Drivers line up at the pumps before new gas taxes kick in Wednesday

EUREKA, CA. – California’s newest gas tax takes effect Wednesday, and drivers were lining up at the pumps Tuesday to save.

Gas lines were out to the street at Costco with people trying to beat the price bumps.

Along with regular gas prices increasing by 12 cents, increases are also scheduled for diesel fuel, jumping from 16 cents to 36 cents per gallon.

Tax revenue from diesel fuel alone is expected to generate over one billion dollars a year, with regular gas racking up nearly 2.5 billion annually.

Come January, Californians will pay a new “Transportation Improvement Fee” – which will cost between 25 to 175 dollars, depending on the value of your vehicle.

Value Fee
Up to$4,999 $25
$5,000-$24,999 $50
$25,000-$34,999 $100
$35,000-$59,999 $150
$60,000 and up $175


Once in effect, that fee will add up to 1.6 billion a year.

So where will all of these billions of dollars go? Road maintenance and rehabilitation, says the state.

The more than $5.2 billion in annual funds will be directed towards repairing roads and bridges, improving mass transit, expanding bike lanes and more – with approximately 57% towards state highways, 36% for cities and counties for various street and road needs, and 7% for transit.