Pumping the debate
States weigh whether high fuel cost justifies suspending their tax
Fuel transport truck driver Terry Bowden refills a gas station March 30 in Nashville, Tenn.
A Chevron gas station displays gas prices March 23 in Alameda, Calif.
ENERGY | GAS PRICES
With the average price of a gallon of gas topping $4 nation-ally, some federal and state officials discussed temporarily reducing motor fuel taxes to provide relief to motorists.
So far, Georgia and Utah are the only states to suspend all or part of their gas taxes as the war in Iran pushed fuel prices higher. Others are considering it but there are a variety of reasons that policymakers may not relax gas taxes, including concerns about government finances, doubts about the action's effectiveness and uncertainty about how long the war will last.
Here's a look at the debate by the numbers.
2 states
The two states to suspend gas taxes this year took significantly diff erent approaches.
Georgia's 60-day suspension of its 33-cent-a-gallon gas tax took eff ect when Republican Gov. Brian Kemp signed it into law March 20, the first state to act since the war started.
Three days later, Republican Utah Gov. Spencer Cox signed a law temporarily trimming 6 cents off the state's 38-cent-agallon fuel tax. However, that six-month reduction won't begin until July 1.
38 cents
Retail gas stations charged consumers an average of 38 cents per gallon above wholesale prices over the past five years, according to Jeff Lenard, a spokesperson for the National Association of Convenience Stores. Their profits after expenses often are less than half that, he said. Meanwhile, the daily price for a barrel of oil swung dramatically during the war — sometimes by the equivalent of about 40 cents a gallon, he said.
Those numbers highlight the complexity of setting gas prices. When a gas tax is suspended, motorists may not see an equivalent reduction in retail prices.
That made Florida Gov. Ron DeSantis hesitant to repeat a gas tax suspension he approved when prices last spiked in 2022. "Our ability to influence the fuel prices are really marginal at best," the Republican said in March, adding: "I don't think the consumer really felt relief."
61 cents
California charges a nationally high gas tax of 61 cents per gallon, with additional fees on top of that. The tax contributes to California's highest-inthe-nation gas prices, which averaged $5.89 a gallon April 1, according to AAA. Several Democratic and Republican gubernatorial candidates called for suspending the gas tax but the proposal didn't gain traction in the Democratic-led Legislature, where some are concerned about how to make up for the lost revenue.
$100 million
Republicans in Maryland pushed for a 30-day gas-tax suspension but the Democratic-led General Assembly rejected their attempts. A spokesperson for Democratic Gov. Wes Moore said a onemonth suspension could have blown a $100 million hole in the state's transportation budget after officials already cut spending and shifted money to make up for a projected shortfall in the state's overall budget.
A better approach would be to end the war, said Moore spokesperson Ammar Moussa, adding: "The best way to bring prices down is to address the source of the pain."
Since the war began Feb. 28, President Donald Trump repeatedly said it could be over soon while also threatening to widen the conflict.
$330 million
Whether states have the money to make up for lost fuel taxes is a pivotal question. Georgia will dip into its surplus.
In Connecticut, Democratic state Senate leaders suggested Gov. Ned Lamont could tap into the approximately $330 million in an emergency fund meant to respond to federal government actions to help off set a proposed one-month suspension of the state's 25-cent-a-gallon gas tax.
"The fund was created precisely for situations like this: when federal actions create hardship for Connecticut families," Senate President Pro Tem Martin Looney and Majority Leader Bob Duff said in a statement.
A spokesman for the Democratic governor said Lamont is willing to work with lawmakers on "a smart and strategic pause to the state's gas tax."
$800 million
Gas taxes generally pay for building, expanding and repairing roads and bridges. Unless funds are shifted from elsewhere, suspending a gas tax means less money for transportation projects, including some that already may be budgeted.
In South Carolina, the state gas tax provides about $800 million yearly, helping to fund almost $7 billion in projects ranging from safety improvements on two-lane roads to a massive overhaul of interstate interchanges.
Republican Gov. Henry McMaster worries that major projects would take longer and cost more if tax revenue were cut. He dismissed the suspension of gas taxes as a "sort of knee-jerk reaction."
"We'd like them all to be lower and lower," he said, "but that's one we should not take any money out of."
