(The Center Square) – California’s gas tax is going up 2.2 cents Wednesday, bringing the tax to 63.4 cents a gallon in a state that often sees the nation’s highest gas prices.
The state’s gas tax is scheduled to go up every year on July 1 under a 2017 law, Senate Bill 1, in order to pay for California’s roads, highways and public transportation systems, according to a bill analysis. That law required the gas tax to be adjusted annually based on the California Consumer Price Index, a list of the average price Californians pay for various goods and services.
According to a transportation funding report from the Legislative Analyst’s Office, the gas tax was expected to generate $7.6 billion in fiscal year 2025-26. Of that money, roughly $1.9 billion went to the road maintenance and rehabilitation account, $2.5 billion went to cities and counties to pay for their roads and public transit, and $4 billion was put into the State Highway Account.
However, some lawmakers like Sen. Tony Strickland, R-Huntington Beach, think of the money generated by the gas tax as a way to pay for failing transportation projects such as the long-delayed, high-speed rail.
“A large reason why they did this back in 2017 is having a funding source for what I call the high-speed fail,” Strickland told The Center Square on Tuesday morning. “We should pull the plug on that, and then we wouldn’t have to raise taxes on hardworking California families at the gas pump.”
Paired with other taxes and fees on gasoline, California’s gas tax and fee burden is already the highest in the country, hitting 70.9 cents per gallon, according to the U.S. Energy Information Administration. By comparison, the lowest gas tax and fee burden in the country is in Alaska, at only nine cents a gallon.
Data from The California Department of Tax and Fee Administration shows that since 2017, the state’s gas tax has gone up, generating $7.94 billion in revenue in fiscal year 2024-25 to pay for the state’s transportation system. Numbers showing how much revenue the state collected from the gas tax in fiscal year 2025-2026 have not yet been published.
Despite the state’s gas tax getting even higher this year, Assemblymember Alex Lee, D-Milpitas, said the price at the pump is going up, in large part, due to the conflict with Iran. He also placed much of the blame on the federal administration in driving up gas prices.
“President Trump has inarguably worsened the gas price crisis because when he launched an unbridled and unmitigated attack on Iran, gas prices have become very, very volatile and they could go back up again,” Lee told The Center Square on Tuesday afternoon.
Lee also said the increase in the state’s gas tax is needed to generate enough revenue to maintain the state’s transportation system.
“I do think it’s necessary for the upkeep of our roads,” Lee said. “Our roads need that because there’s so many cars on the road right now, and especially as we figure out how EV drivers factor into the equation. We have to figure out how EV drivers pay for road maintenance.”
A bill introduced earlier this year, Assembly Bill 1421, proposed the study of a per-mile road use charge to increase state revenues to help pay for roads, highways and other taxpayer-funded transit infrastructure. That bill aimed to increase revenues that have been declining in recent years because of the number of electric vehicles sold in California and because the number of gallons sold statewide each year has gone down, The Center Square previously reported.
According to AAA, the average price of a gallon of gas in California on Tuesday was $5.43, above the national average of $3.85. The only state with a higher price was Hawaii at $5.47 a gallon.
In California, the counties with the highest average gas prices included Mono with $6.74 a gallon, Inyo at $6.16 a gallon and Sierra with $6.10 a gallon. The cheapest gas in the state on Tuesday was in Sutter County, at $5.17 a gallon.
The state with the cheapest gas in the country on Tuesday was Indiana, at $3.18 a gallon.