California Gas Tax Vote: Rate Hikes, Repeal, and Replacements

The California gas tax sits at 61.2 cents per gallon for the 2025–2026 fiscal year, the highest state gasoline excise tax in the country, and it is scheduled to rise to 63.4 cents on July 1, 2026.¹² The rate climbs automatically each year with inflation, which is why the number keeps moving even in years when no new law passes in Sacramento.

Where the Current Tax Comes From

Today’s rate traces back to the Road Repair and Accountability Act of 2017, better known as SB 1. Governor Jerry Brown signed the bill after it cleared both chambers with the required two-thirds supermajority, making it the first increase in the state’s gasoline excise tax since 1994. Lawmakers framed it as a response to a $130 billion backlog of deferred maintenance on state and local roads over the following decade.³⁴

SB 1 raised money through four channels. The gasoline excise tax went up by 12 cents per gallon, with annual inflation adjustments beginning in 2020. The diesel excise tax rose 20 cents per gallon, and the diesel sales tax climbed 4 percentage points. A new transportation improvement fee, scaled by vehicle value, added between $25 and $175 to annual vehicle registration. And zero-emission vehicles starting with model year 2020 pay a $100 annual registration fee of their own.⁴

The California Department of Finance estimated the average cost to drivers at about $117 a year, or roughly $10 a month. Collectively the SB 1 provisions were projected to raise more than $5 billion annually, totaling $52.4 billion over a decade.³

Half the money goes to state highway maintenance and half to local streets and transit. The local share is divided among road repairs, public transit, freight corridors, bicycle and pedestrian infrastructure, and planning grants. SB 1 created an independent Inspector General to oversee the spending and required cities and counties to publicly report how they use the funds. None of the revenue flows to the state’s General Fund, and a constitutional amendment approved alongside the law locks it into transportation uses.⁴⁵

Why the Rate Keeps Rising

Beginning July 1, 2020, SB 1 directed the California Department of Tax and Fee Administration to adjust the gasoline excise tax every year based on changes in the California Consumer Price Index. The compounding effect of that formula is visible in the rate history: 47.3 cents per gallon in 2019, 50.5 cents in 2020, 59.6 cents in 2024, and 61.2 cents for 2025–2026.⁶ The next bump, to 63.4 cents, takes effect July 1, 2026.²

Because the yearly bump happens without a legislative vote, it generates recurring political argument. Opponents argue voters never approved automatic annual hikes. Supporters respond that the inflation adjustment simply preserves the purchasing power of the original tax.

How California Stacks Up Against Other States

Looking only at state-level taxes and fees on gasoline, California stands apart. As of January 2026 the state charged 70.9 cents per gallon in combined state taxes and fees, against a national average of 33.3 cents. Alaska had the lowest rate at 9.0 cents. Pennsylvania was next-highest at 57.6 cents, followed by Connecticut at 52.4 cents, both still well behind California. California’s diesel burden is similarly the highest in the country at 87.3 cents per gallon, compared with the 35.5-cent national average.⁷

Why Pump Prices Run Even Higher Than the Tax

Taxes and fees are only part of what makes a California gallon expensive. The state requires a special cleaner-burning gasoline blend that costs more to produce, and compliance with the state’s Cap-and-Trade Program and Low Carbon Fuel Standard added as much as 54 cents per gallon as of early 2025. California also has no pipeline connection to the major Gulf Coast refining centers, so when in-state refining capacity is disrupted, prices move more sharply than they would elsewhere.⁸

That vulnerability has worsened recently. The closure of Phillips 66’s 139,000-barrel-per-day facility in Wilmington and Valero’s 145,000-barrel-per-day plant in Benicia stripped California of 17 percent of its refining capacity and pushed the state into greater dependence on fuel imports from Asia.⁹ State analysts have also pointed to a persistent “mystery surcharge” by oil companies that averaged about 41 cents per gallon between 2015 and 2024, suggesting industry pricing behavior accounts for part of the California-to-national gap beyond what taxes alone explain.¹⁰

What Has the Tax Actually Paid For?

Since SB 1 took effect, the state has allocated roughly $16 billion in gas tax and vehicle fee revenue. Caltrans reported repairing 6,400 lane miles of pavement over a recent three-year period, a 40 percent increase in the annual pace compared with before the tax increase, and the share of state highway pavement rated “good” rose from below 50 percent to 57 percent.¹¹

Bridges tell a less flattering story. The state now averages 211 bridge repairs a year, well above the pre-SB 1 average of 114, but the count of structurally deficient bridges still rose from 1,204 in 2016 to 1,536, while bridges rated in “good” condition fell from 16,788 to 12,898. Caltrans puts the ten-year need to maintain existing assets at $122.9 billion and projects current funding will cover about 45 percent of that.¹¹

Attempts to Repeal or Suspend It

Voters had a direct chance to undo SB 1 in November 2018. Proposition 6, organized by former San Diego City Councilman Carl DeMaio, would have repealed all of SB 1’s taxes and fees and required voter approval for any future fuel or vehicle tax increase.¹² It failed. The Legislative Analyst’s Office estimated that passage would have eliminated $5.1 billion in annual state revenue.¹³

Opponents of Prop 6, backed primarily by labor unions and construction companies, raised about $32 million. Proponents raised roughly $5 million. One sharp fight was over the official ballot title, “Eliminates Certain Road Repair and Transportation Funding.” A Public Policy Institute of California poll found 50 percent support when voters were asked simply about “repealing the gas tax hike,” but only 39 percent when read the official ballot language.¹⁴

A legislative suspension attempt also fell short. Senator Tony Strickland, a Republican from Huntington Beach, introduced the Gas Tax Relief Act (SB 1035) in early 2026. The bill proposed suspending three cost components for one year: the state gas tax, the Low Carbon Fuel Standard, and the LCFS cap-and-invest compliance mechanism. Strickland’s office estimated the combined suspension would lower pump prices by about $1.08 per gallon and save a two-driver household between $900 and $1,100 a year. The bill included a General Fund backfill for transportation and a requirement that gas receipts show what the suspended taxes would have cost.¹⁵ The Senate Environmental Quality Committee rejected the bill on March 18, 2026, with only two affirmative votes. Committee Democrats said the relief would be limited against broader global price pressures, and opponents warned that suspending the LCFS would strand clean-fuel projects.¹⁶

DeMaio’s organization, Reform California, is still pushing a repeal. The group is challenging ballot titles it calls misleading, drafting a new “Gas Tax Repeal and Replace” initiative for a future election, and working against Sacramento politicians who voted for the tax. The proposed replacement, branded the Road Repair Accountability Initiative, would direct 100 percent of existing gas tax revenue to road maintenance, dedicate all sales tax on car purchases to regional infrastructure, and impose competitive bidding on infrastructure contracts.¹⁷

What Might Eventually Replace the Gas Tax

The gas tax currently funds roughly 80 percent of California’s road repairs, and that revenue is eroding as more drivers switch to electric and fuel-efficient vehicles. Caltrans has been studying a “road charge,” a per-mile fee drivers would pay based on distance driven rather than fuel purchased.¹⁸

A pilot program tested two models: a flat fee of 2.8 cents per mile and an individualized fee based on a vehicle’s fuel economy, with mileage reported through manual odometer readings or transponder devices. The pilot wrapped in 2025 but has not produced legislation, and any shift to a per-mile system would need legislative approval. Critics, including El Cajon Mayor Bill Wells, have called the concept a regressive tax that would hit lower-income drivers hardest, and privacy concerns about government tracking of mileage remain. Hawaii is currently the only state with a mandatory per-mile charge for electric vehicles, and Iceland implemented a nationwide mileage-based road user charge for its entire vehicle fleet in January 2026.¹⁹²⁰

1
California Department of Tax and Fee Administration. Sales Tax Rates for Fuels
2
NBC San Diego. California’s State Gas Tax Set to Go Up July 1
3
Metropolitan Transportation Commission. Road Repair and Accountability Act (SB 1)
4
City of Cupertino. SB 1 FAQs
5
CalMatters Digital Democracy. SB 1 Bill Detail
6
California Department of Tax and Fee Administration. Fuel and Gas Tax Statistics
7
U.S. Energy Information Administration. State Gasoline Taxes and Fees
8
U.S. Energy Information Administration. California Gasoline Prices
9
U.S. Energy Information Administration. California Refinery Closures
10
CalMatters. California Governor’s Race Gas Taxes
11
Los Angeles Times. SB 1 Funding and Infrastructure Progress
12
inewsource. Prop 6 Gas Tax Repeal
13
Legislative Analyst’s Office. Proposition 6, 2018
14
CalMatters. Decoding Mixed Messages on California Props Poll
15
Senator Tony Strickland. Senate Democrats Kill Gas Tax Relief Bill
16
California Roadside Transportation Alliance. Legislative Update
17
Reform California. Gas Tax Repeal
18
California Department of Transportation. Road Charge
19
CBS 8. California Considers Road Charge as Gas Tax Revenue Declines
20
California Road Charge. California Road Charge Program