Skip to Content Facebook Feature Image

Gas prices are high. But do the numbers support suspending state gas taxes?

News

Gas prices are high. But do the numbers support suspending state gas taxes?
News

News

Gas prices are high. But do the numbers support suspending state gas taxes?

2026-04-02 03:02 Last Updated At:13:13

With the average price of a gallon of gas topping $4 nationally, some federal and state officials have talked of temporarily reducing motor fuel taxes to provide relief to motorists.

So far, Georgia and Utah are the only states to suspend all or part of their gas taxes as the war in Iran has pushed fuel prices higher. Others are considering it. But there are a variety of reasons that policymakers may not relax gas taxes, including concerns about government finances, doubts about the action's effectiveness and uncertainty about how long the war will last.

More Images
Fuel transport truck driver Terry Bowden refills at a gas station, Monday, March 30, 2026, in Nashville, Tenn. (AP Photo/George Walker IV)

Fuel transport truck driver Terry Bowden refills at a gas station, Monday, March 30, 2026, in Nashville, Tenn. (AP Photo/George Walker IV)

A Chevron gas station in Alameda, Calif. displays gas prices on March 23, 2026. (AP Photo/Terry Chea)

A Chevron gas station in Alameda, Calif. displays gas prices on March 23, 2026. (AP Photo/Terry Chea)

Vehicles drive past a CITGO gas station in the Queens borough of New York, Tuesday, March 31, 2026. (AP Photo/Yuki Iwamura)

Vehicles drive past a CITGO gas station in the Queens borough of New York, Tuesday, March 31, 2026. (AP Photo/Yuki Iwamura)

A sign shows the price of gas at a store, Tuesday, March 31, 2026, in Freeport, Maine. (AP Photo/Robert F. Bukaty)

A sign shows the price of gas at a store, Tuesday, March 31, 2026, in Freeport, Maine. (AP Photo/Robert F. Bukaty)

Here's a look, by the numbers, at the debate:

The two states to suspend gas taxes this year took significantly different approaches. Georgia's 60-day suspension of its 33-cent-a-gallon gas tax took effect once Republican Gov Brian Kemp signed it into law on March 20, making it the first state to act since the war started. Three days later, Republican Utah Gov. Spencer Cox signed a law temporarily trimming 6 cents off the state's 38-cent-a-gallon fuel tax. But the six-month reduction won't begin until July 1.

Retail gas stations have charged consumers an average of 38 cents per gallon above wholesale prices over the past five years, according to Jeff Lenard, a spokesperson for the National Association of Convenience Stores. Their profits after expenses often are less than half that, he said. Meanwhile, the daily price for a barrel of oil has swung dramatically during the war with Iran — sometimes by the equivalent of around 40 cents a gallon, Lenard said.

Why do those numbers matter? They highlight the complexity of setting gas prices. When a gas tax is suspended, motorists may not see an equivalent reduction in retail prices. That's made Republican Florida Gov. Ron DeSantis hesitant to repeat a gas tax suspension he approved when prices last spiked in 2022.

“Our ability to influence the fuel prices are really marginal at best,” DeSantis said in March, adding: “I don't think the consumer really felt relief.”

California charges a nationally high gas tax of 61 cents per gallon, with additional fees on top of that. The tax contributes to California's highest-in-the-nation gas prices, which averaged $5.89 a gallon on Wednesday, according to AAA. Several Democratic and Republican gubernatorial candidates have called for suspending the gas tax. But the proposal hasn't gained traction in the Democratic-led Legislature, where some are concerned about how to make up for the lost revenue.

Republicans in Maryland pushed for a 30-day gas-tax suspension. But their attempts were rejected by the Democratic-led General Assembly. A spokesperson for Democratic Gov. Wes Moore said a one-month suspension could have blown a $100 million hole in the state's transportation budget even as officials already were cutting spending and shifting money to make up for a projected shortfall in the state's overall budget.

A better approach would be to end the war, said Moore spokesperson Ammar Moussa, adding: “The best way to bring prices down is to address the source of the pain.”

Since the war began on Feb. 28, Trump has repeatedly has said it could be over soon while also threatening to widen the conflict.

Whether states have the money to make up for lost fuel taxes is a pivotal question. Georgia is dipping into its surplus. In Connecticut, Democratic state Senate leaders have suggested that Gov. Ned Lamont could tap into the roughly $330 million remaining in an emergency fund meant to respond to federal government actions to help offset a proposed one-month suspension of the state’s 25-cent-a-gallon gas tax.

“The fund was created precisely for situations like this: when federal actions create hardship for Connecticut families,” Senate President Pro Tem Martin Looney and Majority Leader Bob Duff said in a statement.

A spokesman for the Democratic governor said Lamont is willing to work with lawmakers on “a smart and strategic pause to the state's gas tax.”

Gas taxes generally pay for building, expanding and repairing roads and bridges. Unless funds are shifted from elsewhere, suspending a gas tax means less money for transportation projects, including some that may already have been budgeted.

In South Carolina, the state gas tax provides about $800 million yearly, helping to fund nearly $7 billion of projects ranging from safety improvements on two-lane roads to a massive overhaul of interstate interchanges. Republican Gov. Henry McMaster worries that major projects would take longer and cost more if tax revenue were cut. He dismissed the suspension of gas taxes as a “sort of knee-jerk reaction.”

“We’d like them all to be lower and lower,” McMaster said, “but that’s one we should not take any money out of.”

Associated Press writers Jeffrey Collins, Susan Haigh and Brian Witte contributed to this report.

Fuel transport truck driver Terry Bowden refills at a gas station, Monday, March 30, 2026, in Nashville, Tenn. (AP Photo/George Walker IV)

Fuel transport truck driver Terry Bowden refills at a gas station, Monday, March 30, 2026, in Nashville, Tenn. (AP Photo/George Walker IV)

A Chevron gas station in Alameda, Calif. displays gas prices on March 23, 2026. (AP Photo/Terry Chea)

A Chevron gas station in Alameda, Calif. displays gas prices on March 23, 2026. (AP Photo/Terry Chea)

Vehicles drive past a CITGO gas station in the Queens borough of New York, Tuesday, March 31, 2026. (AP Photo/Yuki Iwamura)

Vehicles drive past a CITGO gas station in the Queens borough of New York, Tuesday, March 31, 2026. (AP Photo/Yuki Iwamura)

A sign shows the price of gas at a store, Tuesday, March 31, 2026, in Freeport, Maine. (AP Photo/Robert F. Bukaty)

A sign shows the price of gas at a store, Tuesday, March 31, 2026, in Freeport, Maine. (AP Photo/Robert F. Bukaty)

NEW YORK (AP) — Tomatoes, ubiquitous in everything from fast-food burgers to haute cuisine, are taking on a new role beyond the plate: A nagging reminder of rising costs.

Prices for those red orbs have soared more than any other food product over the past year to cement a spot as one of the consumer headaches du jour.

“The tomato has become a symbol of something much deeper,” says Isaac Bernal Carbajo, a New York City chef who lamented life's “simplest pleasures” falling victim to price increases. “Something as basic as buying fresh vegetables is starting to become a serious financial decision for many families.”

Tomato prices are up about 40% over a year ago, according to the latest Consumer Price Index, dwarfing increases for other groceries, including coffee (up 18.5%), beef roasts (up 17.8%) and frozen fish and seafood (up 12%), among other products that have become symbols of America’s affordability squeeze.

A separate inflation gauge released Thursday showed that overall prices increased 3.8% in April from a year earlier, the highest reading in nearly three years.

Alongside crop yields, experts blame price increases for tomatoes, in part, on two pillars of President Donald Trump’s second-term policies: the Iran war and tariffs. The war spiked gas prices and increased shipping costs. Meantime, the U.S. withdrew from a deal allowing duty-free imports of tomatoes from Mexico, which grows most of America's supply.

Usha Haley, a Wichita State University economist, says it's “a perfect storm of trade policy, extreme weather and Mideast policy.”

American tomato farmers cheered the withdrawal from the tomato deal last July, saying it would help rebuild their shrinking industry. But for consumers, it's been painful. Though the U.S. withdrew from the Mexico tomato deal in July, it took time to see the impact in the produce aisle, with more imports in late winter and early spring.

When the tomatoes arrived, they were slapped with a 17% tariff.

“Tariffs are undeniably a big driver of the price inflation,” says Brett Massimino, a Virginia Commonwealth University business professor. “Because the U.S. relies on Mexico for the majority of its tomato supply, any changes in trade policy can have a large impact.”

U.S. tariffs collected on tomatoes ballooned from just $16,424 in 2024 to nearly $4.6 million, according to federal data, a staggering 27,879% increase.

As the cost trickles down, outraged shoppers have pulled out their phones in the produce aisle, shooting videos lamenting costs they said quadrupled, with some vowing to plant a garden to avoid prices of up to $8 a pound. But the impact has been most pronounced for businesses that rely on tomatoes as a key ingredient in their kitchens.

MarginEdge, which tracks prices for restaurants, says grape tomatoes have increased most — 65% in just a month — but prices have gone up across all types of tomatoes.

Phillip Coles, a professor of supply chain management at Lehigh University, says prices should drop later in the year when domestically grown tomatoes are harvested. Higher prices, he says, will also “induce farmers to increase planting to meet the demand, but this takes longer because of the lead time.”

Meantime, it's translating to a big hit for businesses like Snarf’s Sandwiches, which puts a tomato in nearly every sandwich it makes.

Wayne Humphrey, chief operating officer of Snarf’s, which operates dozens of stores in Colorado, Missouri and Texas, said cases of tomatoes went from costing him $27 to $93 in the space of a year, piled on top of rising expenses for other ingredients including bread and beef, as well as increased labor costs.

“That single ingredient now costs us more than $1.7 million in additional spend annually,” says Humphrey. “The math is getting harder to ignore.”

Associated Press writer Dee-Ann Durbin contributed to this report. Matt Sedensky can be reached at msedensky@ap.org and https://x.com/sedensky

Tomatoes await customers on the shelves of a supermarket in New York on Tuesday, May 26, 2026. (AP Photo/Matt Sedensky)

Tomatoes await customers on the shelves of a supermarket in New York on Tuesday, May 26, 2026. (AP Photo/Matt Sedensky)

Tomatoes await customers on the shelves of a supermarket in New York on Tuesday, May 26, 2026. (AP Photo/Matt Sedensky)

Tomatoes await customers on the shelves of a supermarket in New York on Tuesday, May 26, 2026. (AP Photo/Matt Sedensky)

Recommended Articles