Following Gov. Brian Kemp’s lead, the Georgia House began moving Wednesday on a proposal to suspend state fuel taxes as metro Atlanta gas prices reach record highs.
A House tax subcommittee backed the plan that would suspend the 29.1 cents-a-gallon motor fuel taxes through May 31. Based on previous years’ collections, the move would save drivers about $400 million in taxes.
The House Ways and Means Committee is expected to pass it Thursday, and then the full chamber will likely quickly take up the measure.
The proposal was put into House Bill 304, a bill originally meant to give tax breaks to medical and pharmaceutical manufacturers. Those tax breaks passed last year in another bill. The new HB 304 will have to move fast, since legislation in most cases has to pass at least one chamber by Crossover Day on Tuesday to remain alive for the session.
Politicians in both parties have staked their positions to suspend gas taxes at both the state and federal level as Russia’s invasion of Ukraine seems certain to send gas prices to new heights. President Joe Biden on Tuesday banned imports of Russian oil, gas and coal to punish dictator Vladimir Putin’s “vicious war of choice,” a decision that roiled the energy market.
The average price of a gallon of regular fuel in metro Atlanta reached $4.27 on Wednesday, higher than the crest reached in the aftermaths of Hurricanes Katrina and Rita, according to GasBuddy, a fuel-tracking service.
Motor fuel funding pays for road and bridge projects. The governor’s office said state surplus funds would be used to make up for the lost gas tax money.
Kemp said the fuel proposal wouldn’t jeopardize his plan to refund $1.6 billion of surplus state funds to Georgians when they file their taxes this year. Legislation allowing the refund is a Senate vote away from going to Kemp’s desk for his signature.
“Because of our strong, fiscally conservative budgeting, I’m confident we will be able to provide relief to hardworking Georgians — both in the form of a tax refund and lower gas prices,” said Kemp, who faces a tough battle for a second term.
The governor’s proposal quickly earned the support of House Speaker David Ralston, Lt. Gov. Geoff Duncan and other legislative leaders.
“In these extraordinary times, every little bit helps, and we remain focused on keeping our people and our economy moving,” Ralston said.
Democratic U.S. Sen. Raphael Warnock, who, like Kemp, is up for reelection this year, has made his proposal to suspend the 18.4 cents-per-gallon federal gas tax until 2023 a staple of his message on the campaign trail. The Democrat promoted the plan just after qualifying for office and touted it during a recent visit to a Sandy Springs gas station.
Before Russia’s invasion, Republicans mocked Warnock’s proposal as a “cheap distraction.” But Warnock tied his plan to other efforts to combat rising inflation, including his demand that Biden launch a federal investigation into “apparent price gouging” by global shipping carriers.
“It’s important to emphasize while (drivers) are seeing record prices, oil and gas companies are seeing record profits,” he said. “So it’s really important that we hold these oil and gas companies accountable, and that’s something I’m determined to do.”
