Calif. Gas Tax Funds $5B in Local Road Repairs

Colorado's ALT Fuel program provides grant funding to organizations looking to purchase alternative fuel vehicles and provide alternative fuel infrastructure.

A new California gas tax costs 12 cents per gallon and 20 cpg for diesel. Cities announce street repairs while businesses and workers express operations costs concerns.

ASSOCIATED PRESS

By Jonathan J. Cooper

SACRAMENTO, Calif. (AP) — California gas prices are about to go up.

Gasoline taxes will rise by 12 cents per gallon Wednesday — and diesel taxes by even more — to raise money for fixing roads and highways.

It’s the first of several tax and fee hikes that will take effect after Democratic lawmakers approved them earlier this year, a vote that Republicans see as a key issue in the 2018 election.

The price increase for gasoline will be mitigated because it coincides with the annual shift to a winter blend of gasoline, which generally reduces prices by about 6 cents per gallon, said Marie Montgomery, a spokeswoman for AAA of Southern California.

It’s tough to predict how much prices will rise overnight, Montgomery said, but past gas tax increases have generally led to gradual price increases.

“We don’t know. We’ve seen gas prices increase in the last week, so they could be already building that increase in,” Montgomery said. “Or we may see a sizeable hike on Wednesday.”

Diesel taxes will go up by 20 cents a gallon and diesel sales taxes will rise by 4 points to 13 percent.

Californians will also have to pay a fee of $25 to $175, depending on the value of their vehicle, when they renew their registration next year. Zero-emission vehicle owners will pay $100 per year starting in 2020 since they don’t pay gas taxes.

The gas tax increase passed with support from nearly all legislative Democrats and one Republican, capping a yearslong effort by Gov. Jerry Brown to line up support for a dedicated source of road maintenance dollars.

The measure has emboldened Republicans, who have watched their influence diminish as California tilts increasingly to the left. They see higher gas taxes as a winning election issue that could motivate their base and win over voters frustrated with California’s high cost of living.

Republicans put the gas tax at the center of a campaign to recall Sen. John Newman, a Fullerton Democrat who narrowly won his seat last year. Republican candidates for governor and for Congress are backing competing initiatives to repeal the gas tax, one of which would also require voter approval for any future increases.

Californians already pay some of the highest gas prices in the country. On Tuesday, California’s statewide average of $3.04 per gallon was about 57 cents higher than the national average and the highest in the continental U.S., according to AAA.

Assemblyman Travis Allen, a Huntington Beach Republican who has made opposition to the gas tax a centerpiece of his campaign for governor, said the money won’t widen or extend freeways to relieve traffic.

“Californians will still be stuck in the worst-in-the-nation traffic. We’ll just be paying a lot more for it,” Allen said.

The taxes are projected to raise about $5 billion a year to be split between state and local governments. Much of it will pay for fixing potholes and rebuilding crumbling roads and bridges. Some will also pay for public transportation, biking and walking trails, and other projects.

Wednesday’s increase will put the state gasoline tax at 41.7 cents on top of the unchanged federal gas tax of 18.3 cents.

The price of gasoline is driven much more by global supply and demand affecting oil prices than by taxes, said Roger Dickinson, executive director of Transportation California, an advocacy group funded by construction companies and trade unions that lobbied for the tax increases.

“When it’s a price change because of the cost of a barrel of oil, it’s the oil companies or producers that get all the benefits,” Dickinson said. “In this case, the people are going to get a great benefit.”

Copyright 2017 The Associated Press. All rights reserved.

Associated PressCopyright Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

About the author

EfficientGov Staff

EfficientGov is an independent information service providing innovative solutions to fiscal and operational challenges facing cities and towns around the world.