A push by GOP California lawmakers to suspend the state gas tax for six months received a renewed push this week following the state gas average climbing to over $5 a gallon.
While a reduced number of gasoline production facilities, a climbing number of Californians returning to the road following the pandemic, the Russian-Ukrainian war and other local, state, national, and international factors have kept gas high priced in California, Californians have long had to pay more than other Americans due to gas taxes. $1.27 of every gallon along has to go to taxes and other mandates, the largest chunk being the state gas tax that is currently at $.51 a gallon.
Passed as SB 1 in 2017, the gas tax quickly created a large fund for bridge and street repair, transportation infrastructure maintenance, as well as other transportation needs. Despite being passed at a time that had a lull in national gas price increases, the bill proved so controversial that one Senator, Josh Newman (D-Fullerton), was actually recalled over his vote supporting SB 1.
However, with a renewed price increase in recent months, and high-priced summer months still ahead that will cause gas to get even more expensive, many lawmakers have looked at ways at halting or slowing the climb. Governor Gavin Newsom proposed in January a ‘gas tax holiday’ to halt the scheduled inflation increase of the tax in July due to the increasing prices. While supported by many Democrats and Republicans alike, the price bumps in February and March led GOP and some Democrat lawmakers to support a bill that goes even farther. Specifically, they are behind AB 1638, a bill authored by Assemblyman Kevin Kiley (R-Rocklin) that would suspend the gas tax for six months and utilize budget surplus funds to pay for the transportation infrastructure projects usually covered by the gas tax.
On Wednesday, many Orange County Republican lawmakers met in Yorba Park to rally public support for the bill as well as to set the support for lower gas taxes as a hurdle for Democrats to jump in the ultra-competitive Orange County local and state races coming this November.
“Hardworking families are having to cut back from other expenses just to fill up their gas tanks,” explained Senator Patricia Bates (R-Laguna Niguel). “California residents deserve some financial relief. A suspension of the gas tax will go a long way. For the last two weeks, California broke the record for the highest gas prices ever, ever, listen to that, ever recorded.”
Assembly Republican Leader James Gallagher (R-Yuba City) reiterated GOP support on Friday in several statements, pushing for a six month halt on the gas tax yet and challenging Democrats in the Assembly and Senate who are not for the tax removal.
“We have now upwards what could be a $60 billion surplus in California,” said Gallagher. “The government has already taxed us too much. How about we just give a suspension of the gas tax for the next six months? That would save everybody 50 cents a gallon and give them a much-needed break from these high costs.
“This is a crisis of Democrats’ own making – from their war on domestic energy production to the taxes and mandates that add $1.27/gallon to the cost of gas, their actions mean Californians are paying far more than they should. If Democrats really care about bringing down the cost of living for working Californians, they will join our effort to suspend the gas tax and bring costs down by fifty cents a gallon overnight.”
Some Democratic lawmakers have indicated support for the gas tax removal, many of whom are currently locked in for close elections later this year.
“I’m also tired of the sky high cost of living in California,” noted Senator Dave Min (D-Irvine). “Any legislation that helps ease the burden on taxpayers should be on the table and will have my full consideration. During a year of record budget surpluses, the state should be returning tax dollars back to Californians.”
Democratic leaders, however, have expressed concern on losing $500 million or more of gas tax revenue and what it would mean for infrastructure projects. Instead of the tax removal, many are proposing to help with increased costs in other places, such as expanding healthcare options for Californians in the state
“If we’re gonna halt the gas tax, we just want to make sure that we have a sense of what that means to our state into our economy,” said Assembly Speaker Anthony Rendon (D-Lakewood).
Many budget experts noted on Friday that the Republican proposal could work if state budget surplus funds were utilized.
“California has a large budgetary surplus. We’re talking billions and billions,” added Renee Brewster, a financial and budgetary advisor who helps cities and municipalities figure out what to do when faced with surpluses, to the Globe on Friday. “That’s the people’s money. And by lowering the gas tax, you have a relief not only for all Californian drivers and associated families, but relief for the people who drive food and other goods, energy costs relief, and other areas. Basically in affects everyone, and that’s the proper way to look for where to spend a surplus.
“But first they need to succeed with removing the tax.”
Discussion on AB 1638 in the Assembly is expected soon.