As prices soar, Beshear halts scheduled increase on state gas tax
Gov. Andy Beshear is taking action to prevent a statutory increase on Kentucky’s gas tax.
The current rate is 26 cents per gallon, and was set to increase by 2 cents due to state statute on July 1.
Beshear is halting the increase by asking the Department of Revenue to file an emergency regulation.
Gas prices in Kentucky, like elsewhere in the nation, have been on the rise this year. The current average price of gas in the state, $4.56 per gallon according to AAA, is well over a dollar higher than what it was in 2021.
Beshear said that he only intends the emergency regulation to extend until mid-January, when the General Assembly comes back into session.
“At that time, they can look at where we are and ultimately make a decision on where we go from there,” Beshear said.
The governor noted that the freeze on the gas tax increase is expected to save Kentuckians about $34 million. The hit to state coffers would only be a $14 million on the state road fund, a figure which Beshear said his administration would ask the legislature to “make whole” at the start of next year.
Beshear has regularly beat the drum about an “economy on fire” under his watch, with the state seeing record private investments announced in recent months.
“While Kentucky’s future is incredibly bright – we’re seeing more investment and more jobs than ever before – I get that the present is difficult on our families, primarily because of inflation and the price of gasoline. While gasoline is an internationally traded commodity, the price of which is primarily determined by a couple of foreign countries and some large corporations, this is an action that we can take that will prevent the price of gas from increasing two cents per gallon under this statute,” Beshear said.
Leaders in the statehouse GOP majorities were critical of Beshear’s announcement, questioning the impact it will have on Kentuckians dealing with record inflation. House Speaker David Osborne, R-Prospect, said that just two cents per gallon’s difference “provides little relief” for residents compared to the impending GOP-led personal income tax cut, which he said will decrease Kentuckians’ overall income tax burden by $500 million.
“While the skyrocketing cost is the obvious and inevitable result of disastrous foreign and domestic policies on the federal level, President Biden seems unwilling to provide meaningful solutions to the impact inflation is having on the cost of living for the average person and the Governor’s only response seems to be to ask him to print more money,” Osborne said.
Senate President Robert Stivers, R-Machester, said that he supports working with Beshear to “address the exorbitant rise in fuel cost,” but claimed that Beshear’s initiative was illegal because it goes against statute.
Governors across the country have taken similar action to Beshear in addressing rising costs at the pump. Republican Brian Kemp in Georgia suspended the state’s gas tax for a few months earlier this year and several other states have enacted shorter pauses; California Democratic Governor Gavin Newsom has proposed sending checks to residents who own cars.
This is not the first time that Beshear has addressed taxation related to transportation. In February – after Sen. Donald Douglas, R-Nicholasville, filed a resolution to a similar effect – Beshear signed an executive order that stopped an increase in property tax on used vehicles.
Beshear also sent a letter to Attorney General Daniel Cameron, asking Cameron for input on whether the governor should declare a state of emergency in order to activate the price gouging statute. The governor said that Cameron’s power to address price gouging is limited when there’s not a state of emergency.
Beshear’s emergency powers were recently limited by the state legislature – he has the power to declare one for a month himself, but only the state legislature or county officials can allow a state of emergency to continue.
“Other states and their AGs have at least looked at potential investigations, and the Attorney General doesn’t have price gouging powers unless I file a state of emergency,” Beshear said. “So this is making sure, if there is a possible need, that we’ve done what we need to do from the governor’s office to empower them.”
Cameron is one of several Republicans – including fellow GOP constitutional officers in Commissioner of Agriculture Ryan Quarles and Auditor Mike Harmon – to have announced a run for governor against Beshear in 2023.
This story was originally published June 2, 2022 at 12:31 PM.
