Georgia’s governor has again suspended state taxes on gasoline and diesel, declaring a legal emergency over higher prices.
Signed by Gov. Brian Kemp’s executive order Tuesday morning. The tax suspension, which is 31.2 cents per gallon on gasoline and 35 cents per gallon on diesel, will begin Wednesday and last until October 12.
The government of Georgia provided almost $1.7 billion in revenue during the previous suspension over 10 months, from March 2022 to January 2023, about $170 million a month.
Georgia can quickly pay the money, which is usually used for road construction. Not only is the rainy day account full, but there is approximately $10 billion more surplus in state accounts. The state could also have another multibillion-dollar surplus in the budget year that begins July 1, unless revenues fall sharply.
The move also allows Kemp to change the political conversation in the state, which has been consumed by the Fulton County grand jury indictment of former President Donald Trump and 18 others for trying to overturn the results of the 2020 election in presidency of Georgia. . Kemp rejected attempts to retaliate against the prosecutor in that case despite protests from the most pro-Trump elements of the Republican Party, highlighting the divide between Kemp and the forces.
The return of the gas tax allowed Kemp to continue talking about his tax reduction efforts. He says they are an attempt to help Georgia residents fight inflation, although most economists say putting more money in consumers’ pockets will actually lead to higher prices. Inflation has generally been declining in the United States in recent months. Inflation data for August showed that overall consumer prices rose 3.2% from a year ago. That’s up from a 3% annual increase in June, but well below last year’s high of 9.1%.
Kemp campaigned successfully on gas, income and property tax cuts in his 2022 re-election victory, comparing himself to Democratic President Joe Biden.
“From running up federal spending to policies that undermine domestic energy production, all Bidenomics has done is take more money out of the pockets of the middle class,” Kemp said in a statement. on Tuesday accompanying the executive order declaring a state of emergency. “As high prices continue to weigh on household budgets, Georgia workers deserve real relief.”
Kemp has told state agencies they can propose more spending with Georgia’s surplus funds, but Tuesday’s action shows bigger tax cuts may be Kemp’s favorite way to absorb the surplus. money. It also shows the continued political power of gas prices, even as Kemp devotes state efforts and incentives to recruiting electric vehicle manufacturers to Georgia.
Under state law, Kemp has the power to continue suspending taxes as long as state lawmakers approve the action at their next meeting. The previous suspension was originally approved by lawmakers, and Kemp extended it seven times while campaigning against Democrat Stacey Abrams.
House Speaker Jon Burns expressed support for the measure on Tuesday, meaning Kemp likely has the legislative support he needs to approve the tax break. Lawmakers are scheduled to meet in January.
“I applaud Governor Kemp’s suspension of motor fuel taxes to keep our people moving and our economy moving despite Washington’s inaction on rising fuel prices,” said Burns, a Republican from in Newington.
The order suspends the tax on wholesalers and is likely to take several days to reach retailers who sell fuel to drivers.
As of Tuesday, Georgia drivers paid an average of $3.57 per gallon for unleaded gasoline, according to the motor group AAA. That’s the 11th lowest among states and below the national average of $3.84. The average price of diesel in Georgia is $4.35 a gallon.
Gasoline prices in Georgia are higher than the $3.24 that drivers paid a year ago. Prices increase to $4.50 a gallon by June 2022.
Pump prices also include federal taxes of 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel.
Domestically, AAA said last week that gasoline prices fell even as Saudi Arabia and Russia extended oil production cuts until the end of the year in a move that pushed up prices.