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Local Tax Elections:
Approval of Local Sales Tax Increases Would Increase Gas Prices

California motorists are upset by the recent surge in gasoline prices, but will this anger negatively impact the fate of 35 local sales tax measures on the November ballot? Passage of any of these tax hikes will increase the price of gas in the jurisdiction, with the increase in some areas totaling more than 4 cents per gallon.

This occurs because gasoline is subject to local sales taxes, and as the rates go up, the added tax is built into the price of gas.

For example, there are nine jurisdictions proposing a 1 percent increase in sales tax (Carmel, Clearlake, Fairfield, Hollister, La Mirada, Lathrop, Maricopa, Moraga and Yucca Valley). If the average price of gas is $4.50 a gallon, a 1 percent tax equals 4.5 cents per gallon, and the price of gas would increase by that amount.

There are a number of relatively large jurisdictions proposing sales tax increases. These include Alameda County (0.5 percent), Fresno County (0.125 percent), Los Angeles County (continuing a 0.5 percent tax), Marin County (0.25 percent tax), Napa Valley Transportation Authority (0.5 percent), the city of Sacramento (0.5 percent), the city of San Mateo (0.5 percent), Santa Clara County (0.125 percent), and the city of Vacaville (0.25 percent). Will voters in these areas cast ballots in favor of higher fuel prices?

October 19, 2012
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