State lifts gas-tax break By Niki Kelly The Journal Gazette INDIANAPOLIS - Hoosiers have until midnight to reap the last of the savings at the gas pump.

The state's 5 percent sales tax on gasoline goes back into effect at 12:01 a.m., and gas stations are expected to add the 5- to 7-cent cost back into the price immediately.

"The governor has done all he can do under the statute," said Cheryl Reed, spokesman for Gov. Frank O'Bannon.

Relying on a 1981 law, O'Bannon declared an energy emergency in June and suspended the sales tax for 30 days.

He extended the suspension several times, citing continued shortfalls in crude oil in the nation and the Midwest.

The emergency can only last 120 days.

During the time of the suspension, Reed said Indiana residents saved $40 million at the pumps.

Before the suspension, the state took in more money than expected because of the high prices. That gave the state a windfall of about $34 million, leaving the general fund with a net loss of about $6 million.

Reed said O'Bannon will not declare another emergency because Indiana doesn't meet the economic trigger of the statute any longer. The law requires an economic disadvantage for the state when compared to the rest of the country.

When O'Bannon first declared the emergency, prices in Indiana and the Midwest were nearing $2 a gallon.

But prices in the Midwest have aligned with the rest of the country now, Reed said.

According to AAA's fuel-gauge report, the national average Tuesday for a gallon of regular unleaded gas was $1.57. Indiana's price was $1.51.

Fourteen states were below Indiana.

Republicans have called the suspension an election ploy, and indeed O'Bannon has used the tax break while on the campaign trail and in a TV commercial.

There is no telling what effect the return to normal prices will have on the election, which is less than two weeks away.

Republican gubernatorial challenger David McIntosh is hoping voters will see the gas-tax suspension as an example of how shortsighted O'Bannon's administration is.

"Instead of working to find a long-term solution, he chose to play politics," McIntosh spokesman Rob Collins said.

Collins said an example of a long-term solution is permanently ending the sales tax.

He said the state would take an initial economic hit, which would be replaced by people crossing borders to buy gas or locate companies in the area.

"The job of the governor is to look long term instead of fixing it for 120 days," Collins said. "That's what leaders do. They plan."

PUBLISHED WEDNESDAY, OCTOBER 25, 2000

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-- Martin Thompson (mthom1927@aol.com), October 25, 2000