State to get 3.5 cents more per gallon July 1
The price of gas always seems to inch upward as warmer weather approaches, but come July 1, the price of a gallon of gasoline will increase by 3.5 cents due to state legislation as opposed to the usual market forces.
On Feb. 28, the State Board of Equalization voted 3-2 to raise the state gasoline excise tax by 3.5 cents – from 36 cents per gallon to 39.5 cents per gallon. It’s the largest increase in the excise tax since new gas tax legislation was passed in 2010 to help close budget gaps in the state’s general fund.
The increase comes as part of a mandate that requires gas-tax revenue to be annually adjusted so that the amount of tax revenue generated from gasoline sales is equal to the amount that would have been generated had 2010’s legislation not been implemented – a practice known as revenue neutrality. According to the Board of Equalization, the increase is expected to generate more than $500 million annually.
California’s gas taxes are currently the second highest in the nation after New York, but after July 1 California will take the lead with an average of 70.1 cents per gallon.
Though the increase will undoubtedly affect Calaveras County – currently gas prices are hovering around $4.09 per gallon in San Andreas – Lisa Boulton, executive director of the Calaveras County Visitors Bureau, noted a potential silver lining in the groan-inducing tax hike, mainly that it may encourage vacationers to stay local in their travels.
“This might not necessarily be bad news for us. We’ve seen in the past that people who would usually travel internationally or out of state tend to stay in the state,” said Boulton.
Residents of the San Francisco Bay Area, one of Calaveras County’s largest tourism “drive markets,” may be more likely to make a trip out to the Mother Lode as opposed to driving longer distances to other destinations both in and out of state.
Boulton also commented on the potential revenue that could be generated as the result of an increase of “stay-cations.” To save money on gas, Calaveras County residents might be more inclined to visit nearby recreation attractions instead of taking lengthy drives to visit sites outside the county, saving on travel costs – a practice she encouraged.
“We’ve got so much to see and do in the area that if people haven’t yet visited those attractions they really should,” Boulton said.
For Surjit Singh however, owner of the San Andreas Shell Station and Yogurt Spot, the additional tax is “not acceptable.”
“People will be really upset with that,” said Singh. He went on to express the frustration that comes with having to explain to consumers why prices are going up and the lack of control he holds over setting prices.
“We have to face the customer,” he said of himself and other gas station operators. “Some (customers) understand but some also don’t.”
For Singh, the tax increase comes on the back of already exorbitant gasoline costs. He said that large oil companies make extraordinary profits and he has occasionally called the Shell Corp. to ask for a justification on price raises but “they never have a satisfactory answer.”
Some may be slightly appeased knowing that instead of landing in the pocketbooks of corporate oil executives, the excise tax revenue goes back into state and regional transportation projects, including transportation projects funded by the county’s regional Council of Governments – like the Wagon Trail Project – and toward maintaining streets and roads, but it’s likely no one will be eager to welcome the 3.5-cent increase with open arms.
According to Council of Governments Executive Director Melissa Eads, “even with the increases in excise and gas taxes the state is still looking at billions of dollars in budgeted shortfalls for roads.”
And for the everyday Calaveras business owner and resident like Singh, “People only have so much money. It’s not like we have lots of options.”
Contact Kristine Williams at email@example.com.