ST. PAUL — Fuel prices across the United States this summer have hit an all-time high, but don’t look to St. Paul for relief at the pumps in Minnesota anytime soon.
The price of fuel is highly variable and sensitive to global market forces beyond the control of any state government, but some state leaders have taken steps to ease the pressure on consumers. Connecticut, Florida, Georgia, Maryland and New York have enacted gasoline tax holidays.
Although Minnesota has yet to take steps to reduce the awards, some leaders and candidates have floated similar ideas.
Rep. Dan Wolgamott, DFL-St. Cloud and a group of other DFL lawmakers introduced a bill in February that would suspend the state’s 28.5-cent gas tax from Memorial Day through Labor Day. The bill never received a hearing, and Republicans in the Legislative Assembly, such as House Minority Leader Kurt Daudt, R-Crown,
pointed out that Democrats in the past have supported major gas tax hikes, including Governor Tim Walz’s unsuccessful 2019 proposal to raise the gas tax by 20 cents a gallon.
Walz and Republican gubernatorial candidate Scott Jensen both say they support suspending the state’s 28.5-cent-per-gallon gas tax, but they’ll need state lawmakers pass a bill to do so.
The legislature is currently out of session, and Walz is expected to call a special session in order to get proposals on his desk. The Republican-controlled Senate and the Democratic-Farmer-Labour-controlled House said Thursday they were unable to negotiate what they would do in a special session, so the odds ‘a session to occur soon are weak. And even if that’s the case, lawmakers have plenty of other issues to grapple with besides fuel prices, like figuring out how they’ll use the state’s historic budget surplus to deal with rising crime, fund education and provide tax breaks, as well as a loan bill for public infrastructure projects.
The average price per gallon of gasoline in Minnesota is up about 66% from a year ago, according to the AAA. In mid-June last year, the average cost per gallon was around $2.86. Today it’s near $4.76 — an all-time high for Minnesota, but still below the record national average of $5.
Jensen, the GOP-endorsed gubernatorial candidate, has made the cost of fuel one of the central issues of his campaign. He supports suspending Minnesota’s fuel tax and repealing a law that prohibits companies from selling gas for less than the state average – which his campaign claims would lower the price of gas by up to at 25 cents per gallon. Suspending the tax would cost the state $70 million a month, according to the Jensen campaign, but the cost could be offset by using the state’s record $9.3 billion budget surplus or taxes on auto parts.
Jensen also supports changing policies that affect fuel prices, including accelerating permits for pipelines and refineries and asking the state Department of Commerce to report any steps the governor might take to reduce fuel prices. price.
DFL lawmakers and Walz have also backed the idea of gasoline tax exemptions. In March, Walz joined several other governors in March in asking Congress to suspend the federal gasoline tax. The governor’s office said Walz was also open to a gas tax exemption, though his main goal has been to push the legislature to approve direct payments to families.
How much relief does suspending gasoline taxes offer? Nationally, about 53.6% of fuel cost is tied to the price of crude oil, according to the US Energy Information Administration. Refining costs, profits, distribution and marketing account for 31%. The remaining 16.4% is federal on state gasoline taxes.
Minnesotans pay $0.47 in taxes per gallon of gasoline, of which 18.4 cents goes to the federal government and 28.6 cents to the state. At the current average price in Minnesota, a customer can expect to pay $76.16 to fill a 16 gallon tank. If the state and federal government both suspended their gas tax, it would cost $68.64 to do the same. If only Minnesota suspended its tax, a customer would save about $5 per tank.