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Blog Post · March 12, 2018

Californians and the Gas Tax Repeal

Governor Brown’s 2018–19 budget proposal includes a large boost to transportation funding because of recently passed legislation. In 2017, California raised the gas tax for the first time in 23 years, increasing gasoline and diesel fuel by 12 and 20 cents per gallon, respectively. The state also created a new annual fee based on vehicle value. The taxes and fees are estimated to raise over $4.6 billion in the next year to repair state and local roads, highways, and bridges, and to strengthen mass transit. However, a Republican-led initiative to repeal the bill continues to collect signatures to qualify for the November ballot.

In January, the PPIC Statewide Survey asked whether Californians favor a repeal of the recently passed increase in the gas tax. We found California’s likely voters are divided, with 47% favoring repeal and 48% opposed. But there are partisan differences: 61% of Republican and 52% of independent likely voters favor a repeal, compared to 39% of Democrats. Regionally, Republican (68%) and independent (60%) likely voters on the southern coast are the most likely to favor a repeal, while inland Democrats (62%) are the most likely to oppose it. We also saw strong partisan disparities on the importance of repeal in our December survey: among likely voters, Republicans (85%) were far more likely than independents (46%) and Democrats (36%) to say repeal of the recently passed gas tax was very important to them.

Opponents of the repeal argue that the gas tax increase was necessary to fund much-need repairs to the state’s infrastructure. Conversely, proponents—in addition to generally opposing tax increases—reason the state is well situated to fund transportation projects through other funding sources. For example, Republicans in the state assembly have introduced a measure that would dedicate at least 2% of General Fund revenues to infrastructure projects.

Changes to federal policy could also affect the state’s transportation funding. Last month, the White House released a plan that aims to generate an unprecedented $1.5 trillion—including an allocation of $200 billion in federal spending over the next decade—to repair and upgrade the nation’s infrastructure. To be eligible for matching federal funds, California would need its own state and local revenue streams, whether through the new gas tax or other sources. The White House also expressed interest in raising fuel taxes by 25 cents per gallon to help pay for the plan. This would represent the first increase at the federal level since 1993 and could create an additional burden for Californians, who already face one of the highest gas prices in the nation.

As California engages in its ongoing debate over how best to fund transportation projects, upcoming federal and state policy decisions may have major consequences for residents.


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