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Hoosiers Loved Themelves a Gas Tax Holiday for 120 Days in 2000

May 02, 2008 5:09 PM

As Sens. Hillary Clinton, D-NY, and John McCain, R-Ariz., square off against Sen. Barack Obama, D-Illinois, on a gas tax holiday for the summer -- McCain introduced his legislation in April; Clinton is introducing her bill today; Obama says it's a "gimmick" that offers voters pennies and no long-term solutions -- some Hoosier history may be in order.

Eight years ago, with what were then perceived to be soaring gasoline prices -- more than $2 a gallon for premium gas -- then-Indiana Gov. Frank O'Bannon suspended Indiana's 5 percent sales tax on gas, saving Hoosier motorists between seven and 10 cents per gallon.

"Spiraling gas prices have really caused an undue burden on the people of Indiana," O'Bannon said in June 2000.

O'Bannon used a 1981 statute that enabled him to declare a state of emergency and suspend the tax for up to 60 days. He said he'd reinstate the gas tax before the 60 day period ends if prices went down. If prices continued, he had the option to extended the tax suspension another 60 days.

"Gas prices in the state are causing an undue burden to the people of Indiana," he said. "I consider this an emergency."

Oh -- did I mention O'Bannon was up for re-election?

By July Indiana had the lowest gas prices in the country -- approximately $1.42 per gallon. But O'Bannon said there was no plan to lift the suspension.

"What do we know about next week, will there be a shortage then?" asked an O'Bannon spokeswoman. "We don't know. We're looking at this as a long-term effort."

By August, the suspension had cost the state -- but not consumers -- more than $22 million. O'Bannon renewed the gas tax holiday for another 60 days.

By September, political analyst Charlie Cook had written that "Indiana Momentum is clearly on the side of the Democratic incumbent, Frank O'Bannon, as this much-hyped race moves into its final stages...O'Bannon's decision to suspend the state gas tax for 60 days has resulted in glowing press."

On October 26, 2000, the five percent sales tax resumed.

In November, O'Bannon won.

Indiana GOP chairman Mike McDaniel attributed the gas tax suspension as one of the three reasons the Democrat was re-elected.

Oh -- did I mention that in July 2002, O'Bannon signed into law a 3 cent increase of the state gas tax?

-- jpt

May 2, 2008 | Permalink | Share | User Comments (96)

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Washington DC doesnt get to vote in the general elections, but today Clinton promised the island of Guam that they would get to vote in the general if they vote for her tomorrow and she is elected. She will say ANYTHING to get elected, and wont deliver on any of it. It is never going to happen that a territory gets the vote ahead of Washington DC.

Posted by: bruce becker | May 2, 2008 9:59:56 PM

Clinton is all talk. She told Guam today that she will get them the right to vote in the general election if they elect her.
How, exactly? They are not a state.

And how, exactly, would she pass a tax on oil companies to make up for the rise in prices after she cuts the gas tax? It wont happen.

She is full of empty promises.

Posted by: bruce becker | May 2, 2008 9:57:49 PM

Obama is a cunning and terrifyingly dangerous politician.

Barack says he won't throw his pastor under the bus like he did his grandmother, and then he did.

Barack says he's against the war but NEVER ACTUALLY VOTED AGAINST IT because he wasn't in office then. And then he VOTED YES TO FUND THE WAR.

Barack says he won't wear "that pin" on his clothing but then he is trying to say that he stands for it (when really he wants to switch it to something else).

Barack says he wants to be the #1 patriot in America and yet when the National Anthem is played, he doesn't put his hand on his heart(as if the song doesn't apply to him) - must be because it is the song of the "old ways" of America(which he wishes to destroy), the ways that hundreds of thousands have died for along the way.

Barack boils up some cursing and completely politically-reactive racial speech, tries to make us all feel deficient, says Don Imus should be burned at the stake and flushed in a toilet, and then turns around and says "Race is not a problem in America"(because that would trick people into thinking he doesn't hate).

Barack says he's a uniter but then devotes 20 years of his life to his "Mentor" and "Role Model" that has burned the very hate of America into his heart - see this video: search google with the key term:
obama shocking audio
( also see more great stuff at: thatsmeontheleft.blogspot.com )

Barack says all people should count and "yes we can" but then he purposely, and cold-bloodedly stone-walls any chance of allowing 2+ MILLION voters in Florida and Michigan have their vote count.

Barack says he's about "helping the working class live better lives" and then he turns around and slanders us not only by calling us "bitter" and "clinging to guns and religion", but also forgoes offering a Universal Healthcare Plan(which is a core democratic value) - this is only so he can play both sides of the poor/rich fence, but in the end he leans more towards the former(with his ridiculous idea to raise capital gains taxes).

Barack says he has all these ideas for how he's going to throw our government out of their offices onto the street but there's no detailed information available for people to weigh his intentions with common sense.

Everything is about timing for Mr. Barack Obama, he plays "old style" politics better than a symphonic orchestra, he'll switch from one major idea and then to the reverse like a windsock in an open field.

How long will it be before Barack throws the "American People"(as if we're somebody else) under the bus, and then back up for another go.

Think long and hard, this man is playing the emotion card on America, and he intends to rip our heart out with it to pay back for his Pastor's pain of yesteryear.

If you vote for Barack Obama, you will experience change alright, and it will hurt, like a dull blade being forced into your back.
If you vote for Barack Obama, you will experience the Apocalypse of America.

Posted by: The Stark Truth | May 2, 2008 9:56:18 PM

What does it mean to practise the virtues in politics? It is, quite simply, engaging in practices for the common good in the public sphere. It does not rely on a virtuous leader to look up to, or that fights for you, but one who like Obama, by engaging in these practices, helps unleash an equal creative capacity in others.

Hope and courage are more than crucial republican virtues: they are the very engine that encourages others to join a common endeavour that can take on powerful opponents. And this dynamic creates a great deal more than particular benefits for individual citizens. It recognises that they themselves possess the ultimate liberty: the political liberty of designing their common future. Is it any wonder Obama is so wildly appreciated by the powerless, by people across parties, and especially by the younger generation of Americans?

Another attribute of republicanism is that once this common process is initiated, creative answers to obstacles do not emerge only from the strategy room at the top of the campaign but also from a much larger arena of action, where organised structures at every level constantly produce new solutions. This prevents the only-my-ideas mistakes that permeate the Bush office.

Posted by: bruce becker | May 2, 2008 9:55:31 PM

OK who is telling the truth here Kantor or the guy who made the movie? Two different stories -----

Kantor today told the Huffington Post that he "was talking about the polling and not the people." The film’s director, D.A. Pennebaker, said in an interview with the Politico that, "he says they must be s—ing in the White House."

Posted by: Oscar Meyer | May 2, 2008 9:18:56 PM

KevinJ, why blame liberals for this economy. You can thank George Bush for that.

Posted by: erin | May 2, 2008 8:58:14 PM

Great work Jake. Hope you do well in your career at ABC News. It's time the media starts reporting all news rather than just the liberal spin.

When liberals drive the price of everything up, it hurts the poor the most (e.g. no oil production in the U.S., not using nuclear power as France does, over-regulating, pandering to unions, being funded by trial attorneys, and on and on).

Posted by: Kevin J | May 2, 2008 8:52:20 PM

With a tax break like that, thousands of trucks will save money on tens of thousands of gallons of gas, when carrying daily necessary goods to stores. It sure will also help lower the consumer goods prices a bit. Not just 30$ for car owners. Just a thought.


Posted by: Optimist | May 2, 2008 8:48:30 PM

Is my vote worth 30 dollars? oh my i forgot i am supposed to be stupid.

Posted by: sacks | May 2, 2008 8:46:25 PM

give me your vote and i will give you 30 dollars worth of gasoline. Do not forget though your 30 dollars for 3 months will make a father/mother/daughter/son loose a job, foreclosure, loose mediacl and above all you will pay it back later twice.

Posted by: sacks | May 2, 2008 8:44:23 PM

Here's an idea. RAISE the federal gas tax and rebate the extra tax revenues to vehicle owners in equal amounts. (Perhaps truckers should get larger checks than car owners.) The higher pump price will encourage us to finally wean ourselves from foreign oil supplied by thugs like
Chavez in Venezuela and the Saudi princes. The rebate checks will help motorists to pay the higher pump price. Those who drive high mileage vehicles and/or limit their annual miles driven will GAIN in disposable income.

Posted by: Richard from NH | May 2, 2008 8:43:54 PM

With a tax break like that, thousands of trucks will save money on tens of thousands of gallons of gas, when carrying daily necessary goods to stores. It sure will also help lower the consumer goods prices a bit. Not just 30$ for car owners. Just a thought.

Posted by: Optimist | May 2, 2008 8:42:43 PM

These are not just our opinions these are the facts. Read the paper listen to the news and the economists. It would hurt the country. Most of us are hurting because of the economy thanks to George Bush. But the gas tax is a bad idea. It's Hillary's way of getting you to vote for her. Plus there is no guarantee the we would even see any savings. So what would the point be. It's all pandering. Hillary should be ashamed of herself for doing this.

Posted by: lisa | May 2, 2008 8:34:03 PM

Thank you Justin. Too bad no one actually reads the posts that are truthful. Or maybe they do but they just don't get it. They have no idea how it would affect the country. They just want a reason to call Obama an elitist

Posted by: lisa | May 2, 2008 8:23:25 PM

Obama pack your suitcase and go home to your children.... they need you more than we need you. Hilliary 08!!

Posted by: Diane | May 2, 2008 8:20:00 PM

Amazing! How can Clinton take advantage of the blue color workers by playing with illitracy? If you take the tax a way, steel workers, road maintanance workers,etc will be laid off. Because we can not build bridges, our roads will become a disaster meaning we will spend more to repair them than it would to maintain. However, i think Mrs Clinton is confused. Do we need a Clinton or Bush family to run this country for 1/2 a century?

Posted by: sacks | May 2, 2008 8:19:01 PM

Now we see chiming in from people who didn't get the point of the article. The 2000 gas tax holiday was shameless pandering that ended up costing people more in the long run. Worse yet, the Clinton-McCain proposal is a production tax, not a sales tax. Most of the savings on a production tax won't get passed on to consumers even during the holiday period. There's just no incentive for the oil companies to further spike demand. Instead they'll eat the profits and smile.

Then we have Obama's votes for the gas _sales_ tax holiday in Illinois, which he actually refers to in his stump speech. Of course, the important point is that he's seen the real impact of a gas tax holiday in Illinois. That's why he knows it's a bad idea that will hurt people in the long run. Clinton apparently lack similar experience in her eight years of elected service.

Finally, there's no way that Clinton could get a tax holiday bill through Congress this summer, if ever. Honestly, this is the most disgusting display of panderring yet this election season.

Posted by: Justin | May 2, 2008 8:17:41 PM

OBAMA HAS BEEN CAUGHT AGAIN IN HIS DECEPTIVE POLITICAL ADS: Fact Check: Obama and the gas taxes. SPRINGFIELD, Ill. (AP) — Democratic Sen. Barack Obama accuses his presidential rivals of pandering to voters by supporting the "gimmick" of temporarily lifting federal taxes on gasoline, despite his own past support for a similar tax holiday. As a state legislator voting for a tax break, Obama even joked that he wanted signs on gas pumps telling motorists that he was responsible for lowering prices. Most experts criticize the idea of a federal tax suspension, but Obama's political opponents accuse him of flip-flopping and ignoring the financial pain caused by today's rising gas prices. THE FACTS: In 2000, gasoline prices were climbing quickly, reaching $2 a gallon in the Chicago area — a remarkable price back then. Illinois legislators scrambled to offer some election-year relief to angry motorists. Obama voted three times for a tax holiday. The version that ended up becoming law required a six-month suspension of the state's share of the sales tax on gasoline, a 5 percent tax paid directly by consumers rather than gas stations. It also required gas stations to post signs on their pumps saying that the Illinois General Assembly had lowered taxes and the price should reflect that cut.

Posted by: Fred | May 2, 2008 7:57:15 PM

Now the label latte liberal is appropriated with Obama and his supporter. They are willing to shell out millions to help end the world hunger, but not willing to shell out couple dollars to make the avg Joe feel a little better.
Like it or not, this is the perception of avg American. Sorry to say, but this time the Obama camp is lost. They may be right as an economist, but for a politican, it is a lost.
Regardless of the benefit/ cost of the proposal the average people want a president who care about their daily struggle. Whoever said is pandering to the voter is bad is just not wise enough politically.

Posted by: maleasiansomker | May 2, 2008 7:49:10 PM

It would get me to work for three weeks. That may not seem like much to an elitist but to most people it would be a big help.

Posted by: Tina from Florida | May 2, 2008 7:46:06 PM

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