Gas prices across the state are reaching record highs, a partial result of the 2018 decision to uphold the state’s high gas tax.
Prices at the pump continue to increase nationwide, with Californians paying more for a gallon of gas than residents of any other state by far – and a failed ballot initiative in 2018 may be directly responsible for some of this pain.
Gas prices reached a record high on June 6, after increasing for several straight days the previous week. In California, the average gallon of gas costs $6.34, or nearly a dollar higher than the next highest state, which is Nevada.
However, California’s rate would be far closer to the national average if not for the state’s exorbitant gas taxes. A 2021 study by the firm Stillwater and Associates found that around $1.18 of the cost of every gallon of gas in California is comprised of taxes and fees. These include a state excise tax of 51 cents per gallon, as well as low carbon and greenhouse gas programs – which together added 37 cents to each gallon.
While the Biden administration has blamed the current price spike on the Russian invasion of Ukraine, the vast discrepancy between states is harder to explain away. Indeed, a 2019 investigation by the state found that California’s uniquely high gas prices are the result of “a number of readily explainable factors like California’s additional program costs.” Meanwhile, no evidence of illegal price fixing by oil companies was found, despite attempts by Governor Gavin Newsom to find malfeasance.
In 2018, California voters approved the state’s recent gas tax increase when they rejected Proposition 6. The ballot measure, if passed, would have repealed the Road Repair and Accountability Act of 2017, which raised gas taxes by 12 cents per gallon – a figure set to increase with inflation. However, Prop 6 ended up failing by a wide margin.
The Road Repair and Accountability Act stipulated that the revenue collected from the 12-cent gas tax increase would go to the upkeep of California’s highway infrastructure. However, a recent report by the American Road and Transportation Builders Association found that nearly 6% of bridges in California are “structurally deficient,” including many along major highways. California ranks 27th in the nation for bridge deficiency.Since the start of the current price spike, Democrats in Sacramento have repeatedly rejected Republican efforts to suspend gas taxes throughout the state. Meanwhile, taxes are set to spike by nearly 3 cents per gallon on July 1, in accordance with the Road Repair and Accountability Act’s inflation adjustment provision.
