State-Level Gas Relief Measures: A Snapshot of Policy Responses Across 17 States

State-Level Gas Relief Measures: A Snapshot of Policy Responses Across 17 States

As Americans grapple with record-high gas prices, state governments across the nation have responded in various ways to help consumers at the pump. While federal efforts to address fuel costs have been limited, a number of states have taken action through legislation or executive orders that suspend or reduce gas taxes. As of September 23, this approach has been implemented in several states with differing degrees of success and duration.

"Most of the savings from gas tax holidays are passed on to consumers," said Adam Hoffer, director of excise tax policy at the Tax Foundation. "We would expect around 80 or 90 percent of the rate cut to manifest in the form of lower prices for drivers, with the rest of the savings going to suppliers and producers."

Gas prices have remained elevated over recent weeks, with the AAA national average reaching $4.74 per gallon for regular gasoline and $6.52 for diesel as of Wednesday. These figures represent increases of 11 cents and 21 cents respectively since last week, and 38 cents and nearly 90 cents over the past month. In a politically charged environment with midterm elections less than 50 days away, fuel costs are becoming an increasingly significant factor in voter decision-making.

States With Relief Enacted This Year

Several states have taken immediate action to provide relief through executive orders or legislative enactments. These efforts reflect the growing pressure on state leaders to respond directly to consumer concerns while balancing their own budgetary constraints.

Georgia

In Georgia, Governor Brian Kemp declared a state of emergency and suspended the motor fuel excise tax from March 20 through June 2. The suspension effectively lowered gas prices by approximately 33 cents per gallon during that period. However, the measure expired at the end of its designated window and has not been renewed.

Illinois

Illinois enacted a public act on June 16 that suspended a scheduled Consumer Price Index (CPI) adjustment to the motor fuel tax rate set to take effect July 1. This action effectively froze the tax rate through December 31, providing relief during a critical time when consumers are feeling the pinch of rising costs.

Indiana

Governor Mike Braun in Indiana suspended both the gas excise tax and usage tax, saving nearly 60 cents at the pump per gallon. This measure is currently set to remain in place through October 5, though it has been extended multiple times since its initial implementation.

Kentucky

Kentucky Governor Andy Beshear froze the gas tax scheduled for January of next year and declared a state of emergency that reduces gas prices by 10 cents per gallon. This move demonstrates how states are taking preemptive action to cushion consumers from anticipated increases.

Utah

Utah reduced its state gas tax by 15 percent, effective through December 31. This temporary measure reflects a commitment to offering some relief while maintaining long-term fiscal stability.

Pending Legislation and Proposals

In addition to enacted policies, several states are considering or have introduced legislation that would suspend gas taxes for varying periods. These pending actions suggest a broader trend of political attention on fuel costs as an electoral issue.

Ohio

Ohio legislators are reviewing a proposal put forth by Republican gubernatorial candidate Vivek Ramaswamy to suspend the state's gas tax for 90 days. If passed, this measure would offer substantial savings to drivers, especially given Ohio's higher-than-average gas tax rate of 38.5 cents per gallon.

Massachusetts

Massachusetts lawmakers are evaluating a proposal from Governor Maura Healey to suspend the state's 24 cent gas tax for two months. While the executive branch has made an initial move, approval by the state legislature is still required for implementation.

"Both Ohio's and Massachusetts' proposed gas tax suspension would translate to temporarily lower fuel prices for drivers," said Hoffer. "Ohio's gas tax is greater (38.5 cents per gallon (cpg) for gasoline) than Massachusetts' rate (24 cpg), so the savings to drivers would be greater in Ohio."

Proposals Discussed but Stalled, Rejected or Opposed

Not all efforts at gas relief have succeeded. In some states, proposals have either failed to advance through the legislative process or faced political opposition. For example:

• Arizona: A gas tax holiday bill stalled in the Senate.
• Alabama: A similar proposal died in committee.
• California: A bill was also defeated.

Meanwhile, states like Connecticut, Florida, Maryland, New York, Pennsylvania, South Carolina, and West Virginia have discussed various forms of fuel-tax relief but have not yet enacted statewide changes. These examples highlight the uneven approach to addressing fuel costs across the country, often reflecting state-level priorities, political dynamics, and fiscal considerations.

What Does Gas Tax Pay For?

Gas taxes are primarily used to fund transportation infrastructure projects such as road construction, maintenance, and repair. These funds are critical for maintaining safe and efficient public roads. However, suspending these taxes can create significant budgetary challenges for states.

In Maryland, Democrats rejected a proposal that would have saved consumers money at the pump but would have created a $100 million deficit in the state's transportation fund. This case underscores the difficult trade-offs involved when considering gas tax relief measures.

"The biggest downside is that these tax cuts will create a crater in the transportation budget," Hoffer noted. "Nearly all fuel tax revenue funds road construction and maintenance. Cutting the primary revenue stream for roads means that states will either need to cut back on transportation projects, or more likely, need to backfill those missing revenues from other state revenue sources."

What Happens Next?

As midterm elections loom, gas prices and state relief efforts are likely to remain a central focus of political discourse. Some states may extend existing measures, while others may continue to debate new proposals.

In Indiana, where the current gas tax suspension is set to expire soon, legislators may consider extending the relief period to provide continued support for drivers. For states like Ohio and Massachusetts, discussions are ongoing as both parties seek to address voter concerns before the midterms.

These policy responses illustrate how local political priorities can shift in response to public demand. Whether these measures will translate into meaningful savings for consumers or merely serve as electoral tools remains to be seen. What is clear, however, is that gas prices continue to play a pivotal role in shaping political outcomes and public sentiment.