California, where the cost of a gallon of gasoline is more than $1 above the national average, increased its Gas Tax on Thursday. The increase is small – six-tenths of a cent but brings the highest-in-the-nation Gas Tax to 51.1 cents. The average cost of a gallon of gas is $4.28, compared to $3.10 across the U.S.
The hike is part of a road repair bill the California legislature passed in 2017 that increases Gas Tax and vehicle registration fees to pay for bridge and road repairs. The tax is increased based on the California Consumer Price Index. When the bill took effect in November 2017, it raised the state’s Gas Tax by 12 cents. Prices went up another 5.6 cents in 2019 and 3.2 cents in 2020.
California is facing a tax increase which is a historic $75 million budget overflow, thanks to a booming Silicon Valley, a thriving stock market and high taxes on high earners. Meanwhile, California is due to receive $26 billion in federal aid.The surplus drove Governor Gavin Newsom, who is fighting against a recall election, to propose sending cash payments to middle-class residents. Republican lawmakers last week called for a suspension of the excise tax on gas, noting the budget surplus.
State Senate. Brian Jones, R-Santee, said that rather than permitting Governor Newsom to run around the state handing out millions of dollars in free lottery tickets and other chum, we should instead use the budget surplus to reduce the obscene excise tax on gasoline purchases. The California Republican party too decried Thursday’s hike.