California Gas Tax Pause

Jan. 11, 2022 – California’s automatic gas tax hike may not kick in this summer under Gov. Gavin Newsom’s new budget proposal, which seeks to halt the increase. “It’s a $523 million dollar gas tax holiday of sorts,” is how Newsom described the plan. The Golden State’s excise tax has been rising incrementally since 2017 due to Senate Bill 1, which aims to raise money to fund transportation projects such as road and bridge repairs.  “We’re going to backfill it in terms of the tax itself to transportation projects so that there’s no direct impact to investments,” Newsom explained at a news conference. “But there will be a direct impact by avoiding that inflation adjustment that comes in July … to increase the gas tax.” At a current cost of approximately 51 cents per gal., the state’s excise tax is already the highest in the country. California continues to have the most expensive gas on average in the country as well.