SAN DIEGO -- California could be in for a rare treat, a tax break.
The state Board of Equalization is proposing to lower the per-gallon tax drivers pay at the pump by seven percent in July; from 30 cents a gallon to 27.8.
A driver who travels 15,000 miles a year, at 20 miles per gallon, would save $16.50 during the year.
University of San Diego economist Alan Gin said every penny saved on gasoline means consumers as a whole have an extra $1 million to spend each month.
“Instead of spending that money on gas, they’d be buying other products and eating out more,” he said.
Californians still pay some of the highest gas taxes in the nation, through a combined state and local sales taxes and a federal per-gallon tax. Drivers in the Golden State pay an average 60 cents in taxes on a gallon of gas. The national average is about 48 cents, according to the American Petroleum Institute.
The Board of Equalization sets the tax rate each year using on a complex formula based on consumption, prices, and predictions. From July 2014 to July 2015, it dropped from 39.5 cents to 36 cents a gallon.
San Diegans are already enjoying lower gas prices. The average price for a gallon of gas is now $2.53, down from $3.01 a month ago. A year ago, the average price for a gallon of gas was $2.71.
The new rate would take effect July 1, the start of the state’s fiscal year. The Board of Equalization will consider the new rate at its Feb. 23 meeting in Culver City.