with a windfall profits tax on oil companies.

"She would not pursue one without the other. It would be both together, and there would be no lost revenue," Edwards said.

As he filled up his car for another business trip, sales representative David Ceciliani said he's all for anything that would take at least some of the sting out of paying for gas.

"The oil companies are getting rich, and the rest of us are getting poor," Ceciliani said. "Any relief we can get is worth it."

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