SACRAMENTO (KNX) — Gov. Gavin Newsom's new budget proposal seeks to take a break from the state's annual gas tax increase, which was first implemented by Senate Bill 1 in 2017 to raise money for transportation projects and much-needed state roadwork.
“I don’t want to overstate this but its a modest $523 million gas tax holiday of sorts," Newsom said Monday in his presentation of the California Blueprint.
“We're gonna backfill it in terms of the decks itself to transportation projects so there’s no direct impact to investments," he said. "It will be a direct impact by avoiding that inflation adjustment that comes in July of next year to increase the gas tax."
Since the implementation of SB-1, the state gas tax has gradually risen each year and remains the highest in the United States — at more than 66 cents per gallon, according to Tax Foundation. The lowest gas tax rates are in Alaska (14.98 cents per gallon) and Missouri (14.42 cents per gallon).
The "gas tax holiday" proposal comes as AAA reports some of the highest gas prices ever seen, with California leading the pack.
"The average price for self-serve regular gasoline in California is $4.66, which is unchanged for two weeks," the auto club reported Thursday, adding that the national average is $3.30.
Locally, AAA reported the average price for a gallon of gasoline is $4.68 in the Los Angeles-Long Beach area, about $1.44 higher than last year.
"Southern California drivers started the new year paying the highest average price ever in the region for January," AAA Spokesman Jeffrey Spring said in a statement.
"Oil prices are climbing again due to civil unrest in a couple of oil producing countries, but that impact seems to be tempered by concerns about what the Omicron variant of COVID may do to gasoline demand."
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