MICHIGAN, USA — Governor Gretchen Whitmer has joined Governors Tony Evers (WI), Tim Walz (MN), Jared Polis (CO), Michelle Lujan Grisham (NM) and Tom Wolf (PA) in urging congress to pass the Gas Prices Relief Act to suspend the federal gas tax.
The governors sent a letter today to the Congressional leadership giving their support for the Gas Prices Relief Act.
The Gas Prices Relief Act would suspend the 18.4 cents per gallon federal gas tax until Jan. 1, 2023 and reallocate money from the general fund to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund to compensate for the suspension of the tax.
The Gas Prices Relief Act was introduced in both the senate and house as bills S.3609 and H.R.6787. The bills were introduced in February prior to Russia's invasion of Ukraine in order to help alleviate the dramatic rise in gas prices.
The legislation is supported by Michigan Senator Debbie Stabenow and Michigan Representatives Elissa Slotkin (MI-8) and Dan Kildee (MI-5).
According to Dr. Paul Isely, associate dean of Grand Valley State University's Seidman College of Business, Michigan residents pay 18.4 cents per gallon in federal taxes. Over the last two weeks, he says the cost of gas for an average U.S. family has gone up by $18.
So how much would suspension of the federal gas tax actually save?
"It's about three bucks a week for the average per family in the United States," says Isely. "For anybody who has the money to be driving a car, which is not a cheap thing to do to begin with, $3 is not a big sum of money."
Each year, Isely says the federal gas tax collects about $25 billion. That money goes straight into the Highway Trust Fund. Without the tax, that money would disappear.
"Unfortunately, that's necessary funds right now for improving infrastructure," says Isely.
But the governors say the Gas Prices Relief Act will account for that loss in revenue. The letter says the bill would authorize the U.S. Department of Treasury to use general fund dollars to replace the lost tax.
The full text of the letter is below:
Dear Speaker Pelosi, Leader Schumer, Leader McCarthy, and Leader McConnell,
As Congress looks to relieve Americans of the financial stress caused by increased gas prices amid international crises and rising inflation, we support federal legislation to address rising gas prices by suspending the federal gas tax until the end of the year.
According to the American Automobile Association, the national average gas price price in the United States is $4.173, up more than a dollar from 2021. The Gas Prices Relief Act as introduced in the House and Senate - H.R. 6787 and S. 3609 respectively – would alleviate the consumer cost of rising gas prices while protecting the federal government’s capacity to make infrastructure investments.
First, it saves Americans at the pump by suspending the federal gas tax for the rest of the year. Money saved at the pump translates into dollars back in consumers’ pockets for groceries, childcare, rent, and more.
But importantly, the legislation would also ensure the Highway Trust Fund stays solvent. The bill would authorize the U.S. Department of Treasury to transfer general fund dollars to replace the temporarily lost revenue of a halted federal gasoline excise tax. Furthermore, the Infrastructure Investment and Jobs Act (IIJA) dedicated an additional $118 billion to the Highway Trust Fund, and the Trust Fund's capacity to finance the construction and maintenance of roads, bridges, and highways across the country would not be diminished by the legislation. For these reasons and more, we know it is possible to invest in infrastructure and also provide meaningful relief to consumers at the pump.
At a time when people are directly impacted by rising prices on everyday goods, a federal gas tax holiday is a tool in the toolbox to reduce costs for Americans, and we urge you to give every consideration to this proposed legislation.
Sincerely,
Gretchen E. Whitmer Governor Jared Polis
Governor of Michigan State of Colorado
Governor Tim Walz Governor Michelle Lujan Grisham
State of Minnesota State of New Mexico
Governor Tom Wolf Governor Tony Evers
State of Pennsylvania State of Wisconsin
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