The state Board of Equalization on Tuesday approved lowering the statewide excise tax rate on gasoline by 6 cents.
The 5-0 vote means the tax will decrease from 36 cents to 30 cents per gallon effective July 1, and remain there until June 30, 2016.
Under guidelines of a complicated gas tax formula signed by then-Gov. Arnold Schwarzenegger in 2010, BOE annually adjusts the state’s gasoline excise tax rate by March 1 each year.
BOE anticipates relatively stable gas prices over the next fiscal year and in-state gas consumption has remained flat in recent years; both factors are considered by BOE when weighing excise tax adjustments.
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State leaders adopted the “fuel tax swap” formula five years ago to help bridge a budget deficit. The maneuver allowed them to use gas tax revenues for debt repayment.
Historically, the swap has had little or no effect on at-the-pump gas prices. When gas price go up, consumers pay a corresponding higher amount in sales tax. The statewide baseline sales tax on gas is 2.25 percent, and additional taxes vary by jurisdiction.
The 2.25 percent gas sales tax funds local government programs; the state excise tax funds statewide highway and mass-transit projects.
Call The Bee’s Mark Glover, (916) 321-1184.