California to raise its gas tax, already the highest in the nation
California lawmakers appear unlikely to pause the annual summer increase in the state's gasoline tax ahead of a May 1 deadline, Gov. Gavin Newsom’s office said on Monday.
Newsom, a Democrat, had previously expressed support for helping California motorists experiencing pain at the pump by waiting to implement a 5.6% tax hike scheduled to take effect on July 1. The tax is used to fund roads and other infrastructure projects; the state's Legislative Analyst's Office projected the tax will generate about $8.8 billion in revenue during the 2021-22 fiscal year.
But lawmakers will almost certainly fail to stop the gas tax increase from taking place because they would need to pass legislation by Sunday in order to do so – and have yet to introduce a bill on the matter.
"It is clear now that the Legislature will not act in time to provide that immediate, limited relief, but we look forward to working with lawmakers on the Governor’s proposal for direct payments to Californians wrestling with rising prices," Newsom’s spokesperson Alex Stack said in a statement.
Prices for a regular gallon of gas hit $4.13 on Wednesday, according to AAA, up from $2.88 one year ago. But California – as is usually the case – has seen the steepest prices in the country, with a gallon of gas reaching $5.68. In some parts of the state, prices are even higher: Mono County has recorded an average price of $6.61 per gallon.
California already has the nation's highest gas tax at 51 cents per gallon. The levy will rise to 53.9 cents per gallon at the beginning of July. Still, an analysis from LAO found it would only save drivers about 3 cents per gallon.
Newsom's office has also floated the possibility of a rebate that could go toward residents with cars registered in California.
California state Republicans introduced a bill in January that would immediately suspend the gas tax in response to the surging prices and backfill the projects from the state's $45 billion surplus, but the proposal failed to secure enough votes in March.
The sky-high gas prices have roots in the faster-than-expected economic recovery from the pandemic, which has triggered the hottest inflation in decades amid strong consumer demand, an influx of government stimulus and disruptions in the global supply chain.
But in recent weeks, the war between Ukraine and Russia has sent global prices even higher as it impedes the world's access to energy supplies. Although oil prices dipped below $100 per barrel on Monday amid talks between the two nations, gas prices remained high.