Economy

New California gas tax in effect

The tax hike could be slightly offset by a normal drop in gas prices around this time of year.

Jerry Brown April 28, increases the gasoline excise tax by 12 cents a gallon, the diesel fuel excise tax 20 cents per gallon, the sales tax on diesel to 5.75 percent, and raises the vehicle registration fee $25 - $175, depending on the value of the vehicle on January 1.

California's gas and diesel taxes will rise beginning Wednesday to pay for repairs to the state's crumbling roads and bridges.

"If we are going to ask drivers who utilize California roads to pay an extra 12 cents per gallon and promise billions of dollars for infrastructure", he said, "some of that must reach minority trucking firms, minority engineering firms, real estate firms, architectural firms, all those types of services that will be needed to build and fix those roads". 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.

The gas tax hike is part of SB 1 which narrowly passed the State Legislature in April.

California's fuel tax increase is the largest of any state since New Jersey's 23-cent increase a year ago, said Patrick DeHaan, an analyst for the Gasbuddy.com website. However, because gas stations are in the middle of switching from the summer blends to less expensive winter blends, gas prices might not rise the full 12 cents a gallon.

However, California drivers regularly experience gas price fluctuations much larger than the 12-cent increase, with swings of a dollar or more from year-to-year or even station-to-station, based on factors like world markets and traffic patterns.

Ultimately, what has the greatest effect on what drivers pay at the pump is the global market while low gas prices in recent years have left the state strapped for cash to fund repairs.

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.

"It's like you never got a raise since 1990 and then people wonder why the roads are in bad condition", Rentschler said.

Caltrans announced on August 17 that in anticipation of the funds, the California Transportation Commissions authorized nearly $690 million in funding to be put towards 32 major "fix-it first" projects will be started a year earlier.

Republican leaders are trying to gather signatures to place a ballot measure repeal of SB1 before voters next year.

"It's wildly unpopular and for good reasons". He pointed to high-speed rail, a state report that Caltrans is overstaffed and the fact that officials previously diverted transportation funds toward other uses as examples.

"Whether (the price) goes up or down, I need gas", she said.

The MTC's Rentschler said it's unfortunate transportation funding was diverted during the recession, and agreed encouraging efficiencies in government is important.

While California's gas taxes are high compared to others in the nation, a major reason is because it prioritizes issues like air quality and environmental regulations.

"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. "Around the country, infrastructure suffers when investment doesn't keep pace with the needs". "The bottom line is the basic revenue sources, which are user fees, have not kept up with inflation".



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