As the average price of a gallon of self-serve regular gasoline in Los Angeles County rose to its highest amount since October 2023 this week, the surge at the pump has quickly become an issue for candidates running to become California’s next governor.
Democratic gubernatorial candidates Matt Mahan, San Jose mayor, and Antonio Villaraigosa, former Los Angeles mayor, are among those who are calling on the California legislature eliminate the state excise tax for the time being.
“I’m calling on the legislature to temporarily suspend the gasoline tax and provide relief to those who need it most,” Mahan said.
The two Democratic candidates are joining the two Republicans in the race, Riverside Sheriff Chad Bianco and former Fox News host Steve Hilton, in calling for the suspension of the gas tax.
Gas sold in California is normally at least $1.50 more expensive than the rest of the nation, according to economist Soverin Borenstein.
“About a dollar of that is due to the higher taxes we have, the environmental fees we have and that we use a cleaner burning gasoline, which has helped clean the air considerably,” Borenstein from the Energy Institute at Hass School of Business.
Due to the disruption of oil markets as a result of the war in Iran, the average price in the state as of Monday was an eye-popping $5.52 per gallon. Of that, appropriately 61 cents is the state excise or gas tax.
The revenue collected from the gas tax is used for road repairs and Caltrans projects across the state.
Despite the demand from the gubernatorial campaign trail, it is highly unlikely that the California legislature will suspend the gas tax. The super-majority of Democrats opposes the suspension of the gas tax as it see the suspension as robbing the state of needed revenue.
In a statement, Gov. Gavin Newsom’s office referred to gas taxes as fixed costs that do not fluctuate with the market and have nothing to do with the price spikes that Americans are experiencing.
“This excise tax goes to critical infrastructure projects that have made our roads safe and that’s why the voters voted to proactively increase this tax,” Democratic State Senator Ben Allen said in defending the need for the gas tax.
But with no end to the war and continued crisis in the Straight of Hormuz, the world’s most consequential oil transit chokehold, pressures for the state to do something may only increase.
“If the conflict drags on, it’s possible that prices could spike quite a bit higher,” Borenstein said.