By admin TUCSON, Ariz. (13 News) – President Donald Trump said he’s considering suspending the federal gas tax as fuel prices continue to surge due to the war in Iran.
Read more New research warns immigration crackdown is hurting Arizona’s workforce
Drivers could expect to see savings of around 20 cents a gallon, depending on the type of fuel.
With Arizona’s gas price 30 cents above the national average and 50% higher than the average price a year ago, lawmakers across the aisle are calling for change, including in Arizona.
Federal gas tax suspension proposal
As fuel prices soar to record levels across the country, lawmakers are looking for solutions, including temporarily suspending the 18.4-cent federal gas tax.
“It does sound really nice, and I think it’s politically attractive, and drivers would certainly welcome any relief, but unfortunately, it won’t be a lot of relief,” said Adam Hoffer, Director of Excise Tax Policy at the Tax Foundation.
If Congress approves the move, experts said drivers would see lower prices quickly, but that minor relief could come at a cost. The federal gas tax provides more than $23 billion in revenue to the Federal Highway Trust Fund.
GasBuddy analyst Patrick De Haan said a temporary gas tax suspension would cause a major budget shortfall and eliminate funding for road and transportation projects.
“Depending on how long the federal gas tax holiday were to go if implemented, every day it would cost the federal highway trust fund over $68 million of lost revenue,” De Haan said.
States consider own gas tax suspensions
The proposal has gotten bipartisan support and inspired states to temporarily suspend their state gas tax. This week, Indiana paused its sales and excise tax on gas, saving drivers nearly 60 cents a gallon.
“Indiana prices, nobody’s seen a bigger drop, because stations are again passing on the tax decrease,” De Haan said.
Read more Prescott man flees trial for attempted kidnapping hoax to cover gambling debt
Some Arizona lawmakers are pushing for a similar move.
In January, Rep. Julie Willoughby (R – LD13) introduced House Bill 2400 to eliminate the state’s 18-cent gas tax through the summer. She said it aimed to ease the burden of higher prices on Maricopa and Pinal counties, which were required to use a more expensive ‘boutique’ fuel blend.
The bill hasn’t made it out of the Senate, but Willoughby said Republicans could try to work it into budget discussions, given how prices have climbed.
“But a lot of this is almost like a slow drip, right? Over time, that 18 cents now is more and more as the gas prices go up, so that is more and more impactful,” Willoughby said.
Potential impact on Arizona
If both federal and state gas taxes are suspended, Arizona drivers could save as much as 36 cents a gallon. But like the revenue gained from the federal gas tax, Hoffer said a tax suspension in Arizona might bring temporary relief and cause a long-term problem.
“The number one revenue source for Arizona, for road construction and maintenance, is the gas tax. If that gas tax is put on hold for a little bit, those construction projects are still going to be waiting out there,” Hoffer said.
13 News reached out to Governor Katie Hobbs’ office for comment. In a statement, her spokesperson wrote:
“Governor Hobbs is encouraged to see the President join Democrats in proposing relief for families at the gas pump. With gas prices rising due to the war in Iran, she’s made it clear that every option to ease the burden on hardworking Arizona families is on the table. That’s why her budget focuses on lowering the cost of healthcare, housing, and utilities while delivering real solutions to make life more affordable for all Arizonans.”
Are you streaming 13 News?
Watch a free live stream of Tucson Now and 13 News at TucsonNow.Live.
Be sure to download the free Tucson Now app, which you can find on Apple and Google.
If you are using a desktop computer, you can use your mobile device to scan the QR code below.
Read more Sky School brings hundreds of students to Mount Lemmon for research
You can submit your breaking news or weather images here.