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Gas Tax To Push Prices Higher In July

LOS ANGELES ( — Drivers across Southern California will soon be paying almost four cents more for every gallon of gas they buy as a statewide gasoline tax is set to take effect.

A 3.5-cent increase to California's excise tax on gasoline scheduled to take effect July 1 will make gas more expensive as many families began taking summer getaways.

Jaime Garza of the State Board of Equalization told KNX 1070 NEWSRADIO the increase is part of a "Fuel Tax Swap" that will lower the sales and use tax rate applicable to sales of motor vehicle fuel and raise the state excise motor vehicle fuel tax.

Jaime Garza

"It's a balancing act: you're either gonna pay up front 7.5 percent sales tax, or you're gonna get the break up front and it gets picked up on the back end, which is the excise tax," Garza said. "That's money that goes to mass transit and to help build our roads."

The state legislature mandated the tax swap in July 2010 under former Gov. Arnold Schwarzenegger.

Garza also denied reports that the tax hike is due to more drivers buying more fuel-efficient vehicles - and thus less fuel.

"Consumption has been down slightly, but the gas prices have increased substantially, so much in fact that it's offset the savings," he said. "So sales tax has increased, and that's why we see an adjustment."

Fellow Board of Equalization member George Runner issued a statement voicing his concern that Californians will soon begin paying the highest gas taxes in the nation.

"Although the Board of Equalization must implement the law as written, a certain amount of discretion comes into play. Most of the July 1 increase is based on uncertain projections of future gas prices.

"I don't think we should be in the business of raising taxes based on guesswork," the statement read.

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