Responding to soaring fuel prices, Governor Mike Dunleavy is aiming to give Alaskans a break at the pump by suspending State motor fuel taxes until next June. He asked the Alaska House of Representatives to consider his amendment to House Bill 104.
In his letter to the house, the governor wrote:
“With rising inflation eroding the financial bedrock of Alaskan homes and businesses, something must be done to alleviate the economic hardship facing our state.”
He echoed similar sentiment in a recent press conference:
“We’re probably going to see an increase, a continued increase in costs that started before this war but are going to accelerate as a result of this war and the longer this war drags out, we need to be prepared for the fact that we may see inflationary rates we haven’t seen in a generation or two generations. For some of us that were around in the 70s and 80s, we remember, once again, that you had interest rates, for example in the savings account that could be upwards of 14%, mortgage rates 18%, credit card rates in the 20s. It was a difficult time back then. We are in uncharted territory. We don’t know what tomorrow’s going to bring because this war has backed up and duck tailed with the fallout from dealing with COVID across this globe as well.”
Under state statute, a tax of .08 cents a gallon is levied on all motor fuel sold or transferred within the state, and smaller taxes are levied on fuel for aviation and watercraft. The governor says that this amendment would immediately suspend the collection of tax on motor and marine fuels, aviation gas, and aviation jet fuel until June 30, 2023.
This action, if approved by the Legislature, would bring direct tax relief at the gas pump for Alaskan families and businesses and help contain the costs of goods shipped within the state, according to the governor. Some of the proceeds from the fuel tax are for the State Department of Transportation expenditures or matches for federal highway funds for maintenance of highways, construction of highways and ferries.
Read the letter and the amendment here.