Gas Prices Could Climb Despite State Tax Freeze
Gov. Nathan Deal issued an executive order to freeze the state gas tax on Friday, stopping an increase that would have started July 1. Using a formula tied to fuel prices, the state gas tax would have increased 1.6 cents. However Channel 2 consumer investigator Jim Strickland has confirmed prices will increase regardless because of a clause in the order.
The Executive Order suspending any increase in the Prepaid State Tax rates by freezing the current rates does not apply to Prepaid Local Tax (i.e., local sales and use tax), the order states.
The order gives Deal no power to stop the increase in local option taxes coming this week. The increase will be based on an average snapshot of prices taken at their peak this past spring. Deal’s freeze on the 4 percent state portion of the sales tax will avert a 1.6 cent per gallon increase. The local option tax will rise about a penny in counties that charge 3 percent in sales tax.
“I was under the impression that nothing was going up,” said driver Celeena Davis, who commutes 50 miles each way. I think that the governor should have say in all the state taxes,” she said.
The tax increase follows another significant increase just two months ago. State officals said the freeze on the state portion of the sales tax will amount to a $40 million tax break for Georgia drivers. The state tax will remain at May levels for the rest of the year.
“If the governor can allow Georgians to keep money in their pocket, that’s the direction he’s going to go,” said Deals communications director Brian Robinson.
The governor’s suspension of the state gas tax only takes effect fully when the legislature approves it. Deal’s administration has already had contact with legislative leaders and they told Strickland they are confident the General Assembly will go along.
Strickland pulled numbers since February of 2009 and found the state sales tax on gas had increased from a little more than a nickel to 13 cents.
“So what are you gonna do? Ride a bicycle? You can’t do anything about it,” said driver Ray Lewis.