Policy analysts: Clean fuel standards proposal dwarfs gas tax holiday pitch

The average price of a gallon of gas in Minnesota Friday was $3.439 per gallon.

(The Center Square) — Five Minnesota legislators are pitching a gas tax holiday from Memorial Day through Labor Day this year as a measure to relieve Minnesotans from high inflation.

The average price of a gallon of gas in Minnesota Friday was $3.439 per gallon compared with a national average of $3.572 per gallon, according to AAA calculations.

State Reps. Zack Stephenson, DFL-Coon Rapids; Kaela Berg, DFL-Burnsville; Jessica Hanson, DFL-Burnsville; Dave Lislegard, DFL-Aurora; and Dan Wolgamott, DFL-St. Cloud, announced the proposal in a videocast.

“For the first time in decades, Minnesotans are confronting the reality of high inflation,” Stephenson, chair of the House Commerce Committee, said. “Food, health care, housing, and energy are all seeing fast-rising prices. Working families are hurting — and hurting bad.”

Center of the American Experiment economist John Phelan told The Center Square in a statement Friday the tax holiday is a bad idea.

“Tax holidays are generally considered to be awful,” he said. “And if they are so concerned with high gas prices, why do they want to impose fuel standards that will massively hike the price of gas in Minnesota? They aren’t really serious about relieving the pressure of higher gas prices. They are just spooked because it’s election year.”

Stephenson is an author of HF 2083, which proposes establishing a standard to reduce carbon intensity of transportation fuels.

“The California fuel standard (CFS) would force the average Minnesota family to pay an additional $210 to $570 for gasoline every year,” Center of the American Experiment Policy Fellow Isaac Orr wrote in an article Friday. “The cost of the CFS dwarfs the expected $73 savings Minnesotans could expect to reap from a three-month gas tax holiday.”

Stephenson said families aren’t sure how they will balance their budgets, particularly because of high gas prices, and prices tend to rise in the summer.

“Russia’s unprovoked attack against Ukraine will drive gas prices even higher,” he said.

The legislators propose using general fund dollars to offset the anticipated revenue raised through the state’s 28.5 cents per gallon gas tax, a House DFL news release said.

The release said Department of Revenue figures indicate the state’s gas tax raised just over $207 million. Minnesota is projected to have a $7.7 billion surplus.


Mary Stroka

Mary Stroka is a contributor at The Center Square.