Friday, April 7, 2017
California's Democratic Legislative Supermajority Only Needed One Way to Jack Up Car and Gas Taxes
California’s Democrats Only Needed One Week to Enact a $54 Billion Gas and Car Tax Increase California is a case study in how fast Democrats with a super majority in the legislature can enact unpopular tax increases. California is an amazing state politically. Taxes have to be increased when the economy slips since the state budget shows a deficit. Taxes have to be increased when the economy is booming since the state budget will show a deficit. They can’t control spending. The general budget grew $36 billion over the past 6 years, but none of that increase went to highways and roads. Infrastructure is not a priority for the Sacramento Democrats. The affluent state which pioneered freeways is becoming a national disgrace with its deteriorating roads. The state is undergoing an epidemic of potholes. California has raised income taxes, the sales tax, and cigarette taxes in the past couple of years, but it’s never enough. California has the nation’s highest income tax rates and state sales tax. It’s way up there in gas taxes and cigarette taxes, but the sky is the limit. Governor Jerry Brown ignored the state’s highways and roads in his first 8 years as governor. Now 6 years into his second 8 years, he suddenly discovered them. Or not! The state has a $59 billion deferred maintenance tab for the highways and $78 billion for local roads and streets. He proposed a week ago with the Democratic legislative leadership a bundle of car and gas taxes. He exclaimed it was time to fix the roads. He said it was good for the environment. Here’s the details. First is a 43% increase in the state’s gas tax from 18cents/gallon to 30 cents/gallon Second is a 125% increase in the diesel tax from 16 cents per gallon to 36 cents. Diesel cars have better gas mileage than internal combustion cars, but it’s for the environment. The auto registration fee will increase between $25 and $175, depending on its value. The taxes and fees will be indexed to inflation! Hence, automatic increases are programmed into the infinite future without the legislature having to vote on them. California imposes the sales tax on gas purchases in addition to the excise tax. The act increases the sales tax on diesel 4% from 5.75% to 9.75%. Don’t rush to purchase a hybrid or pure electric car. They don’t pay gas taxes so he’s imposing an annual registration fee of $100 on them. Remember, it’s for the environment! California has raised the gas tax in the past. The purpose of the tax is to pay to maintain and build our roads and highways. The legislature has diverted funds in the past to the general budget from the gas tax. But not this time, as Lucy kept saying to Charlie Brown as she pulled the football out. Not this time, the Governor said as the legislature will place on the ballot a state constitutional amendment that will prohibit transfers except for transportation. Therein lies the rub – the definition of “transportation.” The taxes are expected to raise $52-54 billion over a decade. $7.5 billion is scheduled to go to mass transit, the mantra of Governor Brown. Another $1 billion is earmarked for pedestrians and bike lanes. Los Angeles, the city built on the car culture, is taking some of its busiest, most congested streets, such as Sunset Boulevard, Van Nuys Boulevard, and Martin Luther King, Jr. Boulevard, and carving bus and bicycle lanes out of them. It’s for the environment – not for drivers. State Senator Scott Weiner of San Francisco says mass transit needs even more. The tax proponents lost a Democratic Senator from Orinda. They had to get a Republican vote. The cost was high. Senator Anthony Cannella pf Ceres agreed, but for $500 million. $400 million will go to extending a commuter railroad from San Jose to Merced. Another $100 million is to build a parkway from the UC Merced campus to Highway 99. Another $427 million went to two legislative districts held by vulnerable Democrats in Riverside County. The proponents silenced truckers by including provisions to exempt them from future regulations on greenhouse gas emissions from commercial trucks. It’s for the environment. The tax increases are incredibly regressive, hitting the poor in the state, especially in the Central Valley and the Inland Empire. One can survive without a car in San Francisco, but not in most of the state. It is a tremendous increase in the cost of transportation in California. Farmers and truckers will feel it. Don’t worry though. The Democrats will blame the greedy oil companies next time gas prices spike up. The last governor to raise the vehicle registration fee was Gray Davis. The voters recalled him. Jerry Brown will not be recalled, but some of the legislators may be. The Democrats will keep raising taxes as long as he California voters let them.