[Stay on top of transportation news: .]
States Weigh Motor Fuel Tax Holidays as Pump Prices Surge
Democratic, Republican Lawmakers Pressure Governors for Short-Term Suspensions
Key Takeaways:
- Lawmakers in multiple states are proposing temporary suspensions of motor fuel taxes as gas and diesel prices rise sharply nationwide.
- The push follows Georgia’s 60-day fuel tax suspension and comes as AAA reported April 7 prices of $4.14 per gallon for gas and $5.646 for diesel.
- Governors and legislatures in states including Connecticut, Tennessee, Virginia, Florida and California are weighing whether to enact or advance similar tax holiday measures.
Legislators in several states are calling for measures to temporarily halt motor fuel taxes to alleviate the impact of rising prices at the pump for residents.
Average national fuel prices stood at $4.14 per gallon of regular gas (up 88 cents) compared with a year ago and $5.646 for a gallon of diesel (up $2.02), on April 7.
Other states are seeking to follow in the footsteps of Georgia Gov. Brian Kemp, who signed a law March 20 to suspend motor fuel taxes for 60 days. This tax break remains in effect through May 19. Per-gallon prices are now lower by 37.3 cents for diesel and 33.3 cents for gas. The temporary excise tax halt also applies to the current 33.3-cent rate for liquefied petroleum and special fuels, such as compressed natural gas.
In New York, state Sen. Michelle Hinchey (D) and 14 other Democratic senators wrote to Gov. Kathy Hochul urging her to implement a tax holiday on motor fuels.
The pointed to the Iran conflict and the closure of the Strait of Hormuz.
“Since the closure, gas has spiked to $3.94, and diesel has risen even more sharply to $5.77, used in much of our farm equipment, commercial trucking, and other key areas of our economy. This increase comes at a time when our farmers, manufacturers and other industries already face damaging input cost increases from arbitrary and disruptive federal tariffs,” the senators said.
RELATED:How Fuel Volatility Rewrites Freight Cost Models
Other state lawmakers who have discussed imposing a gas tax holiday include those in Connecticut, Tennessee, Virginia, Florida and California.
Connecticut
Both Democratic and Republican state senators in Connecticut have urged Gov. Ned Lamont to back a gas tax holiday that he apparently backed several weeks ago.
Since no such measure materialized, members of both state legislative chambers have made public their requests for Lamont to back a temporary halt in motor fuel taxes.
Image
DzԳ
On March 25, the state Senate Republican Caucus reminded the governor of his March 10 public comments in which he said the legislature should take immediate action on suspending the state’s gas tax.
“We respectfully urged the governor to schedule a meeting with legislative leaders at the earliest opportunity so that a consensus proposal could be developed in a timely manner,” the .
The same day, Democratic Senate President Pro Tempore Martin Looney and Senate Majority Leader Bob Duff urged Lamont “to implement an immediate one-month holiday on the state’s 25-cent-per-gallon gasoline excise tax, using emergency authority and contingency funds the General Assembly specifically extended to respond to federal economic disruption.”
Looney and Duff issued a joint statement that a fuel tax halt would provide relief. They encouraged the governor “to work with fuel retailers to ensure that the savings from a gas tax suspension are passed directly to consumers at the pump and not absorbed into their profit margins.”
Connecticut’s diesel fuel tax is 48.9 cents per gallon. The state’s motor fuel excise taxes are effective through June 30.
Tennessee
Tennessee Reps. Bo Mitchell and John Ray Clemmons, both Democrats, asked Gov. Bill Lee to support a gas tax holiday from April to June. The representatives in which they said motor fuel tax relief would help Tennesseans.
Image
Trucks enter Tennessee from Alabama on Interstate 65. (Jeremy Poland/Getty Images)
Virginia
In Virginia, House and Senate Republicans urged Democratic budget writers on March 27 “to provide relief to hard-working Virginia families” by suspending the state motor fuels tax for 90 days.
“Suspending the gas tax gives us a chance to provide immediate, tangible help to Virginians in the short term. If we can’t control the price of oil, the least we can do is stop taxing it for a month,” House Republican Leader Terry Kilgore said. “Every gallon of fuel Virginians buy right now includes about 32 cents in state motor fuels tax.”
They a fuel tax halt wouldn’t jeopardize the state’s “bottom line or transportation funding” since Virginia has adequate financial reserves in revenue stabilization accounts that can be used.
Florida
Similarly, Democrats in Florida have sought temporary relief from motor fuel taxes with an appeal to other state lawmakers.
“We’re sitting on billions of dollars in reserves; the least we can do for Floridians during this time of economic crisis and war is provide relief at the gas pumps. I’m proud to join my colleagues in the Florida Senate Democratic Caucus in this latest effort to make Florida more affordable,” Sen. Lori Berman said in mid-March.
The Florida Democratic Party on March 31 after he apparently “declined the requests of Florida’s House and Senate Democrats to suspend Florida’s gas tax and provide needed relief to Florida’s consumers.”
California
California legislators so far have failed to advance a proposed law, Assembly Bill 1745, to suspend the state’s motor fuel tax. It has languished in a transportation committee since it was introduced in February by Republican Assemblymember Jeff Gonzalez. The measure sought to motor fuel taxes for one year.
