New Gas Tax Increase Has California Drivers Spending Even More at the Pump Than Before
California is one of several states which will see hefty hikes in fuel taxes as of July 1 thanks to recently passed legislation.
On Monday, the wallets of millions of California drivers will become a little bit lighter as the state with one of the highest gas taxes in the nation increased the governmental grab at the pump.
California's freedom fuel tax rose 5.6 cents as of Monday, bringing the total tax to a staggering 47.3 cents per gallon. The 7.5 percent change represents a planned increase stemming from a 2017 bill signed by then-Governor Jerry Brown and took effect on Monday—the start of the state's new fiscal year. The tax's purpose is to provide additional income to both state and local government agencies in order to help rebuild crumbling infrastructure and increase funding for public transportation.
But for many, this year's gas tax hike is just the beginning of a price squeeze which lawmakers and consumer advocacy groups say will make the state even less affordable to inhabit. California's State Board of Equalization anticipates that the gas tax will continue to increase annually in order to keep up with the California Consumer Price Index.
"I had an issue with the tax increase when it went into effect because I felt that it should be paid for by the oil refineries excessive profits," Consumer Watchdog President Jaime Court told local news outlet ABC7. "The state of California is investigating now the high cost of gas in this state...I know what it is because I look at the oil refineries profit reports. It's gouging. When the oil refineries are making more off California gasoline than they make anywhere in the rest of the nation, we know that that profit is gouging."
Californians have long since found themselves paying well above the national average price for gasoline. According to AAA, drivers in California will find themselves paying $3.76 per gallon of gasoline today, despite the national average being less than $2.72 and California not having the highest gas tax in the nation—yet.
That particular honor goes to Pennsylvania with 57.6 cents per gallon, followed by Washington at 49.4 cents. Though if the state's gas prices continue to rise, consumers may find themselves paying the highest gas tax in the country in just a matter of years. Perhaps California's high gas prices have been partly responsible for the state's leading posture of electric vehicle adoption in the United States.
Additionally, a handful of other states recently found themselves at the receiving end of a substantial gas tax hike. Illinois doubled its taxes from 19 cents to 38 cents per gallon, and Ohio increased its gas tax a more modest (but painful) 10.5 cents per gallon.