California Considers Tripling Diesel Sales Tax
- Fuel Tax News
- Sep 1, 2015 | Gail Cole
Like most other states, California needs more money for its transportation infrastructure and health care. In response to this need, Governor Edmund G. Brown Jr. in June called for two special sessions to address the issues.
According to the governor’s press release announcing the special session, “Fixing California Roads, Highways and Other Infrastructure,” the state’s Transportation Department, Caltrans, “maintains 50,000 lane-miles of highway and nearly 13,000 state-owned bridges” and that current funding measures are inadequate. “The state’s current fuel excise tax is sufficient to fund only $2.3 billion of work—leaving $5.7 billion in unfunded repairs each year.”
Permanent and sustainable funding
Gov. Brown has called on state lawmakers to “enact permanent and sustainable funding to maintain and repair the state’s transportation and critical infrastructure, improve the state’s key trade corridors and complement local infrastructure efforts.” Several have risen to the challenge. They proposed raising the state’s diesel sales tax—by 300 percent.
Assembly Bill 8 and Senate Bill 7 seek to increase the additional sales and use tax rate on diesel fuel to 5.25%, from the existing 1.75%. The bills must be approved by 2/3 of the membership of each house in order to be enacted, as they “would result in a taxpayer paying a higher tax.” If approved as written, the increase would take effect on July 1, 2016 and would raise an additional $300 million for the State Transit Assistance (STA) program.
Balanced or unsustainable?
Senator Ben Allen (D-Santa Monica) called the tax part of a “balanced approach” to improving the state’s transportation infrastructure. Yet Mike Matousek, director of state legislative affairs for the Owner-Operated Independent Drivers Association, argues that “increasing the already enormous burden on small-business truckers—and other diesel users—to further finance public transit projects is bad policy, perpetually unsustainable, and will do absolutely nothing to address the state’s road and bridge needs” (Land Line Magazine).
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