AutoNation head proposes gas hike

Published 5:00 am Thursday, June 22, 2006

The chief executive of a major auto dealership chain recently suggested an additional hike on gas taxes to curb America’s appetite for fuel, an idea that has spurred mixed reaction in Central Oregon.

Mike Jackson, CEO of Florida-based AutoNation Inc., told several major publications this week that a 10-cent gas tax increase annually for 10 years would change American consumers’ fuel-consumption habits and curb the country’s dependence on foreign oil.

The tax idea would culminate in an additional $1 for every gallon of gas by the end of the 10-year period.

”What Mr. Jackson is saying is that, by raising the gas tax, we’re going to change consumer habits,” said Marc Cannon, AutoNation’s vice president of corporate communications. ”And manufacturers will change what they make (to use alternative energy like ethanol) because manufacturers make what consumers want.”

The idea of even higher gas prices irked some Central Oregonians, who are paying as much as $3.13 per gallon of regular gasoline this week.

”I don’t see where that would help,” said Scott Mueller, 55, of Bend. ”People are already curtailing their car use at $3 (per gallon). I know I am.”

Mueller, who’s in the real estate business, said any additional hike in gas prices would set off inflation in many industries, including shipping, farming and construction.

”I think a lot of people rely on gas, people like the shipping companies,” he said. ”If gas prices go up, so do shipping prices, and there’s that inflation monster again. So don’t do it. I won’t pay it.”

There are those, however, who think Jackson’s idea is a good starting point of discussion.

Cylvia Hayes, executive director of renewable energy advocacy firm 3EStrategies in Bend, would rather see the government remove subsidies to the oil industry to place it at a level playing field with alternative fuel sources. She is glad Jackson raised the issue, however.

”It’s exciting that people are starting to raise hard questions like this,” Hayes said, adding that taxpayers are already subsidizing oil exploration to keep the gasoline price at current levels. ”The era of cheap gas is gone. We need to make it overtly painful (in terms of fuel costs) because it is already covertly painful.”

Oregon currently charges 24 cents per gallon in taxes, unchanged since 1993.

Steve O’Toole, executive director of the Oregon Petroleum Association, said it isn’t likely that more taxes will be levied on gas anytime soon.

”It’s just not realistic,” O’Toole said, noting that the public outcry on prices is already high. ”That is without looking at what the public is willing to accept.”

But AutoNation’s Cannon said that might not necessarily be the case. According to Cannon, a New York Times poll showed 55 percent of respondents were willing to accept an additional gas tax if it was part of an overall energy policy.

”It seems that the American public is ready to embrace (the idea of additional gas taxes),” he said.

Bend resident Paul Dudley, 75, said such an idea would severely impact lower-income individuals who cannot afford to buy fuel-efficient vehicles and must drive to work. Dudley said he would be surprised if Jackson’s idea takes flight.

”There’s no doubt it would bring consumption down,” said Dudley, a retired petroleum geologist. ”But I would guess that few, if any, politicians would vote for that.”

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