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California SB1 Increased Vehicle Fees and Gas Taxes

The California State Senate recently approved a proposal to raise gas taxes and vehicle fees by $5.2 billion per year. This tax revenue will pay for repairs and improvements to local and state roads, highways, and bridges, mass transit projects, trade corridors for port roads, and reducing congestion on clogged commuter routes.

This bill raises excise tax on gasoline by 12 cents (to 30 cents) per gallon, and the variable excise tax will be 17 cents. The excise tax on diesel fuel will be raised by 20 cents per gallon, and the sales tax on diesel will increase by 4%. A portion of the excise tax will also rise with inflation over time. In addition to fuel tax, the bill also mandates new annual vehicle fees. These fees will range from $25 to $175 depending on vehicle valuation and will be charged in addition to current vehicle registration costs.

The new gas taxes will boost the cost for all vehicle owners, especially commercial truck drivers. Due to the increased financial burden of the additional fuel costs, SB1 was opposed by several agricultural industry groups, including the Western Growers’ Association and California Farm Bureau Federation.