By City News Service
LOS ANGELES (CNS) - The streak of decreases in the average price of a gallon of self-serve regular gasoline in Los Angeles County was extended today to a ninth day despite a 3.5-cent per gallon increase in the excise tax.
The average price dropped six-tenths of a cent to $4.056, 7.8 cents less than one week ago, but 4 cents more than one month ago and 31 cents higher than one year ago, according to figures from the AAA and Oil Price Information Service.
The average price has dropped 8.5 cents over the past nine days, including seven-tenths of a cent on Monday. The dropping prices were immediately preceded by a 15-day streak of increases totaling 15.8 cents.
The Orange County average price also decreased for the ninth consecutive day today, dropping six-tenths of a cent to $4.042, 7.2 cents less than one week ago, but 6.2 cents more than one month ago and 33.9 cents higher than one year ago.
The average price has dropped 8 cents over the past nine days, including three-tenths of a cent on Monday. The string of declines was immediately preceded by a 16-day streak of increases totaling 17.6 cents.
The dropping pump prices follow a large decrease in wholesale gasoline prices as fears of a shortage have disappeared, according to Marie Montgomery Nordhues of the Automobile Club of Southern California.
A 3.5-cent per gallon increase in the gasoline excise tax went into effect Monday.
The California Board of Equalization is required to adjust the excise tax rate by March 1 each year to ensure revenue neutrality under laws that went into effect in 2010 that lowered the sales and use tax rate of gasoline and increased the excise tax.
The state sales tax on gasoline is 2.25 percent, while the rate for most other consumer goods is 7.5 percent. To make up the difference of what is not collected in gasoline sales taxes, the board must adjust the excise tax so there is no change in the overall tax burden at the pump under the prior tax structure.
Gasoline consumption has been reduced slightly in recent years, but increases in the gasoline price in 2011 and 2012 outpaced the declines in consumption.
Gasoline sales tax revenues fund local government programs while the state excise tax on gasoline funds highway and mass transit projects throughout California.
Board of Equalization member George Runner, one of two board members to vote against the increase, said "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.''
Board of Equalization Chairman Jerome Horton told City News Service "the board simply enacts a rate adjustment of the excise tax on gasoline based on staff's recommendation derived from the best available data at the time.''
"Although not a perfect system, it is far from guesswork. Mr. Runner knows this. He is also well aware that the board's statistics department recommends a rate that best complies with state law, mandated by the Legislature.
"I appreciate Mr. Runner's protest vote on the current adjustment and I would have gladly joined him, but in doing so would have caused the BOE to be in violation of the law.''
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