In Louisiana and elsewhere in the Gulf South, drivers are beginning to experience some pinching at the gas pumps once more. According to Triple-A, the American Automobile Association, normal fuel costs $3.39 cents per gallon on average for drivers in Louisiana.
Even though that is one of the lowest fuel costs in the country, prices for the same amount and grade of petrol were still about.20 cents higher a year ago.
Drivers in Georgia are spending $3.56 for a gallon of normal gas at the moment. As a result, gas in Louisiana is approximately 0.17 cents less expensive than in Georgia.
Actually, that is what you used to pay in Georgia because a legislator recently helped to lower the cost of petrol in the Peach State.
Georgia has stopped the state taxes imposed on each gallon of petrol sold within the state as of this morning. This works out to a savings of $3.12 cents on a ten-gallon fill-up or 31.2 cents per gallon.
The executive order was signed by Georgia Governor Brian Kemp on Tuesday, and it will suspend gasoline and diesel fuel taxes for drivers until October 12th.
What was the cause of the tax suspension? Governor Kemp’s perceptions of inflation’s effects on Georgians. But what price does this money-saving carry?
Georgia’s recent suspension of the fuel tax resulted in a financial loss to the state of around $1.7 billion. But it’s important to remember that the state of Georgia is currently expecting a surplus of more than $5 billion for the fiscal year that started on July 1.
Would Louisiana Benefit From the Suspension of State Gasoline Taxes?
The state’s working poor would likely benefit in the short run because they are the ones most impacted by high pricing.
However, Louisiana’s state gas tax is much lower than Georgia’s, which is charged on fuel sales. Louisiana really has one of the lowest fuel taxes in the country.
Therefore, Louisiana would save 16.9 cents per gallon of gas sold if the state’s existing fuel tax were suspended. Or a $1.69 savings for a driver filling up their car with 10 gallons of gas.
That amount is somewhat more than half of what Georgian consumers will save, but what is the true cost of that saving?
Like most states, Louisiana uses gas tax revenue for road construction and maintenance. If you’ve ever driven on a highway in Louisiana, you’ve probably seen how much of a difference our low tax rates have made to the state of the road.
Could we really afford not to be setting aside money through gasoline taxes in our road maintenance accounts, especially considering that Louisiana has two significant I-10 bridge difficulties, in Baton Rouge and Lake Charles?
Most likely not.
But perhaps we could utilize the money we save on fuel taxes to pay for our highest combined sales tax rates in the country.
Our overall sales tax rate is 9.55%. Georgia’s overall sales tax rate is only 7.4%, as a point of comparison as Georgia has been used in the discussion on the fuel tax.