A nonprofit publication of the Kentucky Center for Public Service Journalism

Governor stops planned July 1 gas tax hike, seeks input from AG to further address rising prices

Gov. Andy Beshear’s administration on Thursday filed an emergency regulation to freeze the state gas tax and to prevent a 2-cent increase per gallon that would have taken effect July 1.

“Kentuckians cannot afford to pay more, and I am committed to doing everything I can to help keep more dollars in people’s pockets,” said Beshear. “This law was never intended to hurt Kentuckians during tough times, but with rising prices and inflation, this increase would have a negative impact on our families and it is time to take action.”

Gov. Beshear

The state gas tax is set by statute, both in its rate and how it is calculated. The current rate of 26 cents was set to increase under a trigger, resulting in a price hike on both regular and diesel fuel. The Governor has looked for ways to relieve the financial burden on Kentuckians and asked the Department of Revenue to file this emergency regulation.

The funds collected through the state gas tax contribute to the Road Fund, which year to date is up 2.3%. Over the first seven months of the fiscal year, this action will reduce the budgeted Road Fund revenues by 1.6%. To make up for the lost road fund revenues, Gov. Beshear will propose using funds from the upcoming General Fund budget surplus. The budget for next year also includes a 21% increase in transportation infrastructure dollars from the federal government.

“This action to provide relief to Kentuckians will have no material impact on the transportation budget and projects,” Kentucky Transportation Cabinet Secretary Jim Gray said. “All projects will move forward.”

In a statement posted to Twitter, Kentucky Senate Pres. Robert Stivers (R-Manchester) blamed high gas prices on the Biden administration’s “reckless policies.” Stivers said the wants to work with the governor on suspending the increases to the gas tax but added that the Department of Revenue must administer the tax as prescribed by law.

“. . .the governor cannot deviate from the tax amount determined by statute,” Stivers said. “It is not within the governor’s purview to pick and choose which regulations he would like to enforce. Not only is this action illegal, but it will only save residents 2-cents per gallon.”

The Governor also sent a letter to Attorney General Daniel Cameron asking for advice on whether he should declare a state of emergency in order to activate the price gouging statute and further protect Kentuckians.

Beshear is also seeking action from Washington.

“I wrote a letter to federal leadership calling on them to suspend the federal gas tax until the end of the year. That’s something the federal government is able to do while still keeping their transportation obligations intact.”

According to the U.S. Energy Information Administration, the federal fuel tax is 18.4 cents per gallon on gasoline at the retail level and 24.4 cents per gallon for diesel fuel.

In addition to the executive regulation, the Governor signed an executive order in February that immediately stopped an increase in vehicle property taxes caused by soaring used car values and proposed a 1% state sales tax cut that the legislature failed to act on. He also wrote a letter to federal leadership, calling on them to suspend the federal gas tax until the end of the year.

Kentucky Today contributed to this report.

Related Posts

Leave a Comment