Georgia Suspends Taxes on Gas, Should Louisiana Do That?

Motorists across the Gulf South, including here in Louisiana are starting to once again feel a bit of a pinch at the gas pumps. According to Triple-A, the American Automobile Association, drivers in Louisiana are paying an average price of $3.39 cents a gallon for regular fuel. And while that's one of the lowest fuel prices in the nation it's still about .20 cents higher than prices were for that same amount and grade of gas one year ago.

Meanwhile, in the state of Georgia, drivers there are paying $3.56 for a gallon of regular gas. That makes gas in Louisiana about .17 cents cheaper than what you'd pay in Georgia. Actually, it's what you used to pay in Georgia because the price of fuel in the Peach State just took a nice drop thanks to a politician.

As of this morning, the state of Georgia has suspended the state taxes attached to each gallon of fuel sold in the state. That equates to 31.2 cents per gallon or a savings of $3.12 cents on a ten-gallon fillup. Georgia Governor Brian Kemp signed the executive order Tuesday and the tax suspension for motorists on both gasoline and diesel fuel will last until October the 12th.

The reason for the tax suspension? Inflation and what Governor Kemp felt inflation was doing to Georgia residents. But at what cost does this "saving money" carry? Well, the last time Georgia suspended the state tax on fuel it cost the state coffers about $1.7 billion dollars. But we should note, that the state of Georgia currently has a more than $5 billion dollar surplus forecast for the budget year that began on July 1st.

Would Suspending State Taxes on Gasoline Benefit Louisiana?

In the short term, it probably would benefit the people who are affected most by high prices, which would be the state's working poor. But Louisiana's state gas tax is not nearly as high as the one that is levied against fuel purchases in Georgia. In fact, Louisiana has one of the lowest fuel taxes in the nation. 

So, suspending the current state tax on a gallon of fuel in Louisiana would result in a savings of 16.9 cents per gallon of gas sold. Or for a motorist making a 10-gallon fill-up, that would mean a savings of $1.69. That figure is a little more than half of what the consumer savings will be in Georgia but what's the real cost for that saving?

Louisiana, like most states, uses gas tax money to maintain and build roads. If you've ever driven on a Louisiana highway, you can feel the difference our low tax rates make in the condition of the roadway. There have been efforts to actually raise Louisiana's gas tax to add more money to the state's road repair coffers but so far all of those efforts in the legislature have failed.

And when you consider Louisiana has two major I-10 bridge issues, Baton Rouge and Lake Charles, could we really afford to not be stashing money via fuel taxes in our road repair accounts?

Probably not.

But maybe we could use the money we save in fuel taxes to be able to afford our highest in the nation combined sales tax rates. We pay a combined sales tax rate of 9.55%. Just for comparison, since we've been using Georgia in the fuel tax discussion, their combined sales tax rate is only 7.4%.

I guess the question is more of a "right way" to help folks with inflation versus a "right now way" to help folks deal with higher prices. The Georgia solution certainly has some merit but a higher cost down the road. While in Louisiana are roads are in such poor shape, we'd probably be better off walking anyway.