D.C. Mayor Marion Barry said yesterday he may recommend repeal of the city's three-week-old 6 percent tax on gasoline sales after being shown figures that the levy is sharply cutting service station business.
Barry stressed that if he does so after receiving and studying official figures, he will recommend some other new tax that would still reap the $13 million a year that the gasoline levy was predicted to yield.
A delegation of D.C. gasoline retailers, voicing distress at their losses, met with the mayor and handed him a survey taken by their trade association showing that business dropped an average of 38 percent at a cross-section of stations in the week after the new tax was imposed. Some stations near the Maryland line reported losing more than half their business. s
While some District of Columbia service stations reported that 65 percent of their customers between 4 and 6 p.m. formerly drove cars with Maryland tags, the survey showed that only 10 percent are now Marylanders.
Service station operators just across the D.C. line in Maryland also reported to the association that they are experiencing a surge of customers driving cars with D.C. tags. About one out of every three cars now comes from Washington, which some stations operators said was a substantial increase over the period before the tax was imposed.
One Maryland operator, Tom Reidy, who operates an Exxon station on Georgia Avenue, just south of the Capital Beltway in Silver Spring, estimated that his sales will increase 30 percent this month. To meet the demand, he said he has extra gasoline allocations from both Exxon's and the State of Maryland's reserve supplies.
Ironically Reidy's cousin, Harry P. Murphy, who operates an Exxon station in Washington at Rhode Island Avenue and North Capitol Street, reported losing 32 percent of his business since the tax was imposed. "We swapped customers," Reidy quipped.
Gasoline generally costs at least 10 cents a gallon less in Maryland than in the District of Columbia because Maryland had kept its taxes at a lower rate. In Virginia, where taxes were also recently increased, gasoline tends to be about 3 cents, a gallon cheaper than in D.C.
The new 6 percent District of Columbia tax on the pump price of gasoline went into effect Aug. 6 after a brief court-ordered delay, adding an average of 8 cents to the cost of a gallon. The pump price already includes a D.C. gasoline tax of 10 cents a gallon and a federal tax of 4 cents.
The new gasoline sales levy was part of a package of six new or increased taxes proposed by the mayor and approved by the City Council designed to reduce this year's budget deficit and to bring next year's city budget into balance.
City finance officials had estimated that the gasoline sales tax would cause a 16 percent drop in sales, but would still yield $13 million in new revenue during the fiscal year starting Oct. 1.
The new survey taken by the Greater Washington-Maryland Service Station Association, which had vehemently opposed the new tax, showed a drop in sales at D.C. stations close to the 40 percent the association had predicted when lobbying City Council members against adopting the measure.
After meeting with Victor Rasheed, executive director of the association, and eight dealers attired in oil company uniforms, Barry emerged and told reporters that if the gasoline business losses proved to be true, he would "recommend a change combined with a (new) tax" designed to keep the city solvent next year.
Barry said he would wait to make a decision until after Sept. 20, when the city's 240 gasoline stations must file their returns for the first month of the tax with the D.C. Department of Finance and Revenue.
Edward M. Meyers, deputy finance and revenue director, said the city actually would suffer loss of tax revenue if gasoline business drops off permanently by 45 percent. If the dealers survey figure of 38 percent persists, he estimated the city would gain only $3 million annually in new revenue.
James Jackson, who operates an Amoco station at 1244 South Capitol St., carried figures into the meeting with the mayor showing that in the first 16 days of the new tax, his gasoline business dropped 51.4 percent -- to 44,017 gallons during that period, compared with 90,535 gallons during the same days in July.
A calculation based on those sales figures showed Jackson's station would have collected $9,053 in gasoline tax during the 16-day period in July, but only as estimated $7,922 in both the gasoline tax and the new gasoline sales tax during the same period in August -- a tax loss of $1,131.
Jackson said he also has lost a significant part of his sales of motor oil, automotive accessories, and cigarettes, all of which provide tax revenue to the city, but he could provide no figures. Jackson also said he was forced to lay off four of the 16 employes at the two stations he operates. The other station, on Alabama Avenue SE, suffered somewhat smaller business losses, he said.
The survey taken by the dealer's organization covered 40 of the city's 240 stations, mainly in the central city, Rasheed said.
In the first week of the new tax, Kim's Arco station on Central Avenue SE, near the Prince George's County line, lost 58 percent of its business -- from 8,557 gallons in the comparable week in July to 3,605 gallons this month. Van Ness Texaco, on Connecticut Avenue nearly two miles from the Montgomery County line but on a major suburban commuter route, also said it lost 58 percent of its business -- from 17,729 gallons to 7,517.
The survey showed that the city's service stations have laid off 242 workers, and the association said another 336 are likely to lose their jobs if the sales loss continues. The survey also showed that the city may be losing as much as $1,080 a day in sales taxes from reduced purchases of motor oil and accessories.