Across the country, many drivers are struggling with historically high gas prices.
Before the Russian invasion of Ukraine, fuel prices were already on the rise and the war only pushed them even furtherr.
The United States, which is not a major importer of Russian energy resources, has banned imports to put pressure on President Putin’s regime in the hope that he will abandon his efforts in Ukraine. To offset the impact of the shortage, President Biden announced that over the next six months, one million barrels of oil will be released from the country’s strategic reserves every day.
At the state level, governments are propose and pass laws provide direct assistance to residents. These proposals vary considerably from one fuel tax holidays like those seen in Connecticut, Georgia and Maryland for direct cash payments like in New Mexico. Additionally, various states aiming to increase ridership of public transit systems have reduced fares by as much as seventy-five percent to give commuters more options that don’t involve using their car.
Laws passed to offset rising fuel prices
Connecticut is one of three states to pass a bill eliminating state gasoline taxes to offset rising costs to consumers. The suspension will be in effect until June 30, and lawmakers hope that this decision”provide some relief to consumers in the face of rising prices due to a number of international dynamics and market instability that go far beyond our state.”
In addition to the tax relief, the state also eliminated “tariffs on statewide public buses during this same period. »
Governor Brian Kemp announced that beginning in April, Georgia will suspend taxes on gasoline until May 31, to relieve the inhabitants. While signing the bill, Governor Kemp also said the state would also “return money to Hardworking Georgians through a tax refund and an income tax reduction. More details on this refund have not yet been released..
Like Connecticut and Georgia, Maryland also suspended state gasoline taxes. However, this tax holiday lasts only until April 18.
“That’s for sure, not a panaceaand market instability will continue to cause price fluctuations, but we continue to use all the tools at our disposal to provide relief to the people of Maryland,” Gov. Larry Hogan said during the signing of the bill.
Going forward, Governor Hogan would like to see the state legislature eliminate the automatic gas tax increases which are part of the law of the State of Maryland.
Which states provide direct payments or checks to residents?
Those who reside and pay taxes in Idaho will receive a check for $75 or twelve percent tax they paid to the state in 2020. If the latter is greater, that amount will be sent and if it is the former, the taxpayer will receive $75.
In December 2021, Indiana Governor Eric Holcomb proposed that the the eligibility requirements to receive a payment of $125 be expanded to those who have no declared income. A bill to send these payments was passed earlier in the year, in light of increase in inflation after the state had a historic budget surplus.
In February, the minimum income was abolished, widening access to more than 400,000 residents in the state. Those who have not yet received their check should receive it before May 1.
A bill passed in New Mexico on April 8 “will automatically send Payments of $500 to single registrants and $1,000 to joint registrants.” No action is necessary to claim the payments.
Payments will be sent in July and August and no action is required to claim payment. The passage of the bill came after Governor Michelle Lujan Grisham had asked lawmakers to return to the capital for a special session to relieve soaring gas prices. The Staet will also take steps to lower the price of public transport as petrol prices reach record highs in parts of the state.
What proposals are circulating in the states?
States with Gas Tax Suspension Proposals
The governors of the two Alaska and Florida have proposed gasoline tax suspensions in their state.
Alaska Governor Mike Dunleavy proposed in mid-March that the state “suspend tax collection on mautomotive and marine fuels, aviation gases and jet fuel until June 30, 2023. While Florida’s Ron DeSantis offered a five-month suspension in November, before the Russian invasion began. No legislature has adopted this proposal.
States with proposals to send direct payments
Governor Gavin Newsom announced at the end of March that he would send a proposal to the state legislature that would call for sending $400 checks to households with cars. There would be a two-car limit, but no income requirement to receive checks. If the bill passes, the checks could be sent as early as July.
Golden State leaders are also proposing a seventy-five percent reduction in fairs for transit systems in a bid to increase ridership.
In January, when inflation rose steadily and Hawaii ran a budget surplus Governor David Y. Igedavid proposed that the Legislature “issue refund checks for $100 for each taxpayer and for each dependant.”
“In this way, we will also inject $110 million reinjected into our economywhich also gives it a boost,” Governor Igedavid said during the announcement.
State Senators, all Illinois Democrats surprised their House colleagues and the Governor when they passed a bill that would include a Stimulus check of $100 for most taxpayers and $50 for each dependent.
The bill also includes other controversial elements such as a $300 check for owners reduce their property tax bill as well as a suspension of taxes on gasoline and groceries.
In a press release, Senator Elgie Sims said the bill aims to “reduce soaring gas and grocery prices and give people the relief they need.”
The bill’s chances of passing are yet to be known, but Republicans were quick to call the Democrats’ decision a stunt and say they were just bending in an election year.
In late March, the Kentucky Senate passed legislation that, if approved by the House, would send a one-time payment between $500 and $1,000 to households to compensate for the increase in inflation.
Governor Janet Mills of Maine proposed a budget bill in March that would provide “$850 relief checks to Maine residents in the face of record inflation and rising oil and gas prices caused by the invasion. of Ukraine by Russia”. This represents a modification of the budget after taking into account the impact that rapid price changes have on households across the state.
The one-time $850 payment would be sent to about 800,000 state taxpayers, matching a proposal made by Republicans in the weeks before the governor’s announcement.
Which governors have expressed opposition to the removal of gasoline taxes?
Governor of Alabama Kay Ivey said she was not in favor of cutting state gasoline taxes because it would hurt the state economic outlook. Many governors have taken a similar stance in hopes of seeing federal gasoline taxes reduced or eliminated to reduce costs for their state’s residents without decline in their own income.
“You see the crisis on our shelves, the crisis of shortage of supply. Under President Trump, you could go buy gas and not have to hold your breath. Now, prices are skyrocketing almost day by day. Right now, President Biden is in charge. »
It’s a common refrain of republican leaders but the point is negated if one considers how the economic and business environment has changed since Donald Trump was president. Russia hadn’t invaded Ukraine, the pandemic was still raging, and with demand still low, there was much less pressure was placed on international supply chains.