Many drivers around the country are grappling with historically high gas prices. Fuel costs were already rising before Russia invaded Ukraine, and the war has just pushed them further.
The United States, which is not a big consumer of Russian energy resources, has imposed a restriction on imports to pressure President Putin’s regime to quit its operations in Ukraine. To mitigate the impact of the shortage, President Biden stated that one million barrels of oil will be released daily from the nation’s strategic reserves over the next six months.
Governments are proposing and adopting legislation at the state level to directly help residents. As seen in Connecticut, Georgia, and Maryland, fuel tax holidays to direct cash payouts, as seen in New Mexico, are among the proposals. Moreover, to improve ridership on public transportation systems, several governments have reduced fares by up to 75% to provide commuters with additional alternatives to driving.
Laws have been passed to help offset rising fuel prices.
Connecticut
Connecticut is one of three states that has passed legislation to eliminate state gasoline taxes to help customers cope with rising costs. The suspension will last until June 30, and lawmakers expect it will “give some relief to consumers facing higher prices due to several foreign dynamics and market uncertainty that extend far beyond our state.”
The state has also removed “fares on public buses statewide over the same period” in addition to the tax cut.
Georgia
In April, Georgia Governor Brian Kemp said that to bring assistance to people, the state would postpone gasoline taxes until May 31. Gov. Kemp also stated that the state will be “returning money to hardworking Georgians through a tax refund and an income tax cut” upon signing the bill. More information about this rebate has not yet been given.
Thank you to @GeoffDuncanGA, @SpeakerRalston, & all the members of the General Assembly who voted unanimously for this bill to ease the burden on their fellow Georgians.
I also want to thank @JodiD4Lott & @ChuckHufstetler for sponsoring this legislation.https://t.co/1Djn9XVfTi
— Governor Brian P. Kemp (@GovKemp) March 18, 2022
Maryland
Maryland, like Connecticut and Georgia, has suspended state gasoline taxes. This tax holiday, however, is only valid until April 18.
“Of course, this isn’t a panacea, and market volatility will continue to cause price variations, but we will continue to use every instrument to provide relief for Marylanders,” Governor Larry Hogan said as he signed the bill into law.
In the future, Gov. Hogan wants the state legislature to repeal the automatic gas tax increases that are now in place under Maryland law.
Which states provide residents with direct payments or checks?
Idaho
Those who live in Idaho and pay taxes will receive a check for $75, or 12% of the taxes they paid to the state in 2020. If the latter is more significant, the difference will be sent; if the former is greater, the taxpayer will receive $75.
Indiana
Indiana Governor Eric Holcomb recommended in December 2021 that the qualifying standards for receiving a $125 payment be expanded to include persons who do not have a recorded income. Given heightened inflation following the state’s historic budget surplus, a bill to deliver these payments was passed earlier this year.
The minimum income was eliminated in February, allowing more than 400,000 people in the state to apply. Those who have not received their cheque should do so by May 1.
New Mexico
“Automatically transmit $500 payouts to single tax filers and $1,000 payments to joint filers,” according to a bill passed in New Mexico on April 8. To get the money, you don’t have to do anything.
🖋️ SIGNED: Economic relief for New Mexicans, easing the burden of high national prices by putting hundreds of millions of dollars in New Mexicans’ pockets and protecting their paychecks.
In total, we’re delivering up to $1,500 in household relief to 1.1 million New Mexicans.
— Governor Michelle Lujan Grisham (@GovMLG) April 8, 2022
The payments will be mailed in July and August, and no action is required to receive them. The bill was passed after Gov. Michelle Lujan Grisham asked lawmakers to return to the capital for a special session to provide relief from rising gas prices. The Senate will also take steps to reduce the cost of public transportation, as petrol prices in some parts of the state have reached new highs.
What proposals are currently being circulated in the states?
States that have proposed suspending gasoline taxation
Alaska’s and Florida’s governors have recommended suspending gas taxes in their respective states.
In mid-March, Alaska Governor Mike Dunleavy proposed suspending “the collection of tax on motor and marine fuels, aviation gas, and aviation jet fuel until June 30, 2023.” In November, before the Russian invasion began, Florida’s Ron DeSantis recommended a five-month ban. This proposition has not been taken up by either legislature.
States that have proposed sending direct payments
California
In late March, Governor Gavin Newsom said that he would submit a plan to the state legislature to see $400 cheques sent to households with automobiles. There would be a two-car limit, but there would be no income restrictions on who might receive the checks. The cheques could be sent as early as July if the measure passes.
Leaders in California are also considering a 75% cut in fares for public transportation networks to boost ridership.
Hawaii
As inflation rose continuously and Hawaii’s budget surplus grew, Gov. David Y. Igedavid recommended that the legislature “give $100 refund checks to every taxpayer and dependent.”
“By doing so, we’ll also infuse $110 million into our economy, giving it a boost,” Gov. Igedavid stated.
Illinois
State Senators in Illinois, all Democrats, surprised their House colleagues and Governor when they passed a package that included a $100 stimulus check for most taxpayers and $50 for each dependant.
Other contentious provisions in the law include a $300 check for property owners to lessen their property tax bill and a suspension of gasoline and grocery levies.
Senator Elgie Sims stated in a news release that the bill intends to “reduce soaring gas and grocery expenses and provide citizens with much-needed relief.”
.@ElgieSims: this goes farther than the governor’s plan. We are stopping higher gas taxes from taking effect this summer and wiping out grocery sales taxes for six months. pic.twitter.com/2jTsGdsYyL
— IL Senate Democrats (@ILSenDems) April 1, 2022
The bill’s odds of passing are unknown, but Republicans have slammed the Democrats’ move as a farce, accusing them of pandering during an election year.
Kentucky
In late March, the Kentucky Senate enacted a bill that, if passed by the House, would provide homeowners with a one-time payment of $500 to $1,000 to help offset rising inflation.
Maine
Maine Governor Janet Mills introduced a budget plan in March that would pay “relief checks to Maine households up to $850 in the face of record-high inflation and rising oil and gas prices caused by Russia’s invasion of Ukraine,” according to the Governor. This is a budget revision made in light of the impact that rapid price swings have on households across the state.
The $850 one-time payment would go to about 800,000 taxpayers in the state, matching a Republican proposal made in the weeks preceding the Governor’s announcement.
Which governors have spoken out against eliminating gas taxes?
Governor Kay Ivey of Alabama has stated that lowering the state’s gas taxes would be detrimental to the state’s economic prospects. Many governors have taken a similar stance, seeking to see federal gasoline taxes reduced or removed to lessen prices for their citizens without lowering their own revenues.
“You can notice the supply deficit crisis on our shelves.” You wouldn’t have to hold your breath if you went to the petrol station under President Trump. Prices are now skyrocketing daily. President Biden is currently in the driver’s seat.”
This is a familiar Republican theme, but it’s moot when examining how the economic and corporate landscape has altered since Donald Trump took office. Russia had not invaded Ukraine, the virus was still running, and with demand still low, international supply lines were under significantly less stress.
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