You’d be forgiven for wincing every time you put the pump nozzle back in its slot at the gas station. Since the Iran War started, prices across the country, including in Utah, have skyrocketed.
But for the last month, the Beehive State has had a bit of a break, even if it’s hard to notice.
Beginning July 1, there’s been a 15% cut to the state portion of the gas tax, or a reduction of about 6 cents a gallon. The savings will add up over the six months it’s in effect.
“So it's $40 million in taxes that the people didn't have to pay to the government of Utah,” said Jason Gardner, deputy executive director of the state tax commission. “So in that sense, the people did save $40 million, even if it didn't feel like they saved as much as they thought.”
But a month into the tax break, the state average for regular gas currently sits at $4.35 compared to $3.39 a year ago (or even $3.79 a month ago), making the savings seem smaller in comparison.
“This money does go for funding the roads,” Gardner said. “It's actually the primary source of funding for the roads that we all drive on, and so it is an important funding source.”
The gas tax holiday was part of a broader effort by the Legislature aimed at affordability. Legislative leaders championed the bill, HB575, throughout the session. Republican sponsor Rep. Cal Roberts explained the idea was to “put money back into the pockets of Utahns.”
The tax break was calculated based on projected numbers for July through December. According to data from the Tax Commission, people in Utah pumped 684,383,669 gallons of gas in that time last year.
Gardner said fuel isn't a luxury. People need it regardless of their socioeconomic status, so it doesn't fluctuate much.
“It's fairly flat, which means that we can predict with pretty fair accuracy what usage will be into the future.”
Gardner is sympathetic to drivers, but emphasized the tax break is still saving them money even if it doesn't feel that way.
When it comes to the measure they passed earlier this year, Rep. Roberts said it has bigger promises beyond just the next five months.
“So the idea was number one, cut the gas tax 15%, and then more importantly, I would say long term, what the bill did was it actually cut red tape around midstream pipeline investment, and it streamlined the permitting process,” he said.
He said the new policy aims to increase Utah’s gas supply in different ways, with the hope of bringing down prices in the long run.
“It's difficult to get supply into our market given our geography on the west side of the Rockies,” he said, adding that cutting red tape around pipeline investment could spur more development.
Part of the bill also created an agreement between the state of Utah and local refineries to increase their production by 12% over the next five years, which Roberts estimates at 23,000 barrels per day.
Environmental concerns about air quality have lingered for communities along the Wasatch Front. During the legislative session, Gov. Spencer Cox said the agreements would encourage the production of more Tier 3 gasoline, a cleaner-burning fuel. According to the Utah Office of Energy Development, Tier 3 fuels could decrease vehicle emissions by up to 80% in cars produced in 2017 or later.
Roberts agrees the bill's long-term impact on the state’s gas prices remains to be seen. But he said the tax break was designed to put some money back into Utahns' pockets.
“Is it enough? Can we do more? Probably, but it was really trying to deliver a short-term win for Utahns at the pump."
