Finance News

After Tax Hike, Gas In California Is Now A Dollar Higher Than The National Average

California’s already-high gas prices jumped up again on July 1, with a new 5.6 cents per gallon gasoline tax hike.

The increase brings the average price per gallon in California for regular gasoline to a national high of $3.755 per gallon, according to the American Automobile Association, more than a dollar a gallon more than the national average of $2.717 per gallon.

The hike takes California’s total statewide gas tax up to 47.3 cents per gallon, according to the state’s Department of Tax and Fee administration.

With the new tax in place, it will cost approximately 78 cents more to fill an average 14-gallon gas tank, according to Marie Montgomery Nordhues, a spokeswoman for the Auto Club of Southern California.

Although it comes just before the July 4 holiday, the tax increase is unlikely to suppress Independence Day travel because most people have already finalized their plans, Nordhues said. AAA is projecting a 4.1% increase in holiday car travel in California from to last year.

The increase came as part of a 2017 law, which aimed to raise $5.2 billion annually for road and bridge repairs and expanded mass transit, according to The Los Angeles Times.

Republicans in the state Assembly attempted to delay the July 1 increase two weeks before it took effect, but Democrats blocked the measure, according to The Associated Press.

“With this increase, California will once again have the highest gas taxes in the nation. You’d hope that would at least pay for quality roads, but no, ours are some of the worst in the country,” Assembly minority leader Marie Waldron said in a statement. “It’s sad that instead of using existing funding efficiently, Democrats, on a party-line vote, supported yet another regressive tax increase on California drivers.”

Under the 2017 law, the tax will automatically increase annually based on a Consumer Price Index adjustment, beginning July 1, 2020.

But officials say these tax increases may not be sufficient to fill the state’s infrastructure needs, the Times reported.

California Gov. Gavin Newsom has expressed concern about the state’s high gas prices. Gas in California is more than 10 cents a gallon more expensive than in the next-highest state, Hawaii, according to AAA.

In April, Newsom called for the state’s energy commission to investigate gas prices and blamed “inappropriate industry practices” for the price disparity, the Times said.

The commission said in a May memo that “market manipulation” could potentially explain high gasoline prices in California, and that it would continue to investigate the source of the disparity.

Gasoline prices nationwide were surging in early 2019, but fell in May and June before rising July 1, according to price-tracking firm GasBuddy.

Story cited here.