Kemp to sign bill suspending gas tax after Senate approval

Gov. Brian Kemp says he will quickly sign a bill suspending Georgia's fuel tax through May after the state Senate voted 55-0 on Thursday to approve the measure.

Lawmakers sent House Bill 304 flying through the General Assembly in nine days after the Republican Kemp first proposed the measure March 9. The measure earlier passed the state House 150-0.

Katie Byrd, a spokesperson for Kemp, said he could sign the measure into law as early as Friday.

Georgia's gasoline price includes a federal tax of 18.4 cents per gallon and a state tax of 29.1 cents per gallon. A number of cities and counties also charge taxes. Federal taxes on diesel fuel are 24.4 cents per gallon, while Georgia's tax on diesel is 32.6 cents per gallon. The measure would also abate Georgia's taxes on aviation gasoline, liquefied petroleum gas and other fuels including compressed natural gas.

"The 29 cents is not going to completely solve the problem, but it's a start and it's a statement," said Senate Finance Committee Chairman Chuck Hufstetler, a Rome Republican. "It will have to be filled in from the rainy day fund, but it's raining a big storm right now."

It could take some time for consumers to see relief, because gas stations now are selling fuel they were taxed on at the wholesale level.

Sen. Jen Jordan, a Sandy Springs Democrat, asked whether the bill guarantees consumers will see the decreases. Hufstetler said laws against price gouging should provide some protection.

Suspending collections could cost the state up to $400 million that would be used for road building and other transportation projects. The Kemp administration plans to use part of the roughly $1.25 billion in leftover surplus from the last budget year, beyond $1.1 billion in state income tax refunds, to cover any gap in transportation funding. Kemp could also dip into the state's $4.3 billion rainy day fund.

Byrd said Kemp could extend the tax break via executive order that would have to be ratified later by lawmakers. Kemp abated gas taxes in 2021 during a pipeline shutdown, and Byrd said former Gov. Nathan Deal had suspended gas taxes multiple times.

Democratic U.S. Sen. Raphael Warnock of Georgia has already been advocating for the federal government to suspend collection of its gas tax, responding to discontent over rising fuel prices.

Both Kemp and Warnock are running for reelection this year.

Hufstetler, like other Republicans, said President Joe Biden's hostility to oil drilling is to blame for part of the price increases. Republicans also blamed Biden for broader inflation in the economy, prompting Democrats to reply in what became an extended debate on an unopposed bill.

But there are other forces at play. The price of crude oil has been rising over the past year, as oil and gas suppliers that had scaled back production during the pandemic struggle to keep up with renewed demand. More recently, buyers have shunned Russian crude following its invasion of Ukraine, pushing prices even higher.

The average price for a gallon of gas in the U.S. on Thursday was $4.29, according to AAA. It was $4.24 in Georgia. Prices have dropped slightly in the past week as oil prices have dipped slightly.