Drivers Could Feel More Pain At Pump Than Expected Due to Gas Tax Increase

Opponents of the state’s gas tax hike say Californians are not aware of the full pain they’ll feel at the pump.

A bill approved in the state Legislature this month increases the gas tax by 12 cents per gallon starting in November.

But in 2019, that charge goes up another 7.5 cents per gallon.

Tom Scott of the California chapter of the National Federation of Independent Business said that extra charge hasn't been well publicized.

“This is what happens when you try and jam a tax increase through the state Legislature in six days. There’s not going to be a healthy analytical discussion,” Scott said.

The bill passed this month, SB 1, was designed to pay for the state’s massive backlog of road and bridge repairs. Gas tax revenue, which is used to fix state roads, has declined as cars have become more fuel efficient and some drivers have switched to electric vehicles.

It was supported by the California Chamber of Commerce as well as cities, counties and labor groups.

A spokeswoman for the Brown Administration, which supports the bill, said the gas tax would have changed in 2019 whether the recent legislation was passed or not. This price-based portion of the gas tax fluctuates based on the cost of gasoline.

Brown is expected to sign the bill into law later this year.

As of January, Pennsylvania had the highest per gallon gas tax rate in the nation at more than 58 cents, according to a map by the Tax Foundation, a nonprofit that studies taxes nationwide.

California’s per gallon tax was about 38 cents per gallon, the seventh highest in the nation. With a 12 cent per gallon increase in November, California’s tax would trail Pennsylvania’s by 8 cents per gallon.

Joe Henchman, a vice president with the Tax Foundation, told PolitiFact California earlier this month that California also adds a 2.25 percent sales tax on gasoline.

This sales tax is not counted by the foundation as part of the state’s gas tax. But based on the current price of gasoline in the state, it represents about 6 or 7 cents per gallon in tax, which "would not entirely close the gap with Pennsylvania," but would make it close, Henchman said.

Scott, of NFIB, added that the small business owners his group represents are already shouldering the burden of California’s higher water and electricity rates, along with high healthcare costs.

“Small businesses in the state of California are really getting squeezed,” he said.