PROVIDENCE, R.I. (WPRI) — Democratic gubernatorial candidate Nellie Gorbea on Wednesday called for Rhode Island to stop collecting the state’s gasoline tax as prices soar following Russia’s invasion of Ukraine.
In a statement, Gorbea urged Gov. Dan McKee to “pause the gas tax to provide immediate relief to the many Rhode Islanders facing higher prices at the pump right now.” She did not spell out whether she was suggesting he issue an executive order, as opposed to signing a bill implementing the policy.
The state gas tax in Rhode Island is 34 cents per gallon, plus a 1-cent surcharge for underground storage tanks. The federal gas tax has been 18.4 cents per gallon since the 1990s.
The gas tax generated $137 million for the state during the most recent fiscal year, which ended June 30, according to the R.I. Department of Revenue.
Asked how long Gorbea thinks the tax should be waived, spokesperson Biana Suchite said, “The gas price increase is tied to the Russian invasion of Ukraine. She would pause it until prices come down to the level they were prior to the horrible attacks on Ukraine.”
“She also understands that this type of price gouging is also why our state needs a much more robust strategy to provide public transit and alternatives in renewable energy,” Suchite said.
The price of gas in Rhode Island had soared to $4.17 per gallon as of Monday, the highest nominal price on record and up by 58 cents from a week earlier, according to a weekly survey by AAA.
An increasing number of elected officials and candidates locally and nationally have been calling for a temporary halt in gas tax collections to deal with spiking fuel prices.
In Rhode Island, Republican state senator and 2nd Congressional District candidate Jessica de la Cruz has been pushing a bill that would see the state stop collecting the gas tax through Dec. 31. One of her Democratic rivals, Seth Magaziner, has called for temporarily suspending the federal gas tax and replacing the revenue with a 15% minimum tax on corporations.
Separately, Democratic U.S. Sen. Sheldon Whitehouse has called a news conference for Thursday to promote a bill he has introduced that would levy a tax on large oil companies based on the increases in the price per barrel since before the pandemic. The revenue would be rebated to households.
As of Wednesday evening, only one of Gorbea’s Democratic rivals — Luis Daniel Muñoz — had responded to her idea, saying it was “an opportune time for the proposal,” while also suggesting changes to tangible taxes and supplemental wage programs.
The campaigns of McKee, Helena Foulkes and Matt Brown have not yet issued statements on the idea.
Speaking to reporters earlier this week, McKee said he and legislative leaders are looking at “multiple ideas” if state revenue comes in higher than expected when new forecasts are released in May. But he also cautioned about the cost of a gas tax pause.
“Right now on every penny it’s about $4 million, so if you did that for a year, every penny’s about $4 million,” he said. “So we’ve got to make sure we have the funds to give the tax relief. But every option is one that we can consider.”
McKee said he stands by the budget he proposed in January, saying it includes “a great deal of tax relief” such as a new tax break for veterans and the continued phaseout of the municipal car tax. One option being considered if revenue ticks up in May is to speed up the car tax phaseout, he said.
In 2014, lawmakers voted to index the gas tax to inflation so that it would rise automatically in the future. Every other year, the state measures how much the current gas tax would go up based on the previous year’s inflation rate, and if the amount rounds to a penny, the tax is increased.
The tax has risen twice since that policy began, by two cents total. (The last time the inflation check was done, in 2020, it only came to 34.4760 cents, so the tax rounded down to stay at 34 cents a gallon.)
Out of each 34 cents collected per gallon — plus the extra penny for underground storage tanks — 20.25 cents goes to the R.I. Department of Transportation; 9.75 cents goes to RIPTA; 3.5 cents goes to the R.I. Turnpike and Bridge Authority; 1 cent goes to the R.I. Department of Human Services; and a half-cent goes to the Underground Storage Tank Trust Fund.
De la Cruz has suggested Rhode Island can replace the lost revenue from halting the gas tax with some of the federal money flowing into the state since President Biden took office. The state is currently sitting on roughly $1 billion in American Rescue Plan Act funds and is expecting over $2 billion from the bipartisan infrastructure law, though Congress has put some limits on how both pots of money can be used.
The state also ran a surplus of over $500 million in the last fiscal year thanks in part to federal reimbursements for spending tied to the pandemic.
Ted Nesi (firstname.lastname@example.org) is a Target 12 investigative reporter and 12 News politics/business editor. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter and Facebook
Eli Sherman and Kayla Fish contributed to this report.
An earlier version of this story misstated the amount of the state’s budget surplus.