As Kentuckians have watched gas prices continue to rise in recent months, Kentucky Gov. Andy Beshear announced Thursday his administration has filed an emergency regulation to freeze the state gas tax rate to prevent a 2-cent per gallon increase.
The current 26 cent per gallon gas tax was set to increase July 1. The state gas tax rate is set by statute and has triggers for such increases.
Beshear said his administration is taking this action to help Kentuckians keep more money in their pockets and relieve the financial burden.
Because of the freeze, Kentucky will see less money in its Road Fund, which pays for the maintenance, construction, and more of the state’s roads and bridges. To make up for this loss of funds, Beshear said he will propose using funds from the state General Fund next year.
Other states have enacted or proposed similar measures related to taxes on fuel as part of efforts to provide relief from rising prices. Think-tanks such as the Tax Foundation, a non-partisan organization focused on state and federal tax issues, have voiced criticisms of such proposals, arguing that they offer minimal relief to consumers, harm long-term road fund revenues, and potentially contribute to further price increases.
The Kentucky Chamber will be hosting an in-depth discussion on what’s happening with inflation and what it means for businesses, individuals, and the economy on June 14. Register for the webinar here.