Some States Have Implemented ‘Gas Tax Holidays’ to Give Residents Some Relief at the Pump

Some states have suspended their state gas taxes. But is it enough—and is it a good idea?
Written by Andrew Kidd
Reviewed by Kathleen Flear
Apr 15, 2022
A number of gas tax holidays popping up across the nation could give cash-strapped
motorists
some reprieve from record-high gas prices.
As
CNET
reports, financial pressure
at the pump
is causing some states to consider cost-saving measures to provide residents with some relief when refueling their vehicles.

Gas prices still above $4 per gallon on average

According to
AAA
, national average gas prices are decreasing as more countries release emergency oil reserves. Additionally, since late March, 10 states have seen the greatest decreases in average gas price, including Connecticut (down 31 cents), Michigan (down 11 cents) and Ohio (down 11 cents). The current national average is $4.08 per gallon.
But in three states where
gas prices have skyrocketed
far above the national average, state officials have suspended fuel taxes with more than a dozen other states considering similar measures.

Which states suspended their gas tax?

Maryland suspended its 36.1-cents-per-gallon tax for a month on March 18 and is currently averaging about $3.69 per gallon according to AAA. This gas tax also applies to diesel fuel, currently sitting at
$4.60 per ga
l
lon
—and could cost the state around $100 million.
Georgia has also instituted a 10-week gas tax holiday, suspending its fuel taxes until May 31. The pause eliminates 29.1 cents per gallon of gas and 32.6 cents per gallon for diesel. Maryland’s governor, Brian Kemp, said the holiday should save residents more than $300 million at the pump. The average price per gallon of gas is currently $3.73, with diesel at $4.76.
Connecticut, previously mentioned as having the greatest decrease in average fuel price, can thank the suspension of its gas tax for that decrease. The state’s governor, Ned Lamont, signed a bill March 24 that would lift Connecticut’s 25-cents-per-gallon fuel tax from April 1 to June 30. The average gallon of gas in Connecticut costs $3.89, with diesel at $5.07 per gallon.

Is relief on the way elsewhere?

Several other states are debating measures that would give drivers some relief from high gas prices, which have driven a rise in
fuel thefts
in some areas.
Michigan politicians have proposed suspending the state’s gas tax, a move opposed by Gov. Gretchen Whitmer. Whitmer has proposed temporarily suspending the state’s 6% sales tax on gas—which would drop the price per gallon by about 25 cents—while other state politicians hope to suspend it for a whole year. Michigan’s gas prices average about $3.91 per gallon, with diesel at $4.88, per AAA.
California is planning to give residents a
$400 rebate
on gas taxes to every household with up to two California-registered vehicles after failing to suspend the state’s 51-cent gas tax. 
Ohio officials are considering reducing the state’s gas tax by about 10 cents per gallon. In a less conventional move, Chicago’s mayor plans to distribute $150 gas cards and $50 vouchers for public transit via lottery later in April.
Efforts are underway to suspend the federal gas tax—18.3 cents per gallon for gas and 24.3 cents per gallon for diesel—with a majority of lawmakers supporting the bipartisan
Gas Tax Relief Act
.

Is it a good idea?

Probably not. As
CNET
reports, current gas taxes already aren’t enough to keep up with the rising cost of maintaining infrastructure—and could make the problem worse by not doing anything about the nation’s reliance on an unreliable oil supply. It’s also possible that oil producers will raise the price of oil to negate any savings by motorists.
An analyst interviewed by CNET mentioned that a federal gas tax holiday alone could cost the nation $20 billion, which means less funding for roads, highways and bridges—something that could put the economy at risk.
Additionally, infrastructure funding from gas taxes is already being threatened as more drivers opt for
electric vehicles
.

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