As prices fall, Kemp is set to extend gas tax break until mid-September

Gov. Brian Kemp is expected to suspend the state sales tax on motor fuel for another month, state officials say, with plans to soon sign an executive order that would extend the break through Sept. 12.

The Republican has used each announcement to extend the tax break to blame Democrats for high gas prices and promote his efforts to provide relief at the pump as he faces a rematch against Stacey Abrams this year. He’s expected to announce the extension Wednesday.

Continuing the tax break, which was set to expire Aug. 13, has broad bipartisan support even as fuel prices drop. The governor signed a law in March that cleared the Legislature with the backing of most Democrats and Republicans to allow him to suspend the gas tax through May, and he’s since announced extensions each month, benefiting from a wave of media coverage each time.

Abrams has called on Kemp to go a step further and announce he would suspend the 29.1 cents-a-gallon state tax through 2022 to help Georgians struggling with rising inflation and higher gas prices. And she rolled out ads at fuel pumps highlighting her stance.

U.S. Sen. Raphael Warnock, a Democrat up for election in November, has also pressed Congress to implement a federal gas tax holiday. His opponent, Republican Herschel Walker, has called that proposal a “gimmick” that would do little to bring down prices in the long run.

Credit: Greg Bluestein

Credit: Greg Bluestein

Each extension deprives the state of roughly $150 million a month in tax revenue used to finance transportation projects, such as road construction and bridge maintenance. Kemp’s office has used the state’s surplus and higher tax revenue to plug the gap.

State Democrats have embraced the tax breaks to counter GOP attacks blaming President Joe Biden’s economic policies for higher fuel prices. Energy prices have soared amid economic uncertainty worsened by Russia’s invasion of Ukraine.

“We have to remember we are here because of a crisis,” economist Heather Boushey, a member of the White House Council of Economic Advisers, said in an interview.

“The reason that gas prices are high in the U.S. and around the world is in large part because of Vladimir Putin’s unprovoked war in Ukraine,” she said. “Something like a gas tax holiday can be a short-term solution to ease the pain.”

After a prolonged upward tear, gas prices have been on decline in recent weeks, though economists are wary the trend could reverse.

The average price for a gallon of gas in the U.S. on Tuesday was $4.19, according to AAA. In Georgia, the price was $3.74, down from $4.33 at the same time last month. The price was even lower in some South Georgia cities, including Albany and Valdosta.