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Maryland gas tax holiday ends, Virginia leaders split on best way to help taxpayers

Gov. Youngkin says a three-month gas tax holiday could save drivers 27 cents a gallon at the pump. Democrats want to give car owners $50 instead.

TYSONS, Va. — Lawmakers in Virginia will again debate a gas tax holiday Tuesday, but state leaders disagree on what the best solution will be. 

Democrats are pushing a one-time $50 rebate for every Virginian who owns a vehicle, while Gov. Glenn Youngkin (R) is advocating a three-month tax break at the pump for everyone who buys gas in the Commonwealth.

Maryland just wrapped up its one-month gas tax holiday and immediately saw prices soar 22 cents a gallon from the day before. 

"Twenty cents? Damn. Twenty cents is a lot of money," said teenager Divin Ohani, who was trying to scrape together enough cash to drive himself and a buddy to the store.

AAA says the average price of a gallon of gas in Maryland is $3.92, which is up from $3.70 the day before.

Nationally, the average price of a gallon is actually down about 20 cents a gallon from a month ago, which has GasBuddy's Patrick DeHaan wondering if gas tax holidays really make much sense.

"By softening the impact of high prices, that could incentivize Americans to fill up more, it could incentivize Americans to drive more," said DeHaan, a petroleum analyst. "And that, of course, is why prices are so high to begin with."

Youngkin, who ran on a plan for a gas tax holiday, will push the House Finance Committee on Tuesday to approve a tax holiday that could save about 27 cents a gallon for everyone who pumps gas in the Commonwealth, even if they don't live here.

 "Rising grocery prices, rising gas prices, rising utility bills -- we got to get to work to get costs down," Youngkin said on CNBC on Thursday.

Democrats call the governor's plan too expensive and say too much of it will go to out-of-state drivers. 

"We're proposing a $50 payment directly to owners of personal vehicles in Virginia, and up to $100 per household," said Del. Eileen Filler-Corn, the House Minority Leader.

AAA says the average price of a gallon of gas in Virginia is $3.93, almost exactly what is was the day before, and one penny more than Maryland's current price.

With crude oil down more than $20 a barrel from its high in early March, Gas Buddy says prices at the pump may fall over the next couple of weeks.

But between the war in Ukraine and the COVID pandemic, the forecast for prices beyond that is about as murky as what's being pumped from the oil fields.

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