The D.C. City Council, concerned that local service station operators are having difficulty competing with stations in suburban Virginia and Maryland, approved emergency legislation yesterday to prevent a scheduled increase in the city's gasoline tax.
The measure, introduced by council member Betty Ann Kane (D-At Large), would freeze the motor vehicle fuel tax at the current 15.5 cents a gallon. The tax was scheduled to rise to 16.1 cents a gallon on June 1, compared to 13.5 cents in Maryland and 13 cents in Virginia.
Also, council member Hilda Mason (Statehood-At Large) introduced a resolution that would put the council on record as opposing the marketing of South African gold coins in the District, to protest South Africa's policies of racial discrimination.
Mason also said that she is drafting a bill, similar to an ordinance passed by Los Angeles, to tax or otherwise restrict the sale and purchase of South African krugerrands in the District.
"The sale, purchase and marketing of krugerrands in the United States assist in financing, shoring up and reinforcing the apartheid system in South Africa," Mason said.
The council moved swiftly yesterday to freeze the gasoline tax in response to warnings from the Greater Washington/Maryland Service Station Association and the Greater Washington Petroleum Committee that higher taxes would accelerate the departure of service stations from the District.
The number of service station operators in the city has declined by 50 percent since 1979, from 330 to 158, according to Roy Littlefield, executive director of the service station association.
"In order to remain competitive with suburban stations, dealers have been absorbing the tax differential and thereby lowering their profit margin," Kane said in a memorandum to her colleagues on the council.
According to a new American Automobile Association-Potomac survey of area gasoline prices since April 7, the average cost of gasoline in the District was $1.37 a gallon. By comparison, gasoline cost an average of $1.35 a gallon in suburban Maryland and $1.37 in suburban Virginia.
The average price of gasoline in the District usually runs somewhat higher than prices in the surrounding jurisdictions, according to Mary Anne Reynolds, the AAA-Potomac spokeswoman.
The District has the 11th-highest combined federal-state-local gasoline tax rate in the country, according to petroleum industry spokesmen. Kane said that, "Any additional increase in the tax rate to these price-sensitive small businesses could cause many more service stations to go out of business."
Washington service station operators have also complained about the costs associated with the court-ordered installation of vapor recovery nozzles on the hoses of all gasoline pumps. California is the only other state that requires the use of these pollution-control devices.
"The tax and the nozzle is why you've seen a tremendous dropoff in the gallonage figures pumped and why you're seeing the stations leaving the District," Littlefield said.
The scheduled increase in the District's gasoline tax would have generated an additional $300,000 in the current fiscal year, which ends Sept. 30, and $1 million in the coming fiscal year.
The emergency legislation approved yesterday and another bill that will require a second reading in two weeks would prohibit an increase in the D.C. gasoline tax rate for 270 days, while the council considers permanent legislation to freeze the tax.