Committee for a Responsible Federal Budget President Maya MacGuineas discusses Democrats pushing to suspend the gas tax and the country seeing a teacher shortage.
Several states are taking steps to temporarily roll back gasoline taxes in hopes of providing some relief for Americans who are experiencing surging prices at the pump.
Prices for a regular gallon of gas were $4.25 nationwide on Monday, according to AAA, up from $2.82 one year ago but down slightly from last week’s level.
The sky-high gas prices have roots in the faster-than-expected economic recovery from the pandemic, which has triggered the hottest inflation in decades amid strong consumer demand, an influx of government stimulus and disruptions in the global supply chain.
RUSSIA INVADES UKRAINE: LIVE UPDATES
But in recent weeks, the war between Ukraine and Russia has sent global prices even higher as it impedes the world’s access to energy supplies. Brent crude, the international benchmark, climbed above $111 a barrel on Monday as European Union nations considered joining the U.S. in banning Russian oil imports and as Russia-Ukraine talks appeared to yield no signs of success.
A car passes a gas station sign in Annapolis, Maryland, on March 14, 2022, as record high gas prices hit working-class Americans with inflation already surging. (Jim Watson/AFP via Getty Images / Getty Images)
One Wall Street analyst estimated that higher fuel prices could cost the average American household an extra $2,000 per year.
Here’s a look at the measures some states are taking to alleviate the financial pressure on drivers:
California
California Democrats floated a proposal last week that would send a $400 rebate to every taxpayer in the state, regardless of whether they drive.
FED RAISES INTEREST RATES FOR FIRST TIME IN 3 YEARS, PROJECTS 6 MORE HIKES AS INFLATION SURGES
The plan comes amid mounting pressure on California lawmakers to address sky-high prices at the pump, one week after gasoline costs hit another record. California, as is usually the case, recorded the highest gas prices in the nation, with the cost per gallon hitting $5.85 on Monday – well above the national average. In some counties, the average price is as high as $6.47 per gallon.
Gas prices, all over the $5-per-gallon mark, are displayed at a gas station in Rancho Cordova, California, Monday, March 7, 2022. (AP Photo/Rich Pedroncelli / AP Newsroom)
During a press conference, Assembly members who introduced the bill argued the rebate is a better option than temporarily suspending the 51-cent-per-gallon gas tax because it provides recipients more leeway in how they use the money. They suggested they want the money to go out as soon as spring.
California Gov. Gavin Newsom, a Democrat, has previously expressed support for alleviating the pain of rising gas prices by waiting to implement a 5.6% tax hike scheduled to take effect on July 1. But an analysis from LAO found it would only save drivers about 3 cents per gallon. Newsom’s office has also floated the possibility of a rebate that could go toward residents with cars registered in California.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Separately, California state Republicans introduced a bill in January that would immediately suspend the gas tax in response to the surging prices and backfill the projects from the state’s $45 billion surplus, but the proposal failed to secure enough votes.
Georgia
Georgia Gov. Brian Kemp, a Republican, signed a bill into law on Friday that temporarily pauses the state’s 29.1-cent-per-gallon gas tax until May 31.
A driver putting 12 gallons into a gas tank would save $3.49 under the tax holiday. Georgia’s average gas price was about $4.11 on Monday, slightly below the national average. Kemp said the legislation would help to “ease the burden that consumers are feeling at the pump.”
Georgia Gov. Brian Kemp speaks during a ribbon-cutting ceremony for the Mason Mega Rail Station at the Garden City Port Terminal on Nov. 12, 2021, in Garden City, Georgia. (Sean Rayford/Getty Images / Getty Images)
“Though we can’t fix everything Washington has broken, we’re doing our part to lessen the impact on Georgians’ wallets,” he said in a statement.
Still, experts have warned the break could take several days before it begins to filter down to consumers. That’s because the motor fuel tax is an excise tax imposed on the sale of gasoline, meaning that it’s paid by distributors – not directly by consumers.
Gas stations have already paid the tax on fuel they ordered before the suspension took place; it’s unclear when the untaxed fuel will begin to reach pumps.
“It’s not an immediate relief,” Montrae Waiters, spokeswoman for AAA, told the Atlanta Journal-Constitution.
Maryland
Maryland suspended its 36-cent-per-gallon tax on Friday for one month in order to offset swollen prices. The emergency bill that Gov. Larry Hogan, a Republican, signed urges gas station owners to immediately pass along the savings at the pump.
Someone filling up a 12-gallon tank would save about $4.32 under the freeze.
“As we continue to stand in solidarity against Russian aggression in Ukraine and as Marylanders face the impact of surging inflation with the average price of gas rapidly rising, this bipartisan action will provide some relief from the pain at the pump,” Hogan said at the signing ceremony. “This, of course, is not going to be a cure-all.”
Virginia
Virginia Gov. Glenn Youngkin, a Republican, has called for a three-month suspension of the state’s 26.7-cent-per-gallon gasoline tax.
“These rising gas prices are hurting Virginians, and we need to do something about it,” Youngkin said in a statement. Like other Republicans, Youngkin has blamed the Biden administration for contributing to higher prices by enacting policies that have “constrained” the country’s supply of domestic oil.
