California Puts $52 Billion Fuel Tax Into Play

The extra funds will be dumped into road and bridge repairs.

Shell

To rebuild aging highways and bridges, the state of California has opted for a fuel tax to fund a $52 billion program. To start the process, Governor Jerry Brown signed the bill into law on Friday, a decision which will raise tax on gasoline from 28 cents per gallon to 40 cents per gallon. Diesel fuel will also see an increase of 20 cents per gallon over the next ten years. EV owners will be required to pay $100 per year in lieu of fossil fuel costs, rounding out the measure for everyone.

The rule was passed via two-thirds vote in the largely Democratic board. Though outnumbered, Republicans were vocal on the issue. Senate Republican leader Patricia Bates is quoted saying, "Californians got a lemon of a gas and car tax hike today." This is the largest tax increase on fuel prices in the state's history, costing motorists approximately $10 extra per month in transportation costs.

Despite the increase in price, Governor Brown claims that the tax will be beneficial for all who use the state's roadways. 

"Safe and smooth roads make California a better place to live and strengthen our economy," Brown said. "This legislation will put thousands of people to work."

Reports have stated that nearly 13,000 jobs will be added per $1 billion invested, resulting in significant employment gains statewide.

The money collected from the tax will be used to repair more than 500 bridges across California as well as busy interstates which require major repair. It's slated to raise $5.2 billion per year over the next 10 years, equaling up to the $52 billion total.

Another bill has been passed that restricts the government from spending the tax-funded dollars on anything other than transportation.