Georgia Gov. Brian Kemp has suspended his state’s gasoline tax for one month as prices at the pump continue to increase.
Kemp cited high fuel costs and persistent inflation when he declared a legal state of emergency last week and signed an executive order suspending Georgia’s 31.2 cents-per-gallon tax on gas and 35-cents-per-gallon tax on diesel through Oct. 12.
Kemps’s office said the move would provide direct relief to families in the state who’ve seen the price per gallon at the pump increase 33 cents in just a year.
“While high prices continue to hit family budgets, hardworking Georgians deserve real relief and that’s why I signed an executive order today to deliver it directly to them at the pump,” Kemp said in a statement.
The gas tax was similarly suspended last March by state lawmakers and extended by the governor through December before being reinstated, costing the state in total around $1.7 billion in fuel revenues, according to official figures.
While overall revenue collections dropped in August, $181.6 million of the state’s total tax collections for the month came from the reinstated gasoline tax according to Georgia’s Department of Revenue’s monthly report.
The total of $2.28 billion in taxes collected by the state throughout the month of August marked a year-over-year decline of $25.4 million; officials noted declines across several major income streams, including a 103% decrease in corporate income tax revenue,a 10% decrease in net sales and use tax earnings, and a 5.2% decrease in individual income tax revenues.
While year-over-year monthly revenue decline amounted to around 1.1%, minus the now suspended fuel tax, that drop was closer to 4.8%, the report said, adding that earnings adjustments will be reflected in next month’s revenue report.
Municipal bond analyst Joseph Krist wrote in his Muni Credit News publication on September 18 that revenue loss from the latest suspension of the fuel tax suspension is estimated to amount to around $170 million for the month.
“Under state law, Kemp can keep suspending taxes as long as state lawmakers ratify the action when they next meet,” Krist said.
Kemp’s decision comes as the benchmark price for oil hit a 10-month high this month.
A normalization of energy markets may still be some way off; according to the International Energy Agency’s September Oil Market Report, global oil demand is expected to rise while production declines, “locking in a substantial market deficit” for the remainder of the year.