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Today, members of the Senate Republican Caucus delivered a letter to State Budget Leaders requesting a ‘Gas Tax Holiday’ which would include a full suspension on state gas tax collection for the 2021-2022 Fiscal Year, backfilled by the State’s general fund. This would provide Californians with much needed financial relief while ensuring that transportation infrastructure projects are not impacted.
Below are excerpts from the letter. Click here to read the full letter.
“Californians are currently enduring the highest gas prices in the nation, averaging $4.22 for a regular gallon of gasoline, over $1.15 above the national average, according to AARP. While this legislature is currently deliberating whether to expand the Golden State Stimulus payments to more Californians, it is important to understand that any action intended to provide financial relief to Californians is undermined by the accompanying rise in gasoline excise taxes. The adverse impacts of high gas prices and taxes that we know disproportionately impacts our low to middle-income residents not only affects drivers, it increases the cost of living, including business costs and food prices, hampering our relief efforts and economic recovery.
“On July 1, California’s excise tax on a gallon of gasoline will rise to 51.1 cents. At a time when the state budget is enjoying historic surpluses, Californians’ deserve a tax break, not higher taxes. The average family of four pays as much as $800 in gas taxes a year and this increase is going to cost California drivers an additional $83 million in the next year alone. Gas costs account for 14% of expenditures in the agricultural sector, and raising the gas tax would inherently raise the price of food, further resulting in not just a higher tax at the pump, but also increased costs at the checkout line.
“A gas tax holiday, more specifically, a full moratorium on California’s gasoline excise tax collection, backfilled with general fund dollars for the 2021-2022 Fiscal Year, would provide much needed relief for Californians….”