California is looking to raise billions of dollars for transportation projects by raising the fuel tax beginning on November 1, 2017.
— SFChronicle (@sfchronicle) October 27, 2017
On November 1, the excise diesel fuel tax will go up by 20 cents to 36 cents and the sales tax will increase form 9% to 13%.
This tax increase is a result of a bill that Governor Brown signed in April of this year. This bill will also increase vehicle license fees starting Jan. 1 and impose a new $100 annual vehicle registration fee on zero-emission vehicles starting with the model year 2020, according to the San Franciso Chronicle.
It was reported that this bill is expected to raise approximately $5 billion a year to fund state and local transportation projects “ranging from fixing potholes to reducing congestion on major highways.”
On top of this fuel tax increase, the prices of fuel will continue to fluctuate based on the price of oil, competition, and other economic factors.
Several Republicans and anti-tax groups are trying to overturn the increases.
— Los Angeles Times (@latimes) October 26, 2017
Jon Coupal, of the Howard Jarvis Taxpayers Association, explains, “One proposal would require any increase in car, gasoline or fuel taxes to be approved by voters, retroactive to Jan. 1, 2017.”
Although the tax increase on diesel is “sizeable,” the California Trucking Association supported the transportation bill, said Robert Ramorino, president of RoadStar Trucking in Hayward.
He explains trucking support saying, “We definitely need to fix the infrastructure, the paving, potholes and bridges, and bottlenecks that affect transportation around the Port of Oakland. We have been kicking the can down the road for a number of years. We need to pay our fair share. We hope to gain back some efficiencies by increasing the life of the road networks.”
He added that most trucking companies add a fuel surcharge to shipments, so the cost of the tax increase will be borne by transportation companies, their customers and ultimately end users.
Only time will tell who foots the bill for the fuel tax increase, but be prepared for fuel price changes in California beginning next week.
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