California, where the cost of a gallon of gasoline is more than $1 above the national average, increased its gas tax on Thursday.
The increase is small – six-tenths of a cent – but brings the already highest-in-the-nation gas tax to 51.1 cents.
The average cost of a gallon of gas is $4.28, compared to $3.10 across the U.S., according to AAA.
The hike is part of a road repair bill the California legislature passed in 2017 that increases gas taxes and vehicle registration fees to pay for bridge and road repairs. The tax is increased based on the California Consumer Price Index.
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When the bill took effect in November 2017, it raised the state’s gas tax by 12 cents. Prices went up another 5.6 cents in 2019 and 3.2 cents in 2020.
At the same time as the tax increase, California is facing a historic $75 million budget overflow, thanks to a booming Silicon Valley, a thriving stock market and high taxes on high earners. Meanwhile, California is due to receive $26 billion in federal aid.
The surplus drove Gov. Gavin Newsom, who is fighting against a recall election, to propose sending cash payments to middle-class residents.
Republican lawmakers last week called for a suspension of the excise tax on gas, noting the budget surplus.
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“Rather than allowing Governor Newsom to run around the state handing out millions of dollars in free lottery tickets and other chum, we should instead use the budget surplus to reduce the obscene excise tax on gasoline purchases,” state Sen. Brian Jones, R-Santee, said.
The California Republican party too decried Thursday’s hike.
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“California already has the highest gas prices and highest gas tax in the nation, but Gavin Newsom and Sacramento Democrats didn’t think that was high enough,” California GOP Chairwoman Jessica Millan Patterson said in a statement. “Despite a budget surplus, Democrats ignored the calls for a Gas Tax Holiday, instead taking more from hard-working Californians who are simply trying to make their daily commute. Newsom’s California is oppressively unaffordable due to Democrat policies. We deserve a true leader who doesn’t think the answer to good governing is more taxes.”
