Assemblyman Vince Fong (R-Bakersfield) brought back Assembly Bill proposals earlier this month to temporarily suspend the California state gas taxes for an entire year.
Assembly Bill 53 and Assembly Bill X1-2, both authored by Fong, would not only suspend the gas tax for a year, but they would require gas stations to carry over all tax savings directly to the consumer as well as put what the gas tax savings was compared to if the tax had been applied to on the receipt. According to the bills, all projects that the gas tax currently funds, such as bridge and street repair, transportation infrastructure maintenance, and other transportation needs, would subsequently be paid for by the state’s general fund until the end of the gas tax break.
A moratorium on the gas tax has been attempted several times since SB 1 was passed in 2017. The most recent attempt was earlier this year when AB 1638, A bill by then-Assemblyman Kevin Kiley, failed to pass because of Democratic lawmaker hijinks and objections. If it had been passed the bill would have mitigated skyrocketing gas prices by reducing gas by 51 cents per gallon for a total of six months. While lawmakers refused to pass the tax relief, gas spiraled upwards well above a $6 per gallon average. Other states successfully removed their gas taxes temporarily.
This year, instead of a gas tax drop, Newsom has put out a price-gouging penalty on oil companies to stop steep price increases. Many have pointed out that this would essentially create a new tax on oil and gas companies in everything but name.
However, this time around for Republicans, Fong said that the new bills, while saving Californians money at the pump, would also give Californians more money overall to spend at a time of economic uncertainty and high inflation.
Gas tax suspension bill
“These bills will provide immediate relief by lowering prices at the pump for all Californians,” said Assemblyman Fong last week. “The Governor continues to demonize the hard working people that power California and proposes to increase energy cost even more with his ill-conceived price control proposal. The contrast could not be clearer. These measures to temporarily suspend the state’s gas tax will bring more money back in the hands of California drivers. In addition to suspending the gas tax, the long term solution to the energy crisis the Governor created is to give families more reliable, affordable and dependable energy supply.”
“There has been study after study after study examining why gas prices are higher here in California than the rest of the United States – because of taxes, fees, and mandates. It’s the policies that the Newsom administration has put in place. And so if they’re serious about reducing the price of gasoline, then they need to look in the mirror. We want contrasting policies. Let’s have a debate. There are two contrasting directions Our proposal brings immediate relief to Californians. Let’s temporarily suspend the gas tax and give Californians immediate relief. The Governor’s proposal or energy tax or however he wants to describe it, would stifle the energy supply, increase costs and could potentially lead to energy shortages. I think the choice is pretty clear.”
“The Governor is very good at creating splashy headlines. He is currently trying to deflect Californians away from the direct consequences of the energy crisis that his policies have created.”
Energy experts noted that Fong’s proposal would be better than Newsom’s in gas price reduction, but would also come with a few negative side effects.
“Overall, reducing the gas tax would help Californians out miles more than Newsom’s plan to put penalties on oil companies,” explained Matt Jeffries, an energy sector advisor, to the Globe on Monday. “That’s way better savings. Over half a dollar off a gallon of gas goes a long way. You fill up a few times a week, and it adds up quickly. Newsom’s plan is a lot more convoluted. But, also, do you really think he wouldn’t veto the bill if it made it to him in order to protect his plan?”
“However, removing the gas tax also means putting a bigger burden on the general fund and budget. And remember, we are seeing shortfalls and have to plan for cuts next year, so this would add a bit of a burden to that. And we just had a huge state refund go out that cost billions. Then again, there is no such thing as a perfect way to solve this.”
Both bills are expected to begin their process of going through the legislature beginning next month.
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