State gas tax goes up starting July 1st
CENTRAL COAST, Calif. (KION) On July 1, California's gas tax is increasing to 51.1 cents, making Californians pay a total of 83 cents per gallon in state taxes.
In April 2017, Governor Jerry Brown passed Senate Bill 1, also known as the Gas Tax Law, which increased California's gas tax by $0.12 in November 2017 to raise $5 billion annually. The gas tax is then increased annually according to inflation rates. In July 2019 it increased 5.6 cents, in 2020 3.2 cents, and this year 0.6 cents.
SB1 is also known as the California Road Repair and Accountability Act of 2017 which splits the revenue between state and local governments. Most of the money going to fix potholes and rebuild crumbling roads, bridges and public transportation.
The gas tax revenue pays for project like $924 million dollars Caltran's allocated earlier this year to improve critical transportation infrastructure around the state. For example, $13 million dollars from that project went to repair the 1 Highway that suffered from a mudslide in January.
California has the highest gas prices in the United States according to AAA. A campaign for the 2018 election tried to repeal the 2017 Gas Tax Law, but voters ultimately voted against the proposition.
Jose Olivas who works in the trucking industry said it's the price we pay for the public services we get in California.
"I don’t mind, this part of something else. There’s other places that don’t like paying taxes and they’re struggling with other things," Olivas said. "Part of those taxes go to pay for public services."
On the other hand Santiago Andiano who comutes from Salinas to San Jose for work said he pump's his tank nearly three times a week.
"I'm not very happy out it, because they're already pretty high," said Andiano. "I don't know how bad it will impact me financially, but it will a little."
While the cent increase in the state's gas tax doesn't seem like much, Californians pay an average of $1.18 cents per gallon in government fees and taxes.
Kara Greene is a spokesperson for Western States Petroleum Association which represents companies in the oil industry.
"Californians really feel the price of gas in the summer. The state has a specific fuel blend that is mandated. In addition to that, there's an increasing state federal taxes fees," Greene said. "The first dollar and 18 cents that every California consumers pay on a gallon of gas is going to climate programs, like cap and trade and the low carbon fuel program."
The image below shows, the breakdown of taxes and fees Californias are currently paying before the July 1st increase.
The revenue generated by these climate change programs Greene mentioned
Cap and Trade is a strategy California uses to reach its goal of reducing its greenhouse gas emissions. The idea is to put a cap on the amount of carbon dioxide and related pollutants companies emit, essentially making businesses pay for their greenhouse gas emissions. The trade component is supposed to give companies an incentive to reduce their emission or trade for more allowances. The low carbon fuel program has a similar idea which is to "encourage the use of cleaner low-carbon transportation fuels in California."
If you haven't noticed, gas prices in the summer tend to go up in California. While supply and demand play a major role in the price of gas, so does a fuel blend gas stations have to use. The blend increases the amount of ethanol in gasoline to reduce smog emissions, but this strict formula is more expensive and difficult to produce.
