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As some states mull gas tax suspension, La. expert warns of mixed results

6 months 2 weeks 5 days ago Thursday, March 10 2022 Mar 10, 2022 March 10, 2022 10:36 PM March 10, 2022 in News
Source: WBRZ

BATON ROUGE - As the cost to fill up your tank continues to rise, more and more states are considering suspending state gas taxes aimed at providing drivers some relief.

Louisiana, though, is not among them.

Maryland became the latest state Thursday to take action, moving to suspend its $0.37 gas tax for thirty days. In total, nearly two dozen states are looking at the idea of a temporary suspension, tax freeze, or tax reduction.

In Louisiana, as lawmakers prepare to return to the State Capitol for the legislative session beginning Monday, it does not appear there will be much of a conversation about suspending the state's $0.20 gas tax, among the lowest in the country.

"You can think, 'alright, we can suspend this gasoline tax for a while, maybe we're gonna see prices go down at the pump,'" Cody Nehiba, an assistant professor of research at LSU's Center for Energy Studies, said. "But you do kind of run this risk, maybe, of seeing oil prices increase further and then gas prices, again, increase. Then people can't really notice that you suspended the gasoline tax at all."

Nehiba researches and analyzes the gas tax and its impact on Louisiana's economy and transportation sector. He says attempts to temporarily halt state gas taxes likely won't prove to be fruitful.

"It might seem like a moral victory, almost, that isn't really going to have significant effect on our pocketbooks," Nehiba said.

Most of the revenue generated from Louisiana's gas tax goes towards the Transportation Trust Fund within the state's Department of Transportation.

That money can be used for a handful of things, including trying to whittle down the state's roughly $15 billion backlog for construction projects and maintenance.

Multiple efforts to raise the $0.20 tax have failed during recent legislative sessions.

"Over time, what we're actually getting from that gasoline tax has been eroded by inflation," Nehiba said.

In Louisiana's case, should a gas tax suspension somehow gain support, Nehiba warns it could do more harm than good.

"Suspending the gasoline tax probably isn't going to have a huge effect on the price we're seeing at the pump currently," Nehiba explained. "Really, it's going to deplete that fund that Louisiana can draw on to fund road infrastructure."

Another effort to suspend the $0.184 federal gas tax has also gained support amid skyrocketing fuel costs.

Earlier this week, governors of six states -- Colorado, Michigan, Minnesota, New Mexico, Pennsylvania and Wisconsin -- urged congressional leaders to suspend the federal gas tax through the end of the year.

Though he did not co-sign the letter, WBRZ asked Gov. John Bel Edwards Wednesday if he would support a pause of the federal gas tax. In a statement, a spokesperson said, 'we're aware of the letter, and we're sensitive to the cost of increased fuel prices for drivers across Louisiana and the nation. That is exactly why we are working to diversify our energy alternatives including electric vehicles and climate change initiatives.'

WBRZ again reached out to Edwards' office Thursday afternoon, inquiring about a state gas tax suspension, and if any discussions were underway or likely, but did not receive a response.

Ultimately, Nehiba says, there aren't too many options available to wrangle rising prices.

"In the short term, it's going to be hard to get prices down," Nehiba said. "I think this is something that we're going to be looking at for a while."

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