California Enacts a New Gas Tax

California has instituted a new gas tax that is expected to yield $52 billion in additional revenues over the next ten years. Your text to link…

 

These new gas taxes are expected to go into effect beginning in November 2017. In addition to the additional tax on gas individuals that own electric vehicles will pay an additional $100 per vehicle per year. There will also be increases in the registration fees that individuals pay when they purchase new vehicles or renew their registration beginning in January 2018.

 

The state is planning on using these funds to improve the roads and remove potholes, repair bridges and tunnels, and make roads a significantly safer place. The bill itself seems to split the usage of the revenue evenly between state highways and smaller local roads and will provide for shorter commute times and more efficient transportation which the Governor of California Jerry Brown indicates will help to improve the economy of the state.

 

Individual projects will be approved by the California Transportation Commission with projects starting midway through 2018. Many cities will have projects preapproved and will be shovel ready. These projects will contribute to the strength of the construction industry and many local competitors will realize a boon from the added government funding.

 

These new taxes will equate to twelve cents per gallon and will increase a few years later to close to twenty centers per gallon. Diesel taxes will also increase by twenty centers per gallon and have a sales tax of four percent added on them. Registration taxes for new vehicles will be as high as close to $200 per vehicle, but will fluctuate depending on the value of the car.

 

California has indicated that they have a massive backlog in projects for road maintenance that is over $140 billion for local and public roads. Some of the projects to be paid for include extending a commuter train between Central and Silicon Valleys and creating parkways to connect the University of California with other roads. These projects were supported in an apparent attempt to win support for the bill for local projects.

 

In the legislature the plan was supported by Democrats but only one Republican voted for the bill (Senator Anthony Cannella) and the tax will likely be a point of contest for years to come.