CA's excise gas tax to drop - Highway projects may be delayed

In order to adjust gas taxes each year the California Legislature enacted a law in 2010 that makes the State Board of Equalization adjust the gas tax each year based on the price of fuel. As you know gas prices are down and, soon so will be the tax by 2.2 cents a gallon. That was the 3 to 2 decision Tuesday by the Board meeting in Culver City.

Drivers we spoke with thought it was great although none thought they'd feel the 2-cents. When we told them there would be an impact on highway projects and public transportation they said they'd rather pay higher taxes.

The Chairman of the Board - Jerome Horton - says you may not even notice the cut at the pump. Says Horton, "The pennies adjustment won't make a difference on the sales price but it will make a difference on the transportation fund." But, what the drivers we spoke with really didn't understand is that that 2.2 cents a gallon they're going to be saving translates to about 328 million dollars in cuts to public transportation and highway projects.

Lauren Wonder with Cal Trans says, "You may see less improvement projects, ramp widening, capacity enhancements… local road improvements. She adds there will be cuts to State Improvement Projects over the next 5 years beginning this summer. The cuts will be to the tune of $754 million dollars. She says the California Transportation Commission has been aware this might happen and preparing, but not happy.

FOX 11 News obtained a letter sent by the CTC to the CA. Legislation - which caused for the annual Board excise tax adjustment. In part, the letter reads that if the cut is implemented the result could be "nothing short of catastrophic."

In the letter, commissioners says widening project around the State, including Los Angeles, could be delayed as could a parts of a rail project at Burbank Airport.

The Cal Trans cuts and the gas tax cut go into effect July 1st, 2016.