What happens if Proposal 1 passes?

What happens if Proposal 1 passes?

The short answer is that, for most people, taxes will increase to fund road repairs and other things. The longer answer is more complicated.

As you probably know, Proposal 1 would increase the sales tax from 6% to 7%.

The proposal would also increase the fuel tax to 41.7 cents/gallon or 14.9% of the fuel's price, whichever is greater. Current taxes on fuel are 19 cents/gallon plus the 6% sales tax. Under Prop 1, fuel would no longer be subject to the state sales tax. Revenue from the fuel tax would be directly allocated to the transportation fund. It would also end registration fee discounts, increase registration fees for heavy commercial vehicles, and create a special surcharge for electric vehicles.

Proposal 1 would also increase the Earned Income Tax Credit—effectively a tax break for low-income workers—from 6% to 20%.

You can read the House Fiscal Agency's full analysis on the state's website.

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