California Strikes Deal with Truckers to Hike Fuel Tax

April 7, 2017

By Steven Martinez

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Congestion in California. Photo: U.S. Dept. of Transportation
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.


  1. 1. Ron Geary [ April 07, 2017 @ 11:29AM ]

    Rates are cut...Fuel taxes and registration fees increase.
    And Brokers call us "Greedy".

  2. 2. Curtis Belk [ April 07, 2017 @ 12:42PM ]

    I hope that Trump decides not to use federal money on CA highways, seeing as this is an amazingly outrageous increase in expenses on CA businesses and citizens.

  3. 3. Steve [ April 07, 2017 @ 03:57PM ]

    California is sitting on over $20 trillion in liquid investments ! And Brown says "OMG!" We're broke ! - need to raise taxes on the public again and again and again......

  4. 4. John L [ April 08, 2017 @ 08:59AM ]

    When the cost of fuel goes up too much, people tend to buy less fuel. Therefore, the anticipated income from raising the fuel tax, is never achieved.

  5. 5. Greald [ April 10, 2017 @ 07:15AM ]

    The states of Oregon, Nevada and Arizona are very happy as anyone on the border will be able to buy gas more cheaply in these states. Trucking, not so lucky, as they are taxed on miles. Same thing for vehicles driven into California, the gas stations close to California will receive an increase in business. Same thing happens to Chicago, as there fuel prices are much higher than the rest of the state and surrounding states.

  6. 6. Valleyraven [ April 10, 2017 @ 08:42AM ]

    Not only is this a NEW tax, the bill will increase existing diesel fuel taxes by 4%. The transportation fund has been raided by Cal State Legislature for over a decade. But full steam ahead for a high speed rail line that nobody wants or wants to pay for anyway. There is little doubt why SO many honest, hard working people/companies leave this state daily. California, the rest of the country doesn't care for your ideology. We just want you to keep it within YOUR state borders, lest it infect the rest of the nation.

  7. 7. Dhiggins [ April 11, 2017 @ 08:13PM ]

    Small businesses of all types in the rural counties of California located next to other states, are being squeezed to the point of breaking. Those that use trucking either incidentally or directly in the manufacturing and/or delivery of their products simply cannot compete directly with out of state companies crossing the border to deliver into California. The state is making criminals of honest people who endure hardship and sacrifice to serve these areas because they cannot comply with the laws passed to benefit the urban populations. We have no voice and get no respect from our legislators... no thought as to how the homes, roadways and services in the seasonal areas will be maintained and sustained. areas will be maintained and sustained. They flock like locusts to our counties for recreation but ignore the consequences of the laws they pass and complain like spoiled children when prices are higher than they are used to. We need the Feds to step in and stop the outrageous regulations and taxation we are being forced to endure.

  8. 8. MC [ April 20, 2017 @ 06:00AM ]

    You Californians just pray that the tax funds are actually being used on transportation infrastructure. Here in Pennsylvania we suffer the highest fuel taxes in the country (by a large margin) yet our many of our roads are outdated and rank among the worst in the nation in condition and PENNDOT is nowhere to be found during winter weather. You'd think with these huge tax rates, large population, proximity to the Boston-NYC-Philly-DC megalopolis (which greatly increases commerce traffic), and the fact that one of our largest highway systems is a turnpike (that funds most of it's own construction/repairs), Pennsylvania's transportation coffers would be overflowing. Where's the money going?


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