Kentuckians could soon see higher prices at gas pumps due to fight over tax break

ERLANGER, Ky. (WKRC) – Drivers across Kentucky could soon see higher prices at the pump as a political fight in Frankfort threatens to shrink the reach of a temporary gas tax break.

Gov. Andy Beshear last month used an emergency executive order to reduce Kentucky’s state gas tax statewide by 10 cents. Under laws put in place by the General Assembly after COVID, those emergency orders expire after 30 days and can only be extended in counties or cities that ask to be included.

As of Thursday, that number was 37, with Beshear saying some cities dropped out after pressure from Republican lawmakers.

“Somehow, Republican legislators have made this political. They even called it political pandering. Decreasing gas prices for our families is somehow political pandering,” Beshear said.

Republicans have argued the tax reduction would cut into the state’s highway funding. Retiring state Sen. Jimmy Higdon of Lebanon raised concerns in a transportation budget committee meeting about the impact on the road fund, which was estimated at $26 million less.

“I won’t be here in January, but if I were, I would want to know what communities did it and how much money they took from the road fund. And I would make sure that any shortage we had came out of their allotment, their roads, and their projects in their district,” Higdon said.

Beshear acknowledged the estimated hit but said the state can absorb it.

“Certainly on the state side, yes, it may be a $26 million hit for one month. We have $3 billion in our savings account. I’m going to add another 300 million dollars, if not more, to it. We can take it. It won’t hurt us. But it is breaking our families,” Beshear said.

When asked Thursday whether any local leaders told him they wanted to opt in but backed out, Beshear declined to identify anyone.

“Yeah, I’m not going to put them on the spot. They’re in a tough spot,” said Beshear.

In Northern Kentucky, the cities opting into the extension included Alexandria, Covington, and Erlanger, along with Glencoe in Gallatin County and Falmouth in Pendleton County.

Covington Mayor Ron Washington said he asked to be included because of what he is hearing from residents and said he has not been pressured by political leaders.

“This is where my pressure is coming from. My everyday community members are talking about not only the cost of fuel but the cost in general to make ends meet. That’s where the pressure comes from. I’ve not received a call from anybody on either side of the aisle,” Washington said.

The offices of the speaker of the House and the Senate president declined comment. Local Republican state Sens. Chris McDaniel and Steve Rawlings also declined comment.

Beshear also wrote President Trump supporting any reductions in the gas tax and telling him Republicans in Kentucky have called the governor’s actions pandering, while Trump has mentioned lowering the federal gas tax. Kentucky joined Indiana in taking action on gas taxes, and the White House is considering similar federal action.

Kentucky’s current emergency order will continue through June 30. In Indiana, Gov. Mike Braun removed all state gas taxes for a reduction of about 63 cents a gallon. That tax holiday will remain until July 7.