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Will Governor Youngkin include a gas tax holiday in his budget amendments?

Robyn Crozier
Ross D. Franklin
/
AP
A driver fills up on gas.

House Republicans and Senate Democrats struck a deal on a possible budget that did not include a gas tax holiday. But that's not the end of the story. The governor will get a chance to weigh in.

Governor Glenn Youngkin wants drivers to have a special kind of holiday this summer – a suspension of the state gas tax for three months. That could be among his budget amendments, which will be sent to lawmakers later this week.

Carl Davis at the Institute on Taxation and Economic Policy says that might end up being more of a celebration for the oil industry.

"A gas tax cut isn't a direct tax cut for the driver," Davis says. "It's a tax cut further up the supply chain for the oil industry, and the hope is that those businesses will pass along the tax savings to drivers."

But he says that isn't what happened in Indiana or Illinois, where about 30% was pocketed by the oil industry when they tried a gas tax holiday.

Chris Wodicka at the Commonwealth Institute says the families that benefit will not be the ones that rely on public transportation.

"Because families with high incomes tend to be more likely to own a vehicle or own multiple vehicles, a lot of the lost revenue to the state actually flows to those individuals who are more likely to have one or multiple vehicles and tend to drive a fair amount," Wodicka explains.

After lawmakers consider Youngkin’s amendments later this week, the governor will get a chance to use his famous line-item veto, stripping out anything he doesn't like before the final deadline at the end of the month.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.