SACRAMENTO, Calif — Another hike for California’s gas tax is already scheduled, but given the exceptional times amid the coronavirus pandemic, its timing might be less than ideal.
California’s gas tax was the highest in the country in 2019, according to Tax Foundation. A special feature of SB1 lets the tax keep pace with inflation, meaning it adjusts every year with the Consumer Price Index.
By July 1, it’ll be increasing another 3.2 cents — bumping the state excise tax to 50.5 cents. Some lawmakers oppose the pending increase, some lawmakers support it, and others believe the increase has poor timing.
“I don’t oppose it,” said Assemblyman Jim Cooper (D-Elk Grove). “I’m just not happy with it… It’s a hard pill to swallow.”
Lawmakers found themselves with the coronavirus pandemic impacting millions of Californians with unemployment and devastating city and state revenues. As the economy recovers, the automatic increase for the gas tax is coming at a rough time for many.
“That’s a big concern, because right now, people are still struggling,” Cooper said. “They’ve got to pay rent or their mortgage. They’ve got to put food on the table… and they’ve got to drive their car.”
In May, UC Davis’ Road Ecology Center released a study detailing some of the impacts that the coronavirus and mitigation efforts had on traffic and fuel use. The study said SB1 revenues dropped by about $46 million per week, or about $370 million for an eight-week reduction in travel.
Government revenues weren't the only incomes impacted, either. In the last 14 weeks, California recorded roughly 5.5 million unemployment applications.
“As Californians are struggling to make ends meet, we should give [them] as much relief as possible and not an increase [in gas tax],” said Asm. Vince Fong (R-Bakersfield).
Fong believes the coronavirus’ economic impact and unemployment are reason enough to give Californians a measure of relief from the scheduled increase.
“My view right now is, as the economy recovers, we should freeze all taxes and fees that are slated to go into effect, just to give Californians some relief,” said Fong.
There’s some frustration with the gas tax, in particular, for Fong. While he said roads need investment, he also said the money has to be used appropriately.
“The fact of the matter is the gas tax is in place and it’s an important part of how we fund roads, but should it go up now? I don’t think so. I think we can delay the gas tax increase temporarily,” Fong said.
According to the LA Times, Democrats who control the state Senate and Assembly said they have no plans to take action on delaying or canceling the gas tax increase with a vote.
“There are no off-ramps to the gas tax,” Cooper said. “Obviously, to me, COVID-19 would be a perfect off-ramp to delay that gas tax, but it’s going to be applied and that’s unfortunate for the consumer.”
Asm. Phil Ting (D-San Francisco), who was supportive of the tax increase, noted that it keeps momentum going as California addresses its crumbling infrastructure.
"The annual CPI adjustment allows us to continue the progress we’re making to fix our crumbling roads and bridges," said Asm. Ting, Chair of the Assembly Budget Committee. "A good transportation system not only creates jobs and helps our economic recovery today, but also encourages growth in future years."
He said the work on California's roads didn't stop due to the pandemic, noting that in some areas it actually accelerated while traffic was minimal.
While some progress is being made, Fong argues that California could invest in roads by using the existing funds responsibly, without raising taxes and fees.
FOR NEWS IN YOUR COMMUNITY, DOWNLOAD OUR APP:
►Stay In the Know! Sign up now for the Daily Blend Newsletter