Surging Gas Prices A Pain For Drivers, Windfall For Struggling SoCal Cities

LOS ANGELES (CBS) — That pain you may be feeling at the gas pump is bringing some much-needed paper to the coffers at City Hall.

KNX 1070’s Pete Demetriou reports the continue rise in gas prices has brought in more sales tax revenue to city governments.

With gas prices averaging $3.73 per gallon and expected to hit $4 per gallon within months, cities in the San Gabriel Valley have seen sales tax revenue jump as much as 20 percent over the last 18 months.

The windfall has seen many gas stations outstripping local “big box” stores, malls and even auto dealerships as Sacramento begins scaling back funds for local governments.

Driver Keith Green said he understands why cities are seeing dollar signs — and in some cases encouraging the building of more gas stations near freeways.

“Gas stations aren’t going anywhere anytime soon, so at the same time, why not capitalize on the increased taxes for gas,” he said.

But some business groups have expressed concern that if gas prices break through the $4-per-gallon barrier again, families will cut back on travel and gas consumption, which would send revenue plummeting and further destroy consumer confidence.

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