Republicans Are Urging Newsom to Suspend California’s Gas Tax in the Face of Skyrocketing Costs.

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EXCLUSIVE: California gas prices broke another record last week, with residents paying the highest prices in the country. A group of state House Republicans believe they have found a solution.

In a letter to California Gov. Gavin Newsom on Tuesday, a group of Republican lawmakers led by Rep. David Valadao urged the governor to temporarily suspend the state’s 51-cent-per-gallon gas tax to assist ease the financial burden of rising gas prices.

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The tax is meant to pay road and other infrastructure projects; the state’s Legislative Analyst’s Office estimates that it will create around $8.8 billion in revenue during the fiscal year 2021-22.

“Even as fuel prices soar, California continues to tax gasoline at 51.1 cents per gallon,” the lawmakers stated. “While market forces are to blame for today’s extraordinary prices, California’s high taxes add to the burden, and working Californians simply cannot afford petrol prices reaching $6 per gallon.”

According to AAA, the price of a normal gallon of gas was $4.31 on Tuesday, up from $2.86 a year earlier. However, as is customary, California has witnessed the highest petrol prices in the country, with a gallon of gas reaching $5.75. Prices in some sections of the state are much higher: Mono County has an average price of $6.50 per gallon.

 

Gas Tax

 

“With the cost of commodities rising across the board and the price of a gallon of petrol at all-time highs, now is the time to investigate all avenues of relief,” Republicans urged, including House Minority Leader Kevin McCarthy. “We urge you to immediately suspend California’s fuel excise tax for six months.”

They pointed out that Newsom, a Democrat, has previously indicated support for assisting California motorists by postponing the implementation of a 5.6 percent tax increase set to take effect on July 1. However, according to a LAO estimate, it would only save drivers roughly 3 cents per gallon. Newsom’s office has also proposed a rebate for California residents who own cars registered in the state.

“We recommended a break in gas taxes in January,” Newsom stated during his State of the State address. “It’s evident that we need to go further. That’s why, in collaboration with legislative leadership, I’ll be introducing a proposal to put money back into Californians’ pockets to address rising gas prices.”

High gas prices at a California petrol station

On Sunday, March 13, 2022, in Los Angeles, gas prices in Westchester are more than $6, as prices at the pump continue to increase across the Southland.

California state Republicans offered legislation in January that would suspend the gas tax immediately in reaction to rising prices and fund the projects with the state’s $45 billion surplus, but the measure failed to garner enough votes on Monday.

The lawmakers stated that they are willing to support Newsom’s refund in the future, but only if it is combined with a gas tax holiday.

“Yesterday, the Democratic supermajority in California had an opportunity to bring genuine help to hardworking California families battling with record high gas costs,” Valadaon said in a statement to FOX Business. “It’s regrettable that they chose not to put more money back into Californians’ pockets by deferring the gas tax.”

According to one Wall Street analyst, increasing fuel prices might cost the average American household $2,000 more each year.

The sky-high gas prices are the result of the pandemic’s faster-than-expected economic recovery, which has resulted in the hottest inflation in decades due to strong consumer demand, a flood of government stimulus, and disruptions in the worldwide supply chain.

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However, in recent weeks, the conflict between Ukraine and Russia has driven up worldwide prices by obstructing the world’s access to energy sources. Despite the fact that oil prices fell below $100 per barrel on Monday as a result of talks between the two countries, gas prices remained high.

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