California Gas Tax Bill Reworked Into Tax On Suppliers

SACRAMENTO (CBS13) — There's a new twist and more controversy as California lawmakers debate the best way to bring down record-high gas prices.

The state's gas tax is around 51 cents per gallon, and no one wants to spend more than $100 to fill up their tank.

But still, experts say the path to reducing prices can be tricky. As gas prices soar, the pain in driver's pockets is not going away.

This week, efforts to suspend the state's gas tax for six months from republican Assemblymember Kevin Kiley failed.

"This is a common-sense measure," Kiley said. "This is a lever we could pull that would give meaningful and immediate relief to millions of Californians."

Instead, it was replaced with amendments from Democrat lawmaker Alex Lee that guts the entire original bill.

"Lowering taxes is what is going to lead to lower gas prices, I don't think raising gas tax is going to lead to lower gas prices. It's a ridiculous proposition," Kiley explained.

The amendments would increase taxes on gasoline suppliers when the price of gas is abnormally higher than crude oil arguing suspending the tax would impact other essential needs. His proposal also includes a rebate for drivers.

"By defunding the essential money that we are putting to our roadway improvements, the progress that we have made in a couple years is fiscally irresponsible," Lee said.

Drivers have mixed opinions on the proposals.

"Suspend the gas tax because that is going to be more immediate results," Kevin Brown said.

"We need to get the rebate back," Chevonne Sumler said. "Next thing you know, everyone is going to be on bikes."

So which approach is best for your pocketbook?

UC Davis resource economist Mark Agerton agrees that suspending the tax could hurt money used for roads but believes taxing suppliers also comes with issues.

"If we don't have money to fix the roads, we could see longer-term problems," he said. "It doesn't really matter if you put the tax on at the pump or at the refinery. The price is going to end up being the same regardless."

Agerton explains that giving drivers reimbursement before they get to the pump with no strings attached would be a better solution without creating a negative domino effect.

"It's going to cause people to buy more or less than they would normally without those taxes or subsidies," he said. "By just giving people checks in the mail, basically you're not going to change or distort consumers' decisions."

The new version of the bill passed in committee. Kiley said he will continue to push for immediate changes.