Last week, Governor Newsom announced a proposed relief package for Californians impacted by high fuel prices. This package would provide a one-time $11 billion budget allocation that include a one-time rebate for vehicle owners, incentives for transit agencies to provide free public transportation for three months, and a pause on a portion of the sales tax rate on diesel fuel.

 

The governor’s proposed pause would delay the annual inflation adjustment on the diesel fuel excise tax rate that is set to increase on July 1, 2022. The pause could save diesel vehicle owners up to $600 million based on a 5.6% inflation rate increase.

 

The proposal also includes a one year pause for part of the sales tax rate for diesel fuel which generates between $500 - $600 million or around 5% tax savings per gallon of diesel.

 

This proposal is subject to Legislative approval before becoming law.

 

CTA’s Government Affairs Team is engaged on this issue and will keep sharing updates as they become available.