The record gasoline prices that hammered motorists a year ago haven’t returned, but it’s going to cost you a little more to fuel up starting this weekend when the state’s gas tax goes up.
California’s gas tax — already one of the country’s highest — will climb 8% July 1, or about 4 cents a gallon or 56 cents per 14-gallon fill-up. The increase will bump the total gas tax on a gallon of petrol to 57.9 cents.
In a state with the country’s second-highest gasoline prices, averaging $4.80 on GasBuddy and $4.83 at AAA, that’s going to pinch a bit more.
But it’s not expected to change driving habits much heading into the weekend before the Independence Day holiday. Patrick De Haan, head of petroleum analysis at GasBuddy, said that, for the most part, motorists will just “grumble and take it.”
The fuel-savings platform says gas prices nationally are averaging $1 less than a year ago in California and most other states, offsetting the impact of a tax increase. De Haan said inflation and economic uncertainty have tempered fuel demand and kept pump prices in check so far this year. More than a third of surveyed drivers are planning road trips this weekend, up 9% over a year ago, he said.
AAA Northern California is projecting a record 5.6 million Californians will travel for the Independence Day holiday, mostly by automobile.
“What we’ve found historically last year and this year is that the price of gasoline hasn’t impacted people’s decisions to make planned trips,” said AAA Northern California spokesman John Treanor.
News of another gas tax hike drew a sigh from Lee Dargis as she pulled her gray hybrid up to a pump at the Quik Stop in the Santa Cruz County town of Felton, where a gallon of regular gas cost $4.79.
“It seems unavoidable,” Dargis said. “I’ve gone almost numb with what’s going on with prices here in California, for housing, taxes. It just seems unstoppable. But I can also appreciate that there’s lots of roadwork going on. That makes me feel a little bit better about it.”
Juana Garcia in Martinez, who is heading to Lake Berryessa this weekend for the 4th of July, said she’s already struggling to pay the $100 a week she spends now on gas, as she fueled up her car that the bill was almost $80.
“It’s high,” Garcia said, adding her husband, a construction worker, bought an electric vehicle for work to avoid gas costs.
The gas tax increase comes courtesy of SB 1, the 2017 state law that increases California’s gasoline tax every year to raise more than $52 billion for transportation improvements and maintenance over 10 years. California voters in 2018 rejected a ballot measure that would have repealed it.
But that hasn’t ended the controversy over the state’s gasoline tax.
Last year, when California gas prices soared well over $6 a gallon, Republicans and even Gov. Gavin Newsom, a Democrat who backed SB 1, suggested suspending the 3-cent gas tax increase that took effect a year ago.
But Democrats in the legislature balked, arguing the revenue was needed for roadwork. With the state at the time enjoying a record budget surplus, Newsom settled on sending “Middle Class Tax Refunds” ranging from $200 to $1,050 to 23 million taxpayers earning no more than $250,000, or $500,000 for joint filers.
California’s just-approved budget closes a projected $31.5 billion shortfall. Republicans asked Newsom and Democratic lawmakers again this year to suspend the new gas tax increase, and Assemblywoman Laurie Davies, a Laguna Niguel Republican, offered a bill amendment Tuesday to do that.
“Stopping the gas tax increase would be a simple way to make travel more affordable as many continue to struggle to get by,” Davies said on the Assembly floor, arguing the tax will cost Californians a combined $600 million and citing a new poll that found four in 10 Californians are considering leaving the state, most citing high costs. “As California becomes less and less affordable, people are leaving our state.”
But Assembly Democrats tabled the proposal without comment.
California has long been known for high gas prices, driven largely by state levies and laws requiring a special fuel blend to reduce smog. But the Golden State has competition. The state of Washington topped California in average gas prices this month, according to both GasBuddy and AAA, with prices averaging $4.95 to $4.99.
But California’s $4.80-$4.83 average for a gallon of gas is still well above the national average of $3.53-$3.56.
Last year, with the state’s gas prices hitting records, Newsom pointed his finger at oil and gas companies, accusing them of price gouging and threatening a windfall profit tax. But fellow Democrats, fearing it would lead to even higher gas prices, wouldn’t go along.
Instead, Newsom and fellow Democrats agreed on a law that took effect this week to create a new state Division of Petroleum Market Oversight to monitor the state’s oil industry for market manipulation. Whether that yields any relief at the pump remains to be seen as past state investigations on gas prices haven’t uncovered industry malfeasance.
But while the governor “demonizes oil and gas industry over high prices,” De Haan said, “the state is taking its fair share as well.”
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