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Florida will suspend gas tax but not until October

'It's a pretty inefficient way to provide relief,' tax policy expert says
Posted at 1:09 PM, Mar 10, 2022
and last updated 2022-03-10 17:47:40-05

TALLAHASSEE, Fla. — Florida drivers will receive some relief at the gas pump, but it won't be coming anytime soon.

State lawmakers on Wednesday agreed to suspend the state's gas tax but not until October.

They said the move was made until later in the year because that is when fewer tourists are coming to the state, hoping to benefit more local residents than out-of-state visitors.

The measure will save drivers about $0.27 for every gallon of fuel purchased.

RELATED: Check gas prices in your area

Jared Walczak, vice president of state projects with the Tax Foundation, called the move "not good policy."

"People are feeling the pain right now, offering relief in October doesn't necessarily address that," Walczak said. "It's a pretty inefficient way to provide relief."

WATCH: Tax policy expert explains why suspending gas tax won't bring much relief

Cutting Florida's gas tax is 'pretty inefficient,' tax policy expert says

The state's coffers are currently overflowing with cash from higher-than-expected tax revenues and federal stimulus money.

Florida plans to use money from the American Rescue Plan Act (ARPA) to compensate for about $200 million in lost revenue.

However, Walczak said it may not even be legal to use ARPA funds to cut the gas tax.

"There's some litigation around the strings that Congress attached to this. ... Under the law as written, states are not allowed to use the ARPA money for tax cuts," Walczak said.

Drivers are confused that lawmakers would wait until October when the pain at the pump is occurring now.

Anthony Thompson, driver
Anthony Thompson explains why he doesn't think a break on the gas tax in the fall makes much sense.

"By then things will probably have calmed down. Demand will be lower," said driver Anthony Thompson.

A growing number of other governors and state lawmakers across the U.S. are calling for the suspension of gas taxes to provide relief to drivers from record-high prices.

"A gas tax holiday will put a little money back in people's wallets, but probably not as much as it costs the states," Walczak said. "It won't do a lot to promote economic activity. It's coming fairly late given the current crunch, and especially [since] we think of summer as the driving season."

Florida's gas prices hit another record high Thursday with the state's average now at $4.35 per gallon, according to the Automobile Association of America (AAA).

RELATED: Drivers making tough choices as gas prices hit records highs in Florida

Gas prices were averaging $4.32 a gallon nationally Thursday.

Florida is the first state to announce the suspension of its gas tax this year.

Legislative leaders in Michigan and Pennsylvania announced similar proposals to suspended or reduce state gas taxes.

Governors in Georgia and California also called for relief from state gas taxes.

Governors from six states have urged Congress to suspend the federal government's 18-cent-a-gallon gas tax through the remainder of this year.

Some transportation advocates have said there is no guarantee a gas tax cut would get fully passed on to consumers.

There is also talk of Congress suspending the 18 cents federal gas tax.