Weekend brings higher gas taxes
California drivers will pay about 3 cents more per gallon in gas taxes starting Friday after state legislators rejected a push to suspend the increase amid soaring costs at the pump.
Drivers will now pay about 36 cents more to refuel a typical sedan, with a 13-gallon tank, from empty. The annual inflationary adjustment to the gas tax will increase the rate by 2.8 cents, from 51.1 cents per gallon to 53.9 cents per gallon.
The tax is built into the price of gas in California, which is hovering around $6.30 per gallon on average — by far the highest in the nation.
The sales tax hike comes after some Democratic state legislators earlier rejected Gov. Gavin Newsom’s proposal to suspend the increase for one year to help drivers cope with sky-high gas prices due to inflation and the war in Ukraine.
Instead, Newsom and lawmakers agreed to send stimulus payments to state income tax filers to help them deal with the effects of soaring inflation.
“To help cover the costs of inflation and rising prices at the pump, Gov. Newsom is getting money into the pockets of Californians — tax refunds worth upwards of $1,050 for many families, the largest such program in state history,” Newsom spokesperson Alex Stack said in an email.
Under the deal Newsom and legislators negotiated, families would receive the money via direct deposits or debit cards. Payments would be capped based on income, with $350 direct deposits or debit cards for individuals making less than $75,000 per year and $200 payments for individuals making up to $250,000. The state would provide additional payments to people with children or other dependents.
The deal comes after legislators threw shade on Newsom’s two earlier proposals to combat rising gas prices by freezing the gas-tax increase and sending $400 tax rebates to vehicle owners.
In January, Newsom proposed giving California drivers a “gas tax holiday” by freezing, for one year, the inflationary adjustment to the tax, saving drivers about $525 million total.
But his proposal hit a wall with Democratic leaders in the Legislature. They said that freezing the tax could reduce “critical funds” needed for road repairs and other transportation improvements.
“Additionally, as oil companies continue to rake in record-high profits, there is no guarantee this relief would be passed onto consumers,” Senate President Pro Tem Toni Atkins, D-San Diego, and Assembly Speaker Anthony Rendon, D-Lakewood (Los Angeles County), said last month.
Newsom’s administration, however, stressed that those moves would only be temporary and that the state would backfill any funding for transportation projects that is lost due to the freezes related to gas and diesel taxes.
Environmentalists and some legislators also balked at Newom’s push to freeze the tax in light of a hard-fought victory to increase it in 2017. Democrats voted at the time to raise the gas tax and tie it to inflation, a move they said was necessary after the rate hadn’t been increased in 23 years, choking funding for roads. Voters rejected a measure to repeal the tax hike in 2018.
“I think the legislators who struggled on it have longer memories of the struggle than he does,” RL Miller, president of Climate Hawks Vote, an environmental advocacy group, said earlier this year.
Newsom’s second proposal, to offer rebates to vehicle owners, also ran into a wall at the state Capitol. Some legislators said the plan would have prioritized vehicle owners at the expense of many lower- and middleincome residents who might not own cars.
That effort is dead after Newsom agreed to the inflation-relief plan, which lawmakers approved Wednesday night.
Republicans, meanwhile, have demanded the state suspend the gas tax immediately, in addition to providing relief payments to drivers. They have repeatedly tried, without success, to force a vote on the issue.
“Even when we have more than enough money to cover road maintenance and repair, the Capitol Democrats still plan on doing nothing to stop the increase of your gas prices,” Assembly Minority Leader James Gallagher, R-Yuba City (Sutter County), said in a statement.
But it’s not just GOP lawmakers who favor suspending gas taxes. President Biden has called for a U.S. gas tax holiday, which would suspend the federal 18cent tax for three months. Several blue states, such as New York, Connecticut and Maryland, have suspended their gas taxes in recent months.
A half-dozen moderate Democrats in the California Legislature also called for suspending the state’s tax for 12 months, though their colleagues killed the proposal.