California passes gas tax hike
March 1, 2013
The California excise tax on gasoline will increase 3.5 cents on July 1 to 39.5 cents per gallon. [SF Gate]
On Thursday, the California Board of Equalization voted 3-2 in favor of the tax hike, which will add about 52 cents to every 15-gallon fill up.
The 3.5 cent increase is by far the largest since legislature rearranged the state gas tax system in 2010. That year the legislature lowered the sales tax on gasoline from 8.25 to 2.25 percent and raised the excise tax 18 cents per gallon to 35.3 cents. The legislation also required the equalization board to adjust the excise tax every year to achieve revenue neutrality.
Since the state determines the sales tax based on a percentage, not a per-gallon amount, revenues swing based on gas price and consumption projections. The California Department of Finance projected the need for a 3.5 cent excise gas tax hike.
From 2010 to the present, the excise tax only increased .7 cents.
Equalization board member George Runner, who vote against the 3.5 cent hike, said the finance department forecast was inaccurate and that the state only needed to raise the excise tax one penny.
“Obviously, it’s the wrong time to put additional taxes on Californians when they are already paying record gas prices,” Runner said.
Gas prices in San Luis Obispo County, which are some of the highest in the state, jumped considerably in the past month to more than $4.20 a gallon.