California Governor Jerry Brown signed a bill on Friday that enacts a major fuel tax increase. This is the first time in decades when the state imposes a substantial fee on gasoline and other aspects related to transportation. The funds that these taxes are going to raise are projected to amount to a total of $52 billion and will cover the expenses of infrastructure repairs only.
The Fuel Tax Bill Raised Criticism from Republicans
The current rate on excise taxes for gasoline is 28 cents per gallon, yet it is going to increase by 12 cents. At the same time, diesel fuel will cost 20 cents more per gallon. The new fuel tax will go into effect as of November 1 and will last for the course of the upcoming ten years. However, once this period completes, the government will not shut down the project. Instead, policymakers will continue to impose this tax beyond the 10-year threshold so as to cover a backlog of $130 billion.
The bill gained large support from two-thirds of Democrats. This was enough for it to pass as a new tax. On the other hand, Republicans criticized this infrastructure plan. To their view, the transportation fees in the state have already reached record values in the entire country.
Thus, the freshly signed bill will enable the new transportation plans as of November 1st. Through major fuel tax increases, the government is looking to obtain $5.2 billion each year for a span of 10 years. The funds will go solely to bridge and road repairs and also increase the mass transit in California. While consumers will have to dig deeper in their pockets, the new infrastructure strategy will also create new jobs.
A Companion Bill Will Make Sure Collected Taxes Will Cover Solely Transportation Expenses
Among the first changes will be fixing the decaying bridges along Interstates 210, 710, and 5. Moreover, the government intends to get rid of potholes along 114 Freeway in Santa Clarita, Interstate 605 but only the portion between Interstates 210 and 10, and 170 Freeway, San Fernando Valley.
Among sharp backlash regarding the new infrastructure plan, Governor Brown claimed that most Californians would have to pay no more than an extra $10 per month. Moreover, there will also be a companion bill that forces authorities to invest the funds coming from new fuel tax solely on transportation.
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