California Strikes Deal with Truckers to Hike Fuel Tax
Congestion in California. Photo: U.S. Dept. of Transportation
A bill to raise fuel taxes that could bring in $5.2 billion a year has advanced through the California legislature and needs only to be signed by Gov. Jerry Brown (D) before going into effect.
The base excise tax will jump 12 cents per gallon for regular gasoline and 20 cents per gallon for diesel fuel. In addition, the sales tax on diesel fuel will increase by four percentage points, according to the Los Angeles Times. The money will be used to support California’s aging transportation infrastructure.
To pass the bill, the governor tried to garner support from the trucking industry because the diesel tax will mostly impact transportation companies. The diesel tax alone will generate at least $10 billion in revenue over the next ten years.
Gov. Brown was able to strike a deal with lawmakers that will restrict the state from requiring owners to retire or retrofit trucks to meet new greenhouse gas regulations before they're 13 years old or reach 800,000 miles. Truck owners could keep vehicles as long as 18 years in some cases, according to the U.S. News and World Report.
That move that was predictably unpopular with environmental groups, which contend the provision will delay the impact of clean air regulations and harm California residents, particularly around busy ports and in areas with heavy truck traffic.
The bill also includes an increase in license and registration fees based on the value of the vehicle. The taxes and fees will increase over time with inflation.
The fuel tax hikes will take effect on Nov. 1 and the vehicle fee increases will start on Jan. 1, 2018.
The bill was contentious, with Republican lawmakers arguing against the increase in a state that already pays the highest fuel prices in the nation.
This is the first gas tax increase in 23 years for California. It comes on the heels of a recent New Jersey bill that increased fuel taxes in that state for the first time in 28 years.
Aging infrastructure is a hot topic both nationally and locally, with multiple states voting in favor of infrastructure reform during the election season late last year.
President Trump has indicated that one of his priorities is to increase infrastructure funding by as much as $1 trillion through public and private investment.