Possible gas tax hike this summer: Board of Equalization to consider a 3.5 cent hike on excise tax
Last Updated: 288 days ago
SAN DIEGO - After a record one-month jump in gas prices, the state is set to consider a tax increase that will impact what drivers pay at the pump in gas taxes.
When it comes to fueling at the pump, Selena Zheng likes to shop around.
"It's a little hard and really demanding trying to pick out gas stations like, what's cheaper, what is not," she said.
While drivers can look at the gas prices on signs by the road, what they cannot see is the amount they will pay in taxes. That adds up to about 70 cents per gallon.
"It really adds up," said Zheng. "Taxes on sales, taxes on clothes, taxes on gas now, you know, so it's a little tough."
It may be about to get a little tougher. On Tuesday, the State Board of Equalization will consider a 3.5 cent increase on what is called the excise tax. It generates funds to maintain roads, bridges and infrastructure.
If the rate is hiked, California will lead the nation in having the highest gas taxes.
Californians, specifically San Diegans, have done a great job in buying more fuel-efficient cars, but when it comes to an excise tax, that is not necessarily good news.
"The excise gas is based solely on gallons," said Steve Gill, PhD., a professor of accounting at San Diego State University.
The state's finance department tries to forecast how many gallons of fuel will be sold each year. Because Californians are making fewer stops at the pump, the state is losing money. There was a $157 million shortfall in gas tax revenue last year.
"We really lose the benefit, if you will, of being a volume-based tax trough and excise tax by having to do the look back," said Gill.
Zheng said, "Every day, every week, you just have to decide, oh, should I spend more on groceries or should I spend more on gas?"
If passed, average drivers will be shelling out an extra $26 at the pumps this year.
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