As California gas prices plummet, so must the California gas tax.
Because of a strange bit of budget finagling in 2010 to pay off billions of dollars in transportation-related bonds without touching the struggling general fund, then-Gov. Arnold Schwarzenegger and lawmakers swapped the state’s sales tax on transportation fuel for an equivalent “gallonage tax.” As a result, the State Board of Equalization must annually adjust a per-gallon fee charged at the pump so that it rakes in what the sales tax otherwise would have.
Confused? It’s odd. But what it means this year – as the average price of gasoline drops under $2 per gallon in many parts of the state – is that the tax will be lowered by 2.2 cents, to 27.8 cents per gallon. The board will vote on the adjustment during its meeting today, which starts at 9:30 a.m. in Culver City.
Californians consumed 14.921 billion gallons of gasoline last year, according to the board, which means each 1-cent adjustment to the tax is worth about $149.2 million. So the state is looking at approximately $328.3 million less for public roads and mass transit next year.
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