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BOE Increases HUTA Rates for Next Fiscal Year

March 23, 2017
The state Board of Equalization (BOE) adopted staff recommendations and adjusted the price-based motor vehicle fuel tax and diesel fuel tax rates. 
 
This is effective July 1, 2017.
 
These actions were required to comply with provisions of the 2011 Motor Vehicle Fuel Tax Swap which replaced the state sales tax on gasoline with a per gallon excise tax designed to be revenue neutral over time. This component of Highway Users Tax Account (HUTA) revenues to state highway and local streets and roads programs has declined precipitously since the inception of the swap, largely due to the cost of fuel but exacerbated by the fuel swap mechanism. Reforming and stabilizing this tax system is a key component of all of the transportation funding reform proposals under discussion.
 
The BOE’s Feb. 22 action increases the motor vehicle fuel tax by $0.019 per gallon to $0.297 per gallon effective July 1, 2017. The excise tax rate on diesel fuel will not change from the current rate of $0.16 per gallon.
 
These rate changes were anticipated by the state Department of Finance (DOF) in the Gov. Jerry Brown’s 2017–18 proposed budget released in January. DOF’s statewide fuel tax collection estimates are the basis for the city-by-city and county-by-county estimates that were released last month. Therefore, the HUTA estimates released in January already take into account this action of the BOE and may be used for budget purposes.
 
The full updated (March 15, 2017) HUTA FAQ with city-by-city and county-by-county estimates are available through CaliforniaCityFinance.com.  


 
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