Why a plan to slash California gas prices by more than $1 is already dead

An aggressive plan to suspend multiple gas taxes and fees to save California drivers more than $1 a gallon is already dead, as a vote deadlocked Wednesday in a Democratic-led committee on the environment.

The Senate Environmental Quality Committee blocked Senate Bill 1035, which was authored by Sen. Tony Strickland (R-Huntington Beach) in an effort to ease pain at the pump. California has the highest gas prices and taxes in the nation with fuel costs now averaging $5.56 per gallon.

Strickland’s proposal would have temporarily suspended four major cost drivers — the state excise tax, state and logical taxes, the Low Carbon Fuel Standard and Cap-and-Trade compliance costs — lowering prices by an estimated $1.08 per gallon for one year, although possibly much more as gas prices have surged in the last few weeks.

“To say I’m disappointed is an understatement,” Strickland said. “We have an opportunity to help working families at a time when we have an affordability crisis. Democrats in Sacramento refused to help struggling Californians.”

California’s gas taxes and environmental programs already add well over $1 per gallon to the price of fuel, according to a report by the California Energy Commission. The state also faces structural supply constraints, with limited in-state refining capacity and fuel requirements that make imports more expensive.

Supporters framed SB 1035 as a stopgap as California heads toward additional pressure on supply, including planned refinery closures by Valero and Phillips 66 that are expected to reduce in-state production over time.

“With gas prices continuing to increase, my bill is the only immediate, short-term solution,” Strickland said, adding he wants Gov. Gavin Newsom to call a special session on fuel costs.

The governor’s office has disputed the idea that gas prices will come down by waiving taxes.

Michael Mische, a USC professor who testified in support of the bill, argued that the state’s policies — not the U.S. war with Iran, which has constrained the global supply of oil — are the main reason Californians pay more.

“Today’s vote against lowering gasoline prices for Californians was predictable and unfortunate,” Mische said. “Irrespective of the Iranian situation, California gasoline will continue to increase simply due to the taxes and environmental programs.”

Despite the bill dying in committee on a 2-2 vote, Strickland is vowing to continue bringing up the proposal as an amendment during the budget process.

“This doesn’t end today,” Strickland said. “If they’re not listening to their constituents today, maybe by the time gas hits $10 a gallon, they’ll wake up.”

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