California residents are set to face higher gas prices starting July 1, following an increase in the state's gas tax and new regulations from the California Air Resources Board (CARB), whose members are appointed by Governor Gavin Newsom. The excise tax on gasoline will rise by about two cents to 61.2 cents per gallon, while new Low Carbon Fuel Standard regulations are expected to add up to 65 cents per gallon, with the potential for an 85-cent increase. As of June, average gas prices in California were around $4.74 per gallon, 51.4% above the national average. Some projections suggest gas prices could reach $8 per gallon by the end of 2026, partly due to the potential loss of 20% of the state's refining capacity. Efforts by Republican lawmakers to repeal the CARB regulations and delay the gas tax increase through Senate Bill 2 failed in the state Senate by a 10-23 vote, with Democrats voting unanimously to maintain the scheduled hikes. CARB chair Liane Randolph admitted the board had not considered the economic impact of the new regulation. In parallel, California Democratic lawmakers are considering a new healthcare-related tax on major corporations such as Walmart and Amazon to help cover the state's rising Medi-Cal expenses. The proposed 'Free Rider Penalty' would target companies that do not provide health insurance to their lowest-paid employees, modeled after Massachusetts' Employee Medical Assistance Contribution. The Democratic Legislative Latino Caucus has expressed support for new taxes to fund Medi-Cal, with State Sen. Caroline Menjivar stating, "Year after year, after year, after entities and businesses are getting away with providing a less than livable wage, are getting away with forcing them into our state’s driven Medi-Cal program." California faces a budget gap of at least $12 billion this year, with Medi-Cal costs expected to reach about $11 billion. The state's general fund has grown to $229 billion. Governor Newsom has proposed new limits on health coverage for undocumented residents, following an expansion that contributed to higher Medi-Cal spending. Some Democratic legislators are pushing back against these limits and supporting new corporate taxes to fund healthcare. The healthcare tax proposal is under discussion and may be introduced later this year. California lawmakers have also advanced a range of bills addressing affordable housing, utility regulation, and labor protections as part of efforts to tackle the state's high cost of living.