(The Center Square) — Georgia hasn’t collected its gas tax since March, as Gov. Brian Kemp has signed a series of legislation and executive orders to place a moratorium on collections.
“Those prices have a huge impact on the economy as a whole,” National Federation of Independent Business Region Director Nathan Humphrey told The Center Square. “On top of all the other issues that small businesses were particularly struggling with from supply chain, inflation and [the] overall cost of doing business, the margins were just super tight, so when that hit, it really provided necessary relief.”
Georgia typically collects between $160 million and $180 million in motor fuel tax revenues. Revenue numbers from the state show it hasn’t negatively affected the state’s revenues, even as it hasn’t collected roughly $1 billion since the moratorium started.
“The fact that the governor has continued to keep that in place, I think it’s given us a competitive edge over many other states,” said Humphrey, who until recently was the group’s state director. “Our economy will be much better situated when we come out of this turn. [We’ll] be in a little better position than some of the economies in states that didn’t do this.
“We’ve had the cheapest gas in the country, and that has a big impact on the agriculture industry, supply and logistics, transportation — the cost of getting goods to the consumer,” Humphrey added. “The whole ecosystem is impacted by it.”
Kemp, a Republican, initially suspended the state’s gas tax of 29.1 cents a gallon on gasoline and 32.6 cents a gallon on diesel fuel in March when he signed House Bill 304. He has since signed several executive orders to extend the moratorium; it currently expires on Dec. 11.
“Permanent tax relief is always the better option, and should be the goal of tax policy, but I doubt many Georgians are upset to have saved at the pump these past several months,” Tony West, deputy state director for Americans for Prosperity–GA, told The Center Square.
However, Daniel Kanso, director of legislative strategy and senior fiscal analyst at the Georgia Budget and Policy Institute, said the approach is not a sound long-term policy.
“The short answer is no, it is not sustainable to maintain an indefinite suspension of the gas tax,” Kanso told The Center Square. “So far, the governor has relied on offsetting revenues lost to the gas tax suspension with the substantial surplus generated during the pandemic recovery.
“However, going forward, it would be a better use of public funds to pursue more targeted and direct measures of economic relief, such as a state-level Earned Income Tax Credit or Child Tax Credit, rather than maintaining an across-the-board suspension of this important source of revenue used to fund Georgia’s infrastructure,” Kanso added.
By T.A. DeFeo | The Center Square contributor
