BOE Member George Runner

George Runner today issued the following statement after a 5-0 Board of Equalization vote to reduce the state’s gasoline excise tax rate by 6 cents (instead of the proposed 7.5 cents), from 36 cents to 30 cents effective July 1 of this year:

“This gas tax cut, although less than originally proposed, is still good news for overtaxed Californians, who currently pay both higher gas prices and higher taxes than residents of other states.

“Today’s vote stems from a confusing and complicated formula known as the ‘gas tax swap.’ The Legislature enacted the formula a few years ago in order to redirect more than a billion dollars of transportation funding elsewhere. Under the gas tax swap law, the Board must annually adjust the gas tax rate to guard against over collection of tax.

“State revenues from fuel taxes reached a record $8.7 billion last fiscal year. Today’s vote will help correct the over collection of tax that is resulting from lower gas prices.

“But even after this tax cut takes effect July 1, Californians will continue to pay more gas taxes and fees than residents in nearly every other state. In fact, the Board’s cut won’t even fully offset the cost of a new ‘hidden gas tax’ that took effect January 1 to help fund high speed rail and other so-called anti-global warming efforts.

“Instead of raising taxes, lawmakers ought to use all of the dollars California drivers already pay at the pump, including the new hidden tax dollars, to improve our roads and eliminate congestion. In addition, we ought to invest more General Fund dollars in transportation as well.”

BOE Lowers Gasoline Excise Tax Rate 6 Cents

Culver City – Members of the California State Board of Equalization (BOE) today voted to lower the excise tax rate for gasoline by $0.06 for Fiscal Year (FY) 2015-16 during their meeting today in Culver City.

“This gas tax cut, although less than originally proposed, is still good news for overtaxed Californians, who currently pay both higher gas prices and higher taxes than residents of other states. But even after this tax cut takes effect July 1, Californians will continue to pay more gas taxes and fees than residents in nearly every other state. In fact, the Board’s cut won’t even fully offset the cost of a new ‘hidden gas tax’ that took effect January 1 to help fund high speed rail and other so-called anti-global warming efforts,” said Vice Chair George Runner.

Since 2010, the “fuel tax swap” law has required the Board to adjust this tax rate by March 1st of each year. With today’s action, the excise tax rate on gasoline will be $0.30 per gallon from July 1, 2015 through June 30, 2016. The current excise tax rate of $0.36 is in effect through June 30, 2015.

Drivers pay two types of state taxes on gasoline — sales tax and a per gallon excise tax. Before the “fuel tax swap” took effect, drivers paid the full sales tax rate (then 8.25 percent), and an excise tax of $0.18 per gallon.

The excise tax on gasoline pays for public road improvements and mass transit. In FY 2013-14, the BOE collected nearly $5.8 billion for the Motor Vehicle Fuel Account, Transportation Tax Fund. The sales tax on gasoline primarily funds local government programs.

The “fuel tax swap” lowers the sales tax rate to 2.25 percent on gasoline and requires the BOE to set the per gallon excise tax rate, so drivers pay the same amount of state taxes on gasoline as they would have paid under the prior tax structure.

In addition to projecting sales tax revenue that would have been generated under the old tax structure, the law also requires the BOE to review the actual excise tax revenue generated in the prior fiscal year and subtract that from projected revenue for the coming fiscal year. This calculation determines the coming fiscal year’s excise tax rate.

Elected in November 2010 and re-elected in 2014, George Runner represents more than nine million Californians as a member of the State Board of Equalization. For more information, visit www.boe.ca.gov/Runner.