California Gas Tax : Get Ready For a New Gas Tax Increase

The 1st of July is going to be a major deal in the Golden State.

Due to an upcoming hike in the excise tax rate, California’s already-exorbitant gas prices are expected to soar an additional 3 cents per gallon. Gasoline was already $6.44 per gallon, up from the national average of $5.01 a gallon on Wednesday.

California’s fiscal year begins on July 1, but the state’s spending plan has yet to be finalized to get ready for another gas tax increase. Gov. Gavin Newsom blasted lawmakers earlier this week for neglecting to include “more immediate, direct relief to aid millions more families with rising gas, grocery, and rent prices” in a $300 billion placeholder budget they handed to his desk on Wednesday.

A similar point was made by a group of Republican legislators on Wednesday, who assembled in front of a large “100” made of bright orange traffic cones outside the state Capitol. In his March State of the State address, Newsom first proposed the concept of gas tax relief, according to GOP legislators.

“We are still waiting with no respite in sight, arguing over $400 or $200 that they’ll send to you,” said Assembly Republican Leader James Gallagher of Yuba City. That’s not all, either. Now is the time to take action. Since January, we’ve been advocating for a temporary suspension of the state’s gas tax as the most expedient and effective means of reducing current gas prices for all Californians. Each of us could have saved nearly $2,400 right now if we’d done it!
It costs a gallon of gas in my area the same amount as five cans of baby formula or two weeks of feedings,” said Suzette Martinez Valladares, an Assembly Republican from Valencia. When it comes to infant formula, I’ve heard that single women are choosing to fill up only half of their tanks to ensure that they have enough money. The pain of this is palpable.”

Although the cost of living is a key concern for many voters, Republicans aren’t the only ones pushing to delay gas taxes this election year.

California Governor Gavin Newsom recommended postponing July’s tax rise and utilizing the roughly $100 billion surpluses in the state’s coffers to replace more than $1 billion in lost revenue for transportation projects earlier this year. Upon arriving, the strategy was already doomed to failure. In April, Assembly Speaker Anthony Rendon and Senate President Pro Tem Toni Atkins assured me, “We are ready to act as soon as the governor joins us in supporting a package that delivers stronger relief for California households.” Earlier this week, Rendon posted a photo of himself, Atkins, and Newsom in a room together, discussing their “shared budget efforts.” It was in his words: “I’m grateful as ever for their partnership.”
It was also suggested that the gas excise tax be suspended for one year and that the savings be passed directly on to customers. The proposal was defeated in a vote amongst their peers.

It’s been more than 20 years since the Federal Reserve increased interest rates by more than three-quarters of a percentage point. While the move is aimed at curbing rising inflation rates, it might also weaken economic growth and lead to a rise in unemployment rates. That’s not good news for California, which accounted for more than 25% of the nation’s continued unemployment claims last month.

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