Orange County lawmakers reject gas-tax relief as fuel prices climb

Orange County motorists will keep paying the full 3.75 percent sales tax on gasoline after the Legislature rejected a temporary cap at a special meeting in Goshen, leaving drivers in Middletown, Newburgh, Goshen and across the county to absorb higher pump prices on their own.

The proposal would have limited the county’s tax on motor fuel and diesel motor fuel to gasoline priced at $3 a gallon, taking effect June 1 and expiring March 1, 2027. Supporters said Orange County was on track to collect more than $3.5 million in additional gas-tax revenue this year because fuel prices climbed after the 2026 budget was drafted, when prices were much lower. Stephen Hunter said the average driver would have saved about 85 cents per fill-up, or roughly 4 cents a gallon at a $4 pump.

The measure failed 9-8, short of the 11 votes required, with four legislators absent. The lawmakers voting no were Barry Cheney, Thomas Faggione, Peter Tuohy, Glenn Ehlers, Paul Ruszkiewicz, Janet Sutherland, Robert Sassi and Kathy Stegenga, all Republicans. Sutherland said she was following the wishes of town supervisors and mayors in her district and called the cap a short-term fix. Stegenga argued that lowering the gas tax would not reduce the overall burden, only shift it onto local property owners. Orange County Executive Steve Neuhaus said some opponents believed the savings would not have been large enough to make a meaningful difference.

The county was already out of step with several neighboring governments. Dutchess, Ulster, Putnam and Rockland counties had each approved temporary gas-tax caps, and Hunter warned Orange County risked losing drivers and revenue to those counties if it stood still. The debate landed in the middle of a broader budget squeeze: county officials have also been dealing with a sales-tax overdistribution error that could leave local governments facing a combined shortfall of nearly $20 million in 2026. County budget documents show the 2026 budget projected $412,339,869 in sales-tax revenue, including $109,459,969 for distribution to municipalities, a pressure point that helped explain why some lawmakers refused to surrender any more revenue even as fuel prices kept climbing.