California gas taxes will rise July 1, but some lawmakers have called for a freeze on higher levies, citing the financial burden of the recession caused by the corona virus on millions of state residents.
The automatic increase pegged to inflation – the third increase in four years – came when a prolonged dispute over the gas tax law that came into effect three years ago flared up again in the Capitol building.
Taxes are set to increase by 3.2 cents, to 50.5 cents per gallon, and state officials expect to bring an additional $ 440 million to state coffers in the coming fiscal year. The increase was triggered by an increase in the consumer price index and was built into SB 1, a law that pushed taxes by 12 cents per gallon in 2017 and 5.6 cents last year.
Overall, the fuel tax is expected to generate $ 7 billion during the new fiscal year to pay for road and bridge repairs. But a group of Republican lawmakers said this was the wrong time to raise taxes in California, more than 6 million of whom had lost their jobs during the COVID-19 pandemic.
Assemblyman Vince Fong (R-Bakersfield), deputy chair of the Assembly Transportation Committee, said the increase was “increasingly rubbing Sacramento salt into the wounds of California citizens who are struggling with uncertainty and real financial distress” during the coronavirus crisis.
Republican Speaker Marie Waldron of Escondido said it was “inconceivable” that the state would raise the cost of California citizens today.
“Unemployment continues to rise and all of California’s ways are not affordable before the pandemic still exists – delaying the gas tax increase is the most doable,” Waldron said.
Delaying or canceling the gas tax increase will require votes from the Legislature, and Democrats who control the Senate and the State Assembly say they have no plans to take action. Newsom has not yet proposed to stop the increase, the governor’s spokesman said.
State Senator Holly Mitchell (D-Los Angeles), chair of the Senate Budget Committee, said that local governments who were financially injured because of the pandemic depend on tax revenue to repair potholes with holes.
“When we talk about stimulating our local economy and how long infrastructure projects are, I don’t think now is the time to take our feet off the pedals,” Mitchell said.
He said the effect of the tax increase on consumer pocketbooks was blunted by the fact that gas prices in California fell from what happened a year ago. The average price of a gallon of gas Friday was $ 2.98, compared with $ 3.86 the average a year earlier, according to American Automobile Assn.
Assemblyman Phil Ting (D-San Francisco), chairman of the Assembly’s Budget Committee, agreed that the Legislature must allow the increase to take effect.
“Annual [consumer price index] adjustments allow us to continue the progress we are making to repair our destroyed roads and bridges, “Ting said.
Newsom’s statewide order in mid-March to keep Californians at home during a significantly reduced pandemic in the state. Analysis by the California Department of Transportation in April showed that the volume of traffic on state roads fell by about 35% compared to the same time last year.
Although having fewer people on the road as long as a home-stay order allows the road construction project to be accelerated, it also negatively impacts the amount of money available.
The country’s estimated gas and diesel tax revenues have declined by almost 7% this year and are projected to fall 7.6% in the fiscal year beginning July 1. This reduction will mean a loss of revenue of around $ 1.2 billion over two years, although the governor’s budget estimates the state will receive $ 7 billion in fuel taxes for the new fiscal year.
For those who drive electric cars and do not pay gas taxes, the cost of upgrading the new road to $ 100 starts on July 1, but only for vehicles with no emissions with the 2020 model or newer.
Although closed business orders are reduced across the state, the prospect that a slow recovery can continue to reduce fuel tax revenues keeps officials watching closely.
“Regarding revenue projections, Caltrans is monitoring every potential impact on maintenance and construction projects going forward,” Caltrans spokesman Matt Rocco said. “However, at the moment, all ongoing projects are expected to continue without delay or cessation.”
Because California has the second highest gas price in the country, after Hawaii, the issue of fuel tax has long been debated. In 2018, voters were recalled from their current position Senator Josh Newman (D-Fullerton) for voting in favor of a gas tax increase.
Voters that year rejected an initiative that would lift the gas tax increase and instead agreed to a separate voting step, Proposition 69, which requires revenues to be spent on transportation projects.
The debate reignited last month when the Senate budget subcommittee rejected a proposal by Newsom to divert $ 130 million in interest from the State Highway Account, which was funded by gas taxes, and instead used the funds to balance the general funding budget.
Mark Monroe, assistant budget manager for the Newsom Ministry of Finance, said in a May 24 legislative hearing that transfers “are an important component of a broader balance of the state budget.”
But after the Office of the Independent Legislative Analyst suggested MPs negotiate with their lawyers for an opinion on whether such transfers are legal, both Democratic and Republican legislators said such actions would be contrary to what was promised to voters in Proposition 69.
“I think this is a broken promise,” Senator Mike McGuire (D-Healdsburg) said of the proposal. “I believe this money can be spent better the intended way, improving California’s roads.”
McGuire noted the reduction in vehicle use during the pandemic had cost the state gas tax by $ 600 million for repairs.
“We have decreased revenue because of the situation we are facing, and we will need every penny to go to the road,” said Senator Brian Dahle (R-Bieber), who opposed the transfer of $ 130 million to public funds. “I don’t think this is the time.”
