California Tax Board Lowers Gas Tax 2.2 Cents Per Gallon

The state's tax board voted 3-2 to lower the tax to 27.8 cents per gallon for the fiscal year that ends June 30, 2017.

SACRAMENTO - California's tax board voted Tuesday to lower the state excise tax on gasoline by 2.2 cents per gallon as of July 1.

Drivers in California overpaid their gas taxes last year under a complicated formula that was used to help bridge a state budget deficit in 2010, Board of Equalization Vice Chairman George Runner said. So the board voted 3-2 to lower the tax to 27.8 cents per gallon for the fiscal year that ends June 30, 2017.

That move would reduce the amount of money going to roads and mass transit programs by about $328 million next year.

The board calculates the tax rate to bring in the same amount of money the old sales tax would have collected. Drivers may not see a difference at the pump because of that and other factors affecting gas prices.

The board pre-emptively reduced the gas tax by 6 cents last year to avoid over-collecting because of lower gas prices, but it still took too much. The adjustments are supposed to ensure that over a three-year period, motorists pay the same amount in state taxes at the pump as they would have paid under the old tax.

"Lowering the rate is the right thing to do, and I'm sure Californians will welcome this reduction,'' Runner said in a statement announcing the decision after the board met in Culver City.

California Department of Transportation Director Malcolm Dougherty said in a statement that the consecutive decreases will reduce transportation funding by three-quarters of a billion dollars over the next five years and may delay projects.

"Although Caltrans will continue to prioritize safety projects, today's action emphasizes the need for the comprehensive transportation funding package that the governor continues to call for,'' he said. State lawmakers have so far been unable to reach agreement on a funding plan.

Board member Fiona Ma, who also voted for the cut, urged Gov. Jerry Brown and lawmakers to find another way to pay for transportation projects.

Drivers pay an additional 18.4 cents a gallon to the federal government and a 2.25 percent sales tax that benefits local governments. Some local governments also add their own taxes.

Copyright AP - Associated Press
Contact Us