FRANKFORT, Ky. (June 2, 2022) – Today, 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 taken effect July 1.
“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 Gov. 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 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 under a trigger, resulting in a price hike on both regular and diesel fuel. The Governor has looked for ways to relieve the financial burden on Kentuckians and asked the Department of Revenue to file this emergency regulation.
The funds collected through the state gas tax contribute to the Road Fund, which year to date is up 2.3%. 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, Gov. 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.
“This action to provide relief to Kentuckians will have no material impact on the transportation budget and projects,” Kentucky Transportation Cabinet Secretary Jim Gray said. “All projects will move forward.”
The Governor also sent a letter to Attorney General Daniel Cameron today asking for advice on whether he should declare a state of emergency in order to activate the price gouging statute and further protect Kentuckians.
In addition to the executive regulation filed today, the Governor signed an executive order in February that immediately stopped an increase in vehicle property taxes caused by soaring used car values and proposed a 1% state sales tax cut that the legislature failed to act on. He also wrote a letter to federal leadership, calling on them to suspend the federal gas tax until the end of the year.