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Gas prices: Will a gas tax suspension happen?

Gas prices are out of control and lawmakers are looking at ways to fix it.

Three states across the United States have already suspended gasoline taxes to deal with inflated prices.

The National average price for a gallon of gas was $4.25, according to AAA. That’s down slightly from record highs that were reported a week earlier. In New York drivers pay around $0.48 per gallon in local and state taxes.

gas prices skyrocket lawmakers consider gas tax suspension

There’s a problem, though. That price is $1.63 higher than it was a year ago, and $0.63 higher than one month ago. The sudden jump in gas prices has left many American families feeling the pinch.

Gas tax: Last fall NY Dems wanted to add a new 55 cent tax on fuel

Will a gas tax reduction be included in the state budget?

Gov. Kathy Hochul said last week that it’s possible New York’s upcoming budget includes relief for motorists. It could come as a gas tax suspension — much like the one being debated in California — or in form of a rebate check.

It’s unclear how that would be implemented in each case.

What states have paused gas taxes due to higher costs?

Maryland, Georgia, and Connecticut have paused all or parts of gas tax. It’s an effort to put money back in consumers pockets — as inflation skyrockets across the U.S.

Here’s a look at what that looks like specifically:

Georgia’s General Assembly voted to pause the state’s gas tax until May 31. That removed nearly $0.30 per gallon off the table. When Gov. Brian Kemp signed the bill the average gallon of gas cost that much more.

Connecticut moved forward with a bipartisan bill temporarily lifting the state’s $0.25 gas tax through June 30. 

Maryland dropped it’s $0.36 per gallon gas tax for 30 days. That runs through mid-April. It’s unclear if they will extend the pause on gas tax collection further.

Will the federal gas tax be suspended?

Last month Senate Democrats introduced the Gas Tax Relief Act, which would pause the federal collection that equates to approximately $0.18 per gallon. For diesel it would be approximately $0.24 per gallon. 

Several governors urged lawmakers to pass that bill, which would have paused the gas tax collection through January 1, 2023.

As for the American people — nearly three-quarters of the population wants to see gas taxes suspended. Politico reported that 73% of Americans want to see gas taxes suspended.

What happened to Democrats’ bill to increase gas tax in New York?

Before gas prices began soaring some Democrats in New York wanted to see a new, more aggressive tax on fuel. 

Last fall the Climate and Community Investment act would add a $0.55 tax on every gallon of gas sold in New York. It was part of the state’s broader efforts to reach climate change goals over the next decade.

“New York’s out-of-control Democrat supermajorities enacted a state budget this year raising taxes by nearly five billion dollars and they’ll just keep looking for more. It will be an unending search for more tax dollars to afford more spending and every taxpayer will pay the price at the pump, to heat homes, and in a lot of other places. The ink on the new state budget was barely dry and the Democrats were already eyeing their next tax-hike opportunities, including a potential fifty-five-cents-per-gallon gas tax to help generate revenue to implement an unsustainable, impractical climate change agenda,” Sen. Tom O’Mara said at the time.

Without the adding tax New York will collect around $2 billion in gas taxes.

Does lowering taxes reduce gas prices?

Experts say that suspending gas taxes or creating a ‘holiday’ for them creates economic challenges.

They have warned in recent weeks that waiving gas taxes could drive up demand too quickly, which would result in prices increasing anyway.

“They may not lower consumption and they might increase it,” Patrick De Haan of GasBuddy recently told ABC News. De Haan serves as head of petroleum analysis for the gasoline app.

Elected leaders say they are simply doing what they can do help constituents as gas prices increase as spring continues.

Categories: NewsNew York State