Kemp extends Georgia gas tax suspension, state of emergency

Gas prices are displayed on a gas pump at an Exxon gas station in Washington, DC, on May 24, 2022. (Photo by Stefani Reynolds / AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images)

Gov. Brian Kemp has extended a state of emergency and suspension of Georgia's tax on gasoline in an effort to reduce the impact of inflation.

The suspension, which began on Sept. 12 and was scheduled to end next week, will now be extended until Nov. 12.

In a press release Friday, Kemp claimed that his decision to continue the state of emergency was in response to "uncertain economic conditions caused by irresponsible policies coming out of Washington, D.C."

"Our state's average gas price is now roughly 40 cents less than it was last month. With our partners in the General Assembly, we'll keep working to put money back in the pockets of Georgia families." Kemp said.

Danny Kanso, senior fiscal analyst and director of legislative strategy at the Georgia Budget and Policy Institute, estimates suspending the gas tax could save money for Georgia drivers but cost the state as much as $180 million a month. 

"A good chunk of that will go to consumer," said Kanso "It almost certainly will reduce state tax collections by about that amount per month." 

The state can absorb the hit from the lost revenue because of a budget surplus. "Right now the state has about $16-billion cash on hand," Kanso said. 

The gas tax is reserved exclusively for infrastructure like roads and transportation. The state can backfill lost revenue from gas taxes with money from the surplus. But Kanso says that could come at a cost to other programs. 

"And that means less money available for things like education, healthcare, core functions of government that make up most of what the state does," Kanso said. "It could go to a long-term investment like a school bus, or it could go to a short-term suspension of the gas tax." 

Kemp previously suspended the state's gas tax in March 2022 and extended the suspension for 10 months.

Georgia’s gasoline price normally includes a federal tax of 18.4 cents per gallon and a state tax of 29.1 cents per gallon. A number of counties and the city of Atlanta 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.

As of Friday, AAA reports that the average price for a gallon of gas in Georgia is $3.18 - around 41 cents less than the same time in September, and around the same price that it was a year ago.

The national average price is $3.74.