Ohio legislators on Sept. 30 approved a 90-day state motor fuel tax suspension with bipartisan support. The bill draws $725 million from the state’s general fund surplus to backfill the lost revenue. Gov. Mike DeWine (R) stated he will sign into law on Oct. 1.
[Update: Gov. DeWine signed the bill into law on Oct. 1.]
Ohio joins Georgia as one of the latest states to suspend state fuel taxes due to rising gas prices and economic concerns. Earlier this week, Georgia Gov. Brian Kemp (R) declared a “state of emergency due to global market volatility” suspending his state’s fuel taxes for 30 days starting Sept. 29.
Indiana renewed its gas tax suspension several times since it was initially enacted in April. Kentucky and Illinois suspended scheduled state gas tax increases until Jan. 1, 2027, and Utah cut the state gas tax by six cents per gallon for the last six months of this year.
Several other states, including Connecticut and Michigan, have proposed suspensions as a way to alleviate “pain at the pump.” Other states have expanded the use of tax-exempt dyed diesel or allowed an earlier switch from more expensive summer-blend fuel to less expensive winter-blend fuel.
Because state fuel taxes are often assessed at wholesale levels and reimbursed by drivers at the point of sale, savings from these changes may not be fully passed on to consumers. A 2022 ARTBA-TIAC study found that, on average, just 18 percent of an increase or decrease in the state gas tax is passed through to motorists in the retail price of gasoline in the two weeks after a change takes effect.
Meanwhile, lawmakers around the country are identifying transportation funding shortfalls. The South Carolina Revenue and Fiscal Affairs Office found that annual motor fuel tax collections declined for the first time in more than 15 years, a decrease of $856,172. The Rhode Island Public Expenditure Council found that while increased bridge investments reduced the number of bridges in poor condition, improving road conditions continues to be a challenge. The state needs an additional $278.9 million just to meet federal match requirements over the next five years.