Georgia Gov. Brian Kemp has declared a state of emergency and temporarily suspended the state’s tax on gasoline in an effort to reduce the impact of inflation.
Danny Kanso, senior fiscal analyst and director of legislative strategy at the Georgia Budget and Policy Institute, estimates suspending the gas tax could save money for Georgia drivers but cost the state as much as $180 million a month.
“A good chunk of that will go to consumer,” said Kanso “It almost certainly will reduce state tax collections by about that amount per month.”
The state can absorb the hit from the lost revenue because of a budget surplus. “Right now the state has about $16-billion cash on hand,” Kanso said.
The gas tax is reserved exclusively for infrastructure like roads and transportation. The state can backfill lost revenue from gas taxes with money from the surplus. But Kanso says that could come at a cost to other programs. “And that means less money available for things like education, healthcare, core functions of government that make up most of what the state does,” Kanso said. “It could go to a long-term investment like a school bus, or it could go to a short-term suspension of the gas tax.”