Gov. Andy Beshear stops state gas tax increase, providing relief on gas prices

FRANKFORT, Ky. – On Thursday, Gov. Andy Beshear’s administration filed an emergency regulation to freeze the state gas tax and to prevent a 2-cent increase per gallon that would have begun July 1.

The state gas tax is set by statute, both in its rate and how it is calculated. The current rate of 26 cents was set to increase, resulting in a raised price on both regular and diesel fuel. According to a release by Beshear’s office, the governor has looked for ways to relieve the financial burden on Kentuckians and asked the Department of Revenue to file the emergency regulation.

“Kentuckians cannot afford to pay more, and I am committed to doing everything I can to help keep more dollars in people’s pockets,” said Beshear. “This law was never intended to hurt Kentuckians during tough times, but with rising prices and inflation, this increase would have a negative impact on our families and it is time to take action.”

The funds collected through the state gas tax contribute to the Road Fund. Over the first seven months of the fiscal year, this action will reduce the budgeted Road Fund revenues by 1.6%. To make up for the lost road fund revenues, Beshear will propose using funds from the upcoming General Fund budget surplus. The budget for next year also includes a 21% increase in transportation infrastructure dollars from the federal government.

The governor also sent a letter to Attorney General Daniel Cameron Thursday asking for advice on whether he should declare a state of emergency in order to activate the price gouging statute and further protect residents of Kentucky, stated the release.

In addition to the executive regulation filed today, the governor also wrote a letter to federal leadership to ask them to suspend the federal gas tax until the end of the year.