California Taxpayers Give Thanks But Worry About the Future

taxesIn this season of Thanksgiving, taxpayers in California have reason to pause when asked for what they are thankful. Considering the costly plans of the newly elected Legislature and governor, taxpayers may be most grateful for the fact that the state hasn’t yet built a wall encircling the state to keep them from leaving.

After 2017, when lawmakers enacted new taxes including a $5.2 billion annual tax hike on gasoline, diesel and vehicle registration, as well as a new tax on recorded documents, 2018 saw every effort by the Legislature to increase taxes defeated by advocates for taxpayers.

We are grateful that the first-ever tax on drinking water was defeated.

We are grateful that the tax on fireworks was defeated, and that the effort to revive the “snack tax” was not successful.

We are grateful that the proposal to put a sales tax on services was shelved.

We are grateful that nearly a million voters signed petitions to repeal the gas and car tax. Of course, the bad news is that the gas tax repeal was given a new title by Attorney General Xavier Becerra that removed the words “gas tax repeal” from the ballot, deceiving voters.

To read the entire column, please click here.

Rejection of Proposition 6 Doesn’t End the Taxpayer Revolt

Gas PricesIt is understandable that many California taxpayers are disappointed with the election results. The defeat of Proposition 6 means that last year’s big increases in both the car tax and the gas tax imposed on us by Sacramento politicians will remain in effect and California’s drivers are stuck having the second-highest gas tax in the nation.

Tax-and-spend progressives are interpreting the defeat of Prop. 6 as a green light to impose even higher taxes. In fact, some now believe that the iconic Proposition 13 itself may be vulnerable. But this thinking is faulty.

There are three major reasons why Proposition 6 failed and none of them are because voters were enamored with the Senate Bill 1 tax hike last year. First, the ballot label – which may have been the only thing low-information voters saw – made no reference to the tax hike passed by the legislature last year. Rather, it ominously stated that the initiative would “eliminate certain transportation funding.” This non-specific description ignores that, had Prop. 6 passed, California would still have the fifth-highest gas tax in the nation. In providing a blatantly misleading ballot title, Attorney General Xavier Becerra did the opponents a huge favor.

Second, the financial power of the “rent seekers” — those interests which secure financial advantage through higher taxes on the general public – was on full display during this campaign. Big business, including large construction companies, teamed with big labor to contribute well over $50 million in campaign funds. A one-time $50 million investment for $5 billion in tax proceeds every year is a heck of a good return on investment. Moreover, this amount of money dwarfed the approximately $5 million raised by the proponents. With that kind of spending disparity, the disinformation spewed out by the opponents could not be challenged effectively, particularly in major media markets.

Third, opponents engaged in repeated acts of questionable and even illegal behavior. Beyond just the over-the-top threats of collapsing bridges if Prop. 6 passed, there was the well-publicized use of Caltrans-supervised work crews to stop traffic and hand out campaign fliers urging a no vote on Proposition 6. And the full integration of Caltrans management with opposition campaign operatives was an example of real, not fake, collusion. While legal actions are pending on this kind of activity, it is of little solace to California drivers who are being punished every time they pull up to the pump or write a check to the DMV. …

To read the entire column, please click here.

California Voters Decide to Keep Democrats’ Gas Tax Increase

Gas-Pump-blue-generic+flippedAmong numerous measures that went before the state’s voters Tuesday, Californians rejected a proposal to repeal a gasoline tax increase that was passed by the Legislature to fund road and transportation projects. Proposition 6 failed Tuesday after Democrats campaigned to preserve $5 billion a year to fix roads and improve transit.

The state’s Republicans sought to repeal hikes in fuel taxes and vehicle fees that are expected to fund $52 billion in transportation projects over a decade. Their plan also would have required voter approval for future gas tax hikes.

GOP lawmakers argued that California has grown too expensive and tax dollars need to be spent more wisely. They hoped the measure would help drive Republican voter turnout in contested state and congressional races.

“It’s about whether working families will be given some breathing room and whether we can address the high cost of living in California,” Carl DeMaio, a former San Diego city councilman who led the effort, told the Mercury News. “That’s real money.”

Democrats and construction industry and union leaders maintained the revenues are vital to upgrade California’s crumbling roads and bridges. …

Click here to read the full article from Fox News

How California’s Gas Tax Compares With Other States

gas prices 2The lies by opponents of Proposition 6 — the measure to repeal the LATEST GAS AND DIESEL TAX INCREASES — are breathtaking. Many people believe opponents when they falsely claim that — if Prop 6 passes — there will be essentially no funding for roads and bridges.  No one — even proponents of Prop 6 — are adequately presenting the actual numbers. Especially the numbers compared to the other states.

Let me help:

In California, we now pay about 56 cents a gallon in state “gas pump” taxes — our state excise tax and sales tax. This figure is scheduled to rise dramatically (and automatically) in future years, but let’s put that fact aside for this comparison.

In addition, we pay the hidden CA “cap and trade” tax.  It’s estimated by the CA Legislative Analyst’s Office at 10 to 12 cents a gallon. Using 10 cents, that brings our total CA state gas taxes to 66 cents a gallon — easily the highest total gas tax in the nation.

Prop 6 will reduce that CA gas tax figure 12 cents a gallon (the recent tax increase amount).  That means that California will still be collecting about 54 cents a gallon — a decrease of 22%.  That reduction does NOT eliminate funding for roads and bridges.  Not hardly!

But here’s the thing that no one talks about:  Even AFTER Prop 6 is passed, California will STILL be collecting the SECOND HIGHEST TOTAL GAS TAXES IN THE NATION!  Only Pennsylvania will be higher.  Most states are much lower.
https://www.api.org/oil-and-natural-gas/consumer-information/motor-fuel-taxes/gasoline-tax

How can the other states build their roads and bridges with far less tax money than California?  In addition to being much more efficient in their spending, these states usually don’t divert their gas taxes for bike lanes (which INCREASE congestion), hiking trails, beautification projects, parks, mass transit (especially wildly expensive commuter rail) and other non-road expenditures favored by California politicians.

Here’s another surprise. Included in our gas price is funding for the infamous California HIGH SPEED RAIL — which is now to be largely paid for with cap and trade taxes. Don’t believe opponents when they claim you are not paying for HSR at the pump — you most certainly ARE.

And what about diesel?  Compared to the other states, our total CA diesel taxes are even higher than gasoline. We are now almost DOUBLE the national average diesel tax — NOT COUNTING the hidden CA cap and trade tax.

We all pay those diesel taxes in every tangible product we buy.  For businesses, transportation costs are a “pass through” expense that is paid by their customers in the form of higher prices.

In short — we do NOT have a California gas and diesel tax REVENUE problem.  Instead we have a HUGE California SPENDING PRIORITY problem.  State politicians have been holding our road system hostage — using it to raise our taxes over and over — mostly for other projects.

As the droll P.J. O’Rourke commented, Giving money and power to government is like giving whiskey and car keys to teenage boys.”  It’s up to us voters to provide the adult supervision so sadly lacking in Sacramento.

Force politicians to do what we do — prioritize spending.  Use the “road tax” for roads!

This article was originally published by the Flash Report

Emails show California transportation agency’s cozy ties to gas tax backers

Gas TaxSACRAMENTO — As the political battle to overturn California’s gas tax increase intensified, the state transportation agency coordinated frequently with the public affairs firm working to block the repeal on behalf of unions, construction companies and local government groups, emails obtained by The Associated Press show.

The California State Transportation Agency and Sacramento-based Bicker, Castillo & Fairbanks organized news conferences and other efforts to promote legislation to raise the tax to fund road and bridge repairs, which passed the Legislature in April 2017. After Gov. Jerry Brown signed it, the agency and firm continued planning events and coordinating social media posts as opponents gathered signatures for repeal.

Three ethics experts interviewed by the AP said the emails raise concerns that the agency’s relationship with the firm was too close, but none saw a clear violation of campaign laws, which prohibit the use of public resources for political campaigns. …

Click here to read the full article from the San Jose Mercury News

Prop. 6 – Gas Tax Repeal – is a grassroots initiative

Gas PricesProposition 6 is an initiative measure appearing on the ballot less than one month from now that would repeal the tax hike on gasoline and cars imposed by Sacramento politicians last year without a vote of the people. If Prop. 6 passes, California’s gas and car tax would still be in the top five among all 50 states.

Supporters of Prop. 6, those advocating for the repeal of the tax hikes, have focused their campaign on several compelling points including California’s overall tax burden (highest income tax rate and state sales tax rate in the nation) and California’s high cost of living. Other arguments favoring Prop. 6 include the well-documented waste of taxpayer dollars spent on transportation, the lack of any reforms and a decades-long history of diverting transportation dollars away from roads and highways.

The Yes on Proposition 6 campaign is being advanced by a coalition of grassroots taxpayer organizations and the state’s Republican Party. It has virtually no big corporate support.

The opponents of Proposition 6, those who desire to retain our status as a high-tax state, consist of interests that benefit financially from public construction projects. These include construction companies, labor organizations and local governments who thirst for ever more taxpayer dollars. They have contributed tens of millions of dollars to the opposition campaign for an obvious reason. The millions they invest in a political campaign produce a great return on investment if the payoff is more than $5 billion of new taxpayer spending annually.

It is apparent at this point that the opponents of the gas tax repeal will outspend supporters by a 10-to-1 margin.

But the tactics of the opposition campaign have put it in hot water.

To read the entire column from the Los Angeles Daily News, please click here.

Gas-tax Opponents File Proposal to Kill High-Speed Rail Project

High speed railProponents of Proposition 6, the measure to repeal California’s gas tax hike, filed a new ballot measure Tuesday that would torpedo Gov. Brown’s high-speed rail project and prevent the state from spending gas tax funds on mass transit.

“We’re very pleased with the accountability this measure provides,” said Carl DeMaio, a talk radio host and chairman of the Prop. 6 campaign. He has accused the state’s Democratic establishment of wasting taxpayer money and unfairly burdening motorists — particularly working-class people who have long car commutes.

In addition to killing Brown’s $77 billion plan to send bullet trains zipping from Southern California to downtown San Francisco, the initiative that DeMaio and others submitted on Tuesday would mandate that all gas tax revenue go to roads. It would also dedicate the state’s sales tax on cars to all forms of transportation infrastructure including public transit, require annual audits on road projects and shift decision-making power on gas and car tax revenue from the state Capitol to city and county governments.

Supporters say these changes — which would go on the November ballot in 2020 — would boost California’s annual road coffers from $5.2 billion to $7.5 billion, and increase funding from general transit infrastructure from $1.8 billion to $7.4 billion a year. Opponents call the measure a repackaging of Prop 6, which strikes down the new 12-cent gasoline excise tax, vehicle fees and 20 cents-per-gallon tax on diesel fuel signed into law last year as SB1. …

Click here to read the full article from the San Francisco Chronicle

California’s Cost of Living is Hurting the Middle Class

Middle classThose interests are financing a multi-million-dollar disinformation campaign claiming that the state’s roads and bridges are unsafe because Californians’ taxes were too low.

It would be funny if it wasn’t so expensive.

The reasons that Proposition 6 is so popular — despite the irresponsible and self-serving claims of its opponents – are legion. California already had the fifth-highest gas taxes in the nation, even before the tax hike. Our state income tax rates and state sales tax rate are the nation’s highest. Add to that crushing regulations and counterproductive progressive policies that result in outcomes opposite of that intended and it’s easy to understand why California is suffering from a massive outflow of citizens to other states.

That exodus to Texas, Arizona, Nevada and other states is being driven by a singular powerful force — cost of living. Few Californians are unaware of how expensive it is to live here relative to other states. Despite a rapidly growing national economy, many citizens here still feel left behind, and for good reason. California’s poverty rate is 20.6 percent, the highest in the nation, when the cost of living is taken into account. In a recent poll, 47 percent of Californians considered themselves “working poor.”

In the debate over Proposition 6, opponents understate the impact on the cost of living that results from these tax hikes. A recent study by the California Policy Center exposes just how punishing last year’s tax increases are for middle-class Californians and why they should be repealed.

According to the analysis, the gas tax and car tax hikes will impose on an average two-car family at least $1,500 in taxes a year. When adjusting for the “average” tax rate, a two-car “average” family must earn almost $2,000 in pre-tax earnings just to pay their California car and gas taxes. Obviously, this isn’t chump change.

The news for low-income families is even worse. A typical two-car low-income family may pay $1,800 in taxes a year. Because low-income families are in a lower tax bracket, that two-car low-income family still must earn almost $2,000 in pre-tax earnings just to pay their California car and gas taxes. …

Click here to read the full article from the San Bernardino Sun

Business Not United on Gas Tax Repeal

Gas-Pump-blue-generic+flippedWhile business organizations are largely opposed to Proposition 6, the gas tax repeal measure, opposition to the measure from business is not universal.

Yesterday, the influential California Business Roundtable announced its positions on November’s ballot and Proposition 6 was absent. The California Business Roundtable took a neutral position on SB 1, the gas tax increase bill, so the CBRT board decided not to take a position on Prop 6.

Meanwhile, the National Federation of Independent Business/California has been pushing for the gas tax repeal to pass since July.

The California Chamber of Commerce announced its opposition to the gas tax repeal months ago. CalChamber remains a leader in opposition to the tax repeal measure and it is not alone. The No on 6 website lists more than 50 business related organizations in the opposition coalition including the Bay Area Council, the California Small Business Association and VICA, the Valley Industry and Commerce Association.

Proposition 6 would require that all legislatively passed taxes on fuels and vehicles only become effective after a statewide vote of the people. The measure is written so that the taxes passed by SB 1 would be null and void since they did not get a public vote.

CalChamber’s board opposed the repeal citing the Legislative Analyst’s estimates that $5 billion in annual revenue for state and local transportation projects would disappear. The Chamber argued that repealing the gas tax would:

  • Stop transportation improvement projects already underway in every community in California. This measure would eliminate funds already flowing to every city and county to fix potholes, make safety improvements, ease traffic congestion, upgrade bridges, and improve public transportation. 4,000 local transportation improvement projects are already underway across the state thanks to SB 1.
  • Make traffic congestion worse. California’s freeways and major thoroughfares are among the most congested in the nation, and Californians spend too much time stuck in traffic away from family and work. This measure would stop projects that will reduce traffic congestion.
  • Cost drivers and taxpayers more money in the long run. The average driver spends $739 per year on front end alignments, body damage, shocks, tires and other repairs because of bad roads and bridges. Fixing a road costs eight times more than maintaining it. By delaying or stopping projects, this measure ultimately will increase costs for motorists.
  • Hurt job creation and the state’s economy. Reliable transportation infrastructure is critical to get Californians to work, move goods and services to the market, and support the economy. This measure would eliminate more than 680,000 good-paying jobs and nearly $183 billion in economic growth that will be created fixing California roads over the next decade.

NFIB California State Director John Kabateck sees things differently. “California small businesses and working families are being crushed in this state with rising costs in every aspect of running their business, which is why NFIB was the leading statewide business association opposed to Senate Bill 1 last year, and why we fully support Proposition 6 to repeal these regressive gas and car tax increases on hardworking Californians. Business owners deeply understand the need for a vibrant transportation infrastructure, and they also know Sacramento has mismanaged existing transportation tax revenues for decades which has resulted in abysmal roads across California. However, with a $200+ billion state budget with a $9 billion surplus, clearly higher taxes are not needed—better management of our tax dollars is the answer, and Proposition 6 forces the legislature to be accountable with existing transportation tax dollars.”

While business associations are not all lined up on the same side, as with most things political, money can make a difference. Estimates are the No on 6 campaign could put $40 million or more into defeating Prop 6. The yes side will only have a couple of million at best and is unlikely to buy any statewide television ads to convince voters. The Yes on 6 campaign is counting on voters affected adversely in the pocketbook by the tax increase to ignore opposition ads and vote for the repeal.

While business is not uniform in its Prop 6 position, business dollars could play a decisive role in the outcome.

This article was originally published by Fox and Hounds Daily. 

Opponents of Repealing the Gas Tax Are Getting Desperate

gas prices 2There’s an old saying in business: Build a better a mousetrap, and the world will beat a path to your door.

But not everyone builds their success on creating better products or providing better services. There are some that specialize in manipulating the laws and the government as a strategy for increasing profits.

This has sometimes been called “rent seeking,” in the sense that it might apply to a storybook troll under a bridge, collecting “rent” as if he owned the right of way.

There are trolls under the bridges in California this year, and next to the highways. They are the rent seekers who oppose Proposition 6, the grassroots effort to repeal the massive gas and car tax increases signed into law last year. They are engaging in some of the most questionable campaign tactics ever seen in California. These Prop. 6 opponents are making millions of dollars from the massive infusion of taxpayer cash paid by hardworking Californians who need their cars in their daily lives.

First, let’s cover the basics: Proposition 6 does not repeal the entire gas tax — only that portion that pushed us up to just about the highest in the United States. If Proposition 6 passes, California will still have the 5th highest gas tax in the nation. Opponents of Prop. 6 would have voters believe that this level of taxation can’t even keep our existing roads paved, let alone build new highways.

Second, waste, fraud and abuse in California transportation spending is legendary. The nonpartisan Legislative Analyst’s Office says needless overstaffing at Caltrans is costing taxpayers billions.  For what California is spending on the nation’s biggest boondoggle, high-speed rail, we could easily pave Interstate 5 from San Ysidro to the Oregon border.

Third, if transportation is so important, why can’t we spend some of the state’s $9 billion-dollar surplus for one-time expenditures?  Gov. Brown’s father did that when he was governor.

Bottom line is that this is not about transportation or the need to fix our roads. No one disputes that our roads are in terrible shape. But credible plans to address this critical need without raising taxes can’t even get a hearing in the legislature. Why?

The reason is simple. This is about transferring money — and lots of it — from hardworking California taxpayers to special interests. …

To read the entire column from the Press-Enterprise, please click here.