Assembly Progressives’ Solution to Astronomical Gas Prices? Increase Taxes on Gas

Assembly Progressives’ Solution to Astronomical Gas Prices? Increase Taxes on Gas

Only in California will you witness Assembly progressives hijacking a bill that suspends a tax to gut-and-amend it with language that enacts a new tax.

Assemblymember Kevin Kiley (R-Rocklin) introduced Assembly Bill 1638 at the beginning of this year in response to the considerable jump in gas prices following the Russian invasion of Ukraine. Factors such as 1) the post-pandemic demand for gas as more and more cars are on the roads, 2) cuts in the oil production from oil-producing nations during the pandemic and a slow start to ramping up production, and 3) the U.S. sanctions on Russian oil and gas imports have all contributed to the current average state gas price of $5.91, with that number changing every day according to AAA.

Between the end of February and March 14, gas prices increased about 20% in California and over 21% in the US. In a state that is dealing with homeless, housing and affordability crises, already financially struggling families and businesses cannot handle the increasing prices of gas.

The price of gas has been heavily debated long before the pandemic and the war between Russia and Ukraine. The recent events happening worldwide have only exacerbated a hot issue that many legislators have been fighting over for years.

California has the highest gas tax rate in the nation, adding an extra 66.98 cents per gallon to a California driver’s bill. These rates may include: excise taxes, environmental fees, storage tank taxes, other fees or taxes and general sales taxes.

According to the Public Policy Institute of California, “The bottom quintile of families by income level spends 16% of their income on gas and fuel compared to 8% for the second-lowest income group or 2% for the highest-income group.”

Gas taxes don’t discriminate based on an individual’s income. People living in poverty are paying the same taxes on gas as those who are financially well-off. Yet, California’s leaders, who are supposedly looking after the interest of the poor and middle-class , continue to support a tax that adversely affects poor and middle-class Californians.

When given the opportunity – twice – to consider Assemblymember Kiley’s bill to suspend California’s excise gas tax for six months, Assemblymember Alex Lee (D-San Jose) instead chose to gut the bill’s contents in the Transportation Committee hearing Wednesday and insert an entirely new measure to increase taxes on gas suppliers.

“Only Assembly Democrats would think you can bring down gas prices by increasing the gas tax,” said GOP Assembly Leader James Gallagher of Yuba City. “Today’s stunt in the Transportation Committee shows just how far Democrats will go to delay and avoid giving Californians any relief from high gas prices.”

As of the end of 2021, California had a $31 billion state surplus. With a surplus that large, it’s confusing why legislative leaders are in immense opposition to a six month tax suspension. Their fellow Assembly Democrats have offered solutions such as sending every California car owner a $400 per vehicle (up to two vehicles per household) tax rebate while continuing to tax drivers at the pump. However, a rebate could take months to get into the hands of drivers while a gas tax suspension provides immediate relief.

It is doubtful that California’s majority-Democrat Legislature would support a GOP proposal to cut taxes any time soon, but last week’s political theater means Californians seeking financial relief now will not be getting it any time soon.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.