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.

How to Replace the Gas Tax Law if its Repealed

gas prices 2Before the SB1 gas tax, fuel prices in California were already among the highest in the country with State excise taxes at the pump, and State sales tax at the pump, being among the highest in the country. With Californians also bearing the costs associated with compliance with various State environmental regulation laws, Californian’s are paying as much as $1 more per gallon than most folks in the country as all those costs trickle down to the consumer and are hidden within the posted price of fuel at the pump.

In November 2017, as a result of the SB1 gas tax that was passed by our legislature, but never approved by the voters, California’s base excise tax on gasoline went up 12 cents, increasing the total to 30 cents a gallon. Also, the diesel excise tax rose 20 cents, increasing it to 36 cents a gallon, with even more upward adjustments for inflation starting in 2020. The legislative bill SB1 for transportation Infrastructure funding has been projected to raise $52 billion over the next 10 years for infrastructure projects, and the recently passed Proposition 69 now protects the SB1 taxes just for infrastructure.

With the expected successful repeal of the SB1 gas tax in November, the real carrot will be next – a new initiative to REPLACE SB1. That next bill will designate that all current State excise taxes on fuels at the pumps, State sales tax on fuels at the pumps, and new car sales taxes, MUST all go to infrastructure, with NONE going to the general fund.

Fuels consumption for California’s 35 million registered vehicles in 2016, of which more than 90% were not Electric Vehicles (EV’s), was 42 million gallons per DAY of gasoline and 10 million gallons per DAY of diesel.  A total of 52 million gallons of fuel daily sounds like a lot of fuel, but it’s only about 1 plus gallons per day per vehicle, resulting in refueling requirements every week or two.

The California Energy Commission shows that California fuel consumption is at the highest level since 2007. The good news is that drivers’ are now using less fuel than they’ve used in the past, but the bad news is that new car sales have been in excess of 2 million per year over the last 3 years, that have been netting MORE vehicles each year onto existing roads to join the 35.3 million registered vehicles we had in 2016. New car sales for 2018 are projected to also exceed 2 million which will also net more registered vehicles.

Key features of the next new initiative, a REPLACEMENT bill that will add NO new transportation taxes at the pumps, to a repealed SB1, would be:

  • 100% Lock Box on Existing Gas Excise Taxes: The measure would dedicate 100% of the State excise and sales taxes on fuel at the pump, to road maintenance and improvement contracts (no staffing costs, it has to be actual concrete and asphalt!) Roads must be the only use for gas tax funds.
  • New Car Sales Tax: The measure would dedicate 100% of the existing sales tax on the purchase of new cars to regional infrastructure maintenance and expansion. Interestingly, State sales taxes on new car sales, which have been in excess of 2 million per year, has generated more than $20 billion of revenue for the State per year.
  • Efficiency Reforms: The measure would enact competitive bidding versus the current CALTRANS bureaucratic monopoly they now have on all projects, and other efficiency reforms to ensure that infrastructure funds are properly spent.

Voters never had a chance to vote on the SB1 tax, but voters will get a chance to vote on the replacement bill, The Road Repair Accountability Initiative –in a future election, once the gas tax hike is repealed this November. The replacement bill will provide more dedicated dollars for infrastructure per year, and every year thereafter, without any new fuel taxes at the pumps.

ounder of PTS Staffing Solutions, a technical staffing agency headquartered in Irvine

This article was originally published by Fox and Hounds Daily

Gas Tax Repeal is Now Officially on the November Ballot

Gas TaxSetting the stage for a major statewide battle over how to pay for an estimated $67 billion backlog in highway, bridge and road repairs, a ballot measure to repeal California’s recently enacted gas taxes and registration fees officially qualified Monday for the November ballot.

Already, Gov. Jerry Brown and a powerful coalition of chambers of commerce, law enforcement, unions, firefighters, local transportation agencies and cities and counties have vowed to fight it.

“I will do everything in my power to defeat any repeal effort,” Brown said in a statement shortly after the Secretary of State’s Office announced the effort had qualified for the ballot. “You can count on that.”

John Cox, the Republican candidate for governor, didn’t waste any time, either, to voice his support for the repeal. …

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

The Outrageous Tactics Used to Keep the California Gas Tax

Gas PricesA few weeks ago this column addressed the issue of polling and how it can be manipulated and, even when it is not manipulated, how wrong it can be.  Still, candidates, consultants and the media do a lot of polling to test the viability of whatever it is they support or oppose.

Sen. Josh Newman’s recall election was a bitter fight. While polling suggested he was in trouble, those supporting the recall were well aware that polls can be wrong. But even recall proponents were surprised that the recall would prevail by a 59-41 percent margin. That wasn’t just a loss for Newman. It was a trouncing.

This past week, in his political swan song, Newman vented against the recall effort on the floor of Senate.  Incredibly, Newman stated, “I can’t imagine wanting to win so badly that I would ever do, in the pursuit of partisan advantage, what has been done here.”  In light of how Democrats skewed the political process during the recall effort, Newman’s complaint is laughable. Let’s review.

Not once, but twice, Democrats jammed through new laws changing the recall process specifically for the purpose of throwing Newman a political lifeline.  These were enacted as so-called “trailer bills,” last-minute, supposedly budget-related bills that are passed without any public hearings.  These were designed to delay what otherwise would have been a special election for the recall last November or December, a ploy that succeeded in delaying the issue to June.  Because the purpose of the 100-year-old right to recall is to get a rapid resolution of whether a politician should continue in office, the claim that the new laws were “improving” the process was ridiculous.

Then, adding insult to injury, the ostensibly neutral Fair Political Practices Commission adopted a new rule allowing Newman unlimited campaign contributions from his fellow Democratic senators.  This despite the fact that they denied this right to a Republican senator just a few short years ago.

For Newman to upbraid Republicans on the floor of the California Senate for failing to defend him suggests that he has totally forgotten the Banana Republic tactics that were deployed to save his political career. It also demonstrates how disconnected he was from his constituents, who really were angry over his vote to ensure that California had the highest gas and car taxes in the nation.  His political tone deafness was further revealed by more anti-taxpayer votes for single-payer healthcare, a recording tax to fund housing and a vote for cap-and-trade. …

Click here to read the full article from Pasadena Star News

Majority of California voters want to repeal gas tax increase, poll finds

Gas PricesAs a new poll found a majority of California voters want to repeal increases to the state’s gas tax and vehicle fees, Gov. Jerry Brown has begun campaigning to preserve them, arguing the sacrifice is needed to fix long-neglected roads and bridges and improve mass transit.

Repeal of the higher taxes and fees was supported by 51% of registered voters in the state, according to a new USC Dornsife/Los Angeles Times statewide poll.

The survey found 38% of registered voters supported keeping the higher taxes, 9% hadn’t heard enough to say either way and 2% said they wouldn’t vote on the measure.

The results bode well for a measure that Republican members of Congress hope to place on the November statewide ballot that could boost turnout of GOP voters by offering the chance to repeal the gas tax increase, said Bob Shrum, director of the Jesse M. Unruh Institute of Politics at USC. …

Click here to read the full article from the Los Angeles Times