According to AAA, the national average price of gas is $4.32, up from $3.14 a year ago. Negotiations between Iran and the Trump administration have yet to open the Strait of Hormuz. The strait normally accounts for 20% of the world’s oil shipments, and its closure is putting pressure on energy and economies worldwide.
Nationally, Pres. Trump and Congress, plus locally, Wyoming Sen. Bo Biteman (R-Ranchester) (Biteman is running for the state’s U.S. House seat) have called for temporarily suspending the federal and/or state fuel taxes or creating a tax holiday. Wyoming’s gas tax currently sits at 24 cents per gallon, while the federal fuel tax is 18.4 cents. Any change to the state tax would require the Wyoming Legislature, and changing the federal fuel tax would require congressional action.
If the state tax was suspended, full-sized truck drivers could possibly save $6 to $8 on a full tank refill. But waiving the fuel tax could trickle back up to stations and refiners.
Doug McGee, public affairs with the Wyoming Department of Transportation (WYDOT) said not collecting it would significantly impact the department’s work.
”If the state fuel tax were to be suspended for, say, a month, two months,” said McGee. “That's nine and a half to ten and a half million dollars per month that the department would lose.”
The federal fuel tax is a portion of the funding that states need to begin large projects like constructing additional interstate lanes or highways. State fuel taxes support the ongoing maintenance costs of local infrastructure and transportation projects.
Recently, lawmakers on the Joint Highway, Transportation and Military Affairs committee were informed of funding shortfalls facing WYDOT as state infrastructure continues to age without repair. McGee said lawmakers and WYDOT are aware of the impact rising gas prices have but every state is in a similar position. He said any cut to funding, without a guaranteed backfill, will impact drivers through the conditions of infrastructure.
“We've been talking as a department with the legislature for quite some time about the fact that we are certainly experiencing a funding shortfall already,” said McGee. “So to exacerbate that, a fuel tax suspension would create more challenges for the department.”
States like Georgia have enacted a suspension of the state fuel tax in an attempt to lower gasoline prices for holiday travelers. The governor of Georgia doesn’t plan to extend the fuel tax break claiming oil prices have stabilized recently. However, talks around reopening the Strait and ending the conflict are ongoing.
This reporting was made possible by a grant from the Corporation For Public Broadcasting, supporting state government coverage in the state. Wyoming Public Media and Jackson Hole Community Radio are partnering to cover state issues both on air and online.
