Suspend state’s gas tax, invest in domestic energy production
This week, the average price of a gallon of gas in California reached $6.38. Central Valley families are feeling the impacts of rising costs at the grocery store, on their monthly energy bills, and at the gas pump. With many here in the Valley packing their cars for summer road trips, the upcoming gas price hike is going to make that holiday road trip for the Fourth of July even more expensive.
Despite having the ability to ease this pain at the pump, the Democratic supermajority in Sacramento and Governor Newsom have failed to act to provide relief from the state’s 51 cent per gallon gas tax. Drivers are set to be paying an extra 3 cents per gallon come July 1 thanks to the state’s inaction on the annual gas tax hike. Californians are already paying the highest gas prices in the country, and the fact that our prices are about to go up even more is unacceptable.
In the face of these record prices, the best some of our leaders can do is pass the blame for high gas prices on corporate price-gouging. State Democrats have launched a committee to investigate gas price gouging, and Congressional Democrats put the Consumer Fuel Price Gouging Prevention Act on the floor for a vote. Both of these are political stunts which ignore the fact that fewer than 5 percent of gasoline retailers in the United States are owned by any large corporation while more than 95 percent are independently owned small businesses.
These investigations and political messaging bills won’t bring relief for Valley residents, but that doesn’t mean real solutions aren’t on the table. In March, I led the California Republican delegation in a letter to Governor Newsom urging the state to temporarily suspend the gas tax. In May, when the legislature missed their deadline to stave off the 3 cent increase, we again called on the state to act.
This week, President Biden called on Congress to suspend the federal gas tax for three months and encouraged states to do the same. While I agree that a state gas tax holiday in a state like California makes sense, a federal gas tax suspension is not a viable solution to the record-breaking gas prices President Biden’s policies helped to create.
A federal gas tax holiday is a political band-aid that will have minimal impact while depleting the Highway Trust Fund, impacting critical highway maintenance and construction projects. This idea also has virtually no path forward in Congress. Even Speaker Pelosi has called it “very showbiz.” Just like the president’s decision to deplete our strategic petroleum reserves and pass the blame to oil companies, this proposal is not a serious one.
Like the federal gas tax, California’s gas tax is also an important funding source for several state transportation programs. Unlike the federal government, which is trillions of dollars in debt, California has an anticipated budget surplus of nearly $97 billion, more than enough to sustain a temporary suspension. The state should pass these savings on to hardworking residents instead of hoarding taxpayer money when people are struggling.
Ultimately, the only solution that will lower gas prices in the long-term is removing regulatory barriers to American energy independence. It’s true that Putin’s war in Ukraine severely impacted global oil markets and caused supply of oil to go down at a time when demand was going up. President Biden didn’t have control over global events that rocked the market, but his administration bears responsibility for actively pursuing policies that harm the oil and gas industry.
Expediting the approval of pipelines and energy development, fast tracking the federal permitting process, and ending the federal freeze on oil and gas leases are all tools at Biden’s disposal. Each of these actions would provide greater stability for our domestic energy sector, allowing them to invest in increased production capacity.
American energy independence means less instability at the pump when global events disrupt the supply of energy. It is not sufficient for our leaders to keep passing the blame to Putin and corporations. We need both long- and short-term solutions. Investing in domestic energy production and suspending the state’s gas tax are actions that would help to keep gas prices low for Central Valley families.