Summer 2022

NSPE Today: Policy Perspectives
Opposition to a Gas Tax Holiday

Earlier this summer, with consumers facing rising inflation and gas prices, President Joe Biden called for a three-month federal gas tax holiday to lower the cost of gas. NSPE determined that if a gas tax holiday were to pass Congress, it could cause a delay or cancellation of much needed critical infrastructure projects, taxpayers may not see the savings, and there would be no guarantee that the suspension would not be extended. As a result, NSPE launched an advocacy campaign requesting members to contact their federal representatives to oppose any suspension of the gas tax.

On June 22, the White House released a fact sheet to support the president’s position. The statement asserts, that the price of gas is up by almost $2 per gallon of gas in America since the start of the Russian invasion of Ukraine.¹ Additionally, President Biden emphasized his efforts to boost the supply of oil and gas, authorize a release of oil from the Strategic Petroleum Reserve, and encourage oil companies and refiners to boost capacity and output.² The statement highlights that the rise in gas prices pose a significant challenge to working families and more action must be taken.³

Specifically, Biden called on Congress to suspend the federal gas tax for three months, without taking any funds away from the Highway Trust Fund.⁴ In addition, he called for state and local action to provide additional relief to consumers. If Congress was to pass a bill suspending the gas tax, it would suspend both the 18-cent tax per gallon of gasoline and the 24-cent tax per gallon of diesel.⁵ The statement highlighted the recent state actions by Connecticut and New York, which suspended their states’ gas taxes,⁶ and Illinois and Colorado, which delayed planned tax and fee increases.⁷ Despite his plea, many federal and state legislators have rejected the idea of a gas tax holiday.

Congress has not taken any action to suspend the gas tax and is unlikely to take any.⁸ There are several reasons why Congress has yet to act on suspending the gas tax. First, there are not enough votes to pass a suspension. Most Republicans have publicly stated that they are against the idea.⁹ Second, some Democrats are also skeptical of the idea. Senator Tom Carper (D-DE) stated that a gas tax holiday was “a shortsighted and inefficient way to provide relief.”¹⁰ Third, even if Congress suspended the gas tax, there is no guarantee that gas prices would go down or go back into the taxpayers’ pockets.¹¹ Fourth, gas prices are beginning to go down, over fears of a global recession.¹² Finally, a suspension of the gas tax could hurt the Highway Trust Fund, which is the major source of funding for highways, roads, and bridges.¹³

For the same reasons, many industry groups have come out in opposition to suspending the gas tax. Recently, the Americans for Transportation Mobility and the Transportation Construction Coalition, sent a letter opposing the gas tax. The letter noted that Congress passed a once-in-a-generation bill that invested in our nation’s infrastructure by passing the Infrastructure Investment and Jobs Act. Any suspension would likely take away funding from the Highway Trust Fund and leave a funding gap for desperately needed infrastructure projects.¹⁴ Additionally, it would negatively impact states because state funding is used to match federal funding on major infrastructure projects. ¹⁵ This would lead to uncertainty among state and local governments regarding planned infrastructure projects.

Earlier this year, NSPE sent out a grassroots campaign urging members to send letters to their federal representatives urging them not to suspend the tax. In the campaign, NSPE noted that even suspending the gas tax for a short amount of time could result in the loss of over $20 billion from the Highway Trust Fund, dealing a serious blow to America’s infrastructure. NSPE also expressed concern that there would be no guarantee that consumers would see any savings. Finally, NSPE noted that, following the proposed three-month suspension, the tax might not be reinstated. Many of our members expressed concerns about the safety of the public should funding be cut off from improving our nation’s roads, bridges, and highways. The recent bridge collapse in Pittsburgh, Pennsylvania, serves as a dramatic example of the urgency of the issue. NSPE remains opposed to a suspension of the gas tax and will continue to advocate for the public’s health, safety, and welfare.

Brandon Schall, Esq., is NSPE’s senior manager, government relations and advocacy.