Economic experts on Delmarva weigh in on possible gas tax holiday

Economic experts across Delmarva are weighing in on the possibility of a federal gas tax holiday and what it could mean for tourism, consumers, and the region economically.

“I think if enacted it would be a good thing,” explained Dr. Sam Hoff, political professor and economist at Delaware State University. “I don’t necessarily buy the idea that it’s gonna increase inflation more than what we’ve already seen.”

Dr. Hoff is among several experts we spoke with who agree that lifting the federal gas tax temporarily would be a good thing for the country. As for Delmarva, some economists feel it would be a huge driver for tourism across the region.

“We have an awful lot of visitors come by vehicle and the decision of, ok if I’m looking at the pump and the cost is either, right now it’s 4.92, so they see it at, just make it easy, 4.75, maybe that’s a mental lift for them to make that trip to Ocean City, Chincoteague, or the Delaware beaches,” stated John Hickman, Business Economic and Community Outreach Network Director at Salisbury University.

Right now consumers pay 18 cents per gallon on gas, and 24 cents a gallon on diesel, with respect to the federal tax on gasoline, and that tax would be suspended for at least three months if a federal suspension is imposed.

Not everyone agrees that a suspension of the gas tax would make that big of a difference though, including Bill Chambers, President and CEO of the Salisbury Area Chamber of Commerce, who wasn’t convinced that it would make a huge difference with respect to local businesses.

“It’s a nice gesture, but I don’t believe it’s gonna make the difference between businesses feeling pain or feeling better,” Chambers told our news department.

While President Biden has publicly supported suspending the federal gas tax to ease the pain at the pump, it’s ultimately up to Congress to approve it, and not all lawmakers are on board with the idea.

“There are some challenges, including the fact that the House leadership, speaker Pelosi, majority leader Stenny Hoyer, have been a little bit reticent of it,” Dr. Hoff explained. “In Delaware, today, Senator Tom Carper came out against that and some other House, Senators have spoken out against that.”

Delaware’s Senior U.S. Senator Tom Carper tweeted Tuesday evening that he would not support a federal suspension on the gas tax and raised concerns over the impact such a measure could potentially have to infrastructure projects across the country.


47 ABC News reached out to Senator Carper’s staff requesting an interview. We are awaiting a response.

The possibility of lifting the federal tax on gasoline could not come at a better time for Marylanders who face an increase of six cents on July 1 to the Maryland State Tax Rate, a move that has concerned many.

“Happening July 1, Maryland right now is on track for a six cent increase in their Maryland State Tax Rate,” Hickman said referring to the potential holiday on the gas tax. “In Maryland, it would be nice because we would net out for that short period of time, so instead of six cents up, we’d be down roughly twelve cents a gallon from where we are.”

Maryland officials have come out in support of a gas tax holiday, specifically Governor Larry Hogan and Comptroller Peter Franchot, who both issued statements Wednesday urging their state legislative leaders and Congress to act.

Governor Hogan called on legislative leaders to convene to figure out a way to ease the pain at the pump by reinstating a statewide gas tax holiday in Maryland.

“Nearly 100 days ago, Maryland became the first state in the nation to suspend the gas tax, and we proved that it can be done successfully to lower prices for working Americans. We have also been calling on President Biden to take action to suspend the federal gas tax, and we are pleased that he has now finally agreed to do so. With the pain at the pump only getting worse, Congress should act immediately to suspend the federal gas tax,” Governor Hogan stated.  “Today, we are also again calling on Democratic leaders in Maryland to take action to address rising gas prices. We are once again calling on the Comptroller to use the same authority he has in the past in order to minimize the impact of the gas tax increase scheduled for July 1. We are again calling on the presiding officers of the General Assembly to convene a special session for the express and sole purpose of passing emergency legislation to suspend the gas tax. I am prepared to swiftly sign a gas tax suspension into law. There is no reason why we cannot come together and get this done before the July 4th holiday to provide much-needed relief for the crushing costs burdening families and businesses.”

Maryland Comptroller Peter Franchot wrote a letter to presiding officers of the United States Congress and the Maryland General Assembly to urge immediate legislative enactment of federal and state gas tax holidays.

“As Maryland’s chief fiscal officer and motor fuel regulator, I call on the leadership of the Congress and – once again – call on the leadership of the Maryland General Assembly to act expeditiously and enact a gas tax holiday until the end of September,” Mr. Franchot wrote. “If both Congress and the General Assembly heed the President’s – and your constituents’ – call to action, residents and businesses here in Maryland will save nearly $550 million over the next three months. These are significant savings for Marylanders, families, and small businesses who are seeing their household budgets and business margins decimated through no fault of their own.”

At least one U.S. Senator has introduced legislation, The Gas Prices Relief Act, which would eliminate the gas tax through the end of the year; however, passage of that bill remains uncertain. At least seven senators have backed that bill, but so far no Republicans have supported it.

Categories: Delaware, Local News, Local Politics, Maryland, Money