While states like Missouri, Alabama and Mississippi are considering raising their gas taxes to better fund infrastructure, California’s tax board recently decided that its residents paid too much for gas last year, and will give them a break at the pump.
The Associated Press reported that the California Board of Equalization voted 3-2 Tuesday to lower the state’s gas tax by 2.2 cents per gallon for the fiscal year that ends June 3o, 2017.
The gas tax was lowered to 27.8 cents from 30 cents
The board calculates each year how much of a gas tax Californians should pay under a formula that was implemented in 2010 to help with the state’s budget deficit.
The board is supposed to raise and lower the gas tax rate annually in order to ensure the state is bringing in the same amount of revenue over a three year period as it would have with the old sales tax.
“Californians overpaid gas tax last year because of a bizarre formula known as the ‘gas tax swap’ passed by lawmakers in 2010,” Board of Equalization Vice Chair George Runner said in a press release. “Lowering the rate is the right thing to do, and I’m sure Californians will welcome this reduction.”
The state already reduced the gas tax last year as a preemptive measure when gas prices began to plummet, but the 6-cent decrease wasn’t enough.
However, California Department of Transportation Director Malcolm Dougherty said the latest gas tax reduction coupled with the one from last year would reduce the amount of money going to transportation by $328 million next year.
“Although Caltrans will continue to prioritize safety projects, today’s action emphasizes the need for the comprehensive transportation funding package that the governor continues to call for,” Dougherty said.