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

Gov. Brown’s May Revise Shows No Need for Gas Tax Increase

The first takeaway from Gov. Jerry Brown’s May Revision of his budget for 2018-19 is that California didn’t need that $5.5 billion yearly gas-tax increase the Legislature passed last year. The proposal shows we have $8 billion in revenues in excess of projections.

In one area I persistently agree with Gov. Brown, “Despite strong fiscal health in the short term, the risks to the long-term health of the state budget continue to mount.” Unfortunately, according to the governor’s budget revision, we have $291 billion in long-term costs and the Legislature has done little to fix the state’s fundamental problems.

In his budget announcement and press conference, Brown emphasized the volatility of tax revenues, especially capital gains-tax revenues, shown in this chart:

moorlach-graphic

And he emphasized we’re overdue for a recession. Of course, he didn’t mention it has been President Trump’s economic policies – tax cuts and regulation reform – that have lifted the national economy above the sub-par performance of the Obama administration.

“How you ride the tiger is what we now face,” he said. “It’s going up, but when it goes down, a lot of these programs will be cut. Life is very giddy at the peaks.” No doubt, he is right. But he also ignored most of the reasons for this volatility even as he pointed out the Rainy Day fund will be filled at $13 billion, though he estimated that an impending economic storm would require resources closer to $60 billion. That’s a budget hole expected in the next recession, which could be $30 billion a year for two years. In such a scenario, the Rainy Day Fund would provide just 22 percent of that potential revenue shortage.

I see a much bigger danger. Taxes are so high in this state. To survive the next recession, companies will flee to states with much lower taxes. Because of the state’s punishing taxes, including then-Gov. Arnold Schwarzenegger’s $13 billion tax increase in 2009, our state’s economy crashed hard. Unemployment soared to double-digits and was exceeded only by the rates in Michigan and Nevada. It may happen again.

The period of rising revenues we’re now enjoying should be used to reduce our already committed liabilities and the overall tax burden.

Of course, having increased taxes last year – not just the gas tax, but the cap-and-trade tax Brown pushed through, estimated at $2.2 billion a year – Brown wasn’t about to suggest cutting taxes. It will be up to the voters to repeal the gas tax this November.

Given that the rising tax revenues won’t be returned to the taxpayers who worked so hard to earn them, the governor at least is proposing spending the money on some true needs. I have worked up a list of options, below, of 15 one-time spending recommendations that should be prioritized. But first let me recognize three of Brown’s proposals that have some overlap to my suggestions:

  • $2 billion for infrastructure: “The proposal will target these funds to the universities, courts, state facilities and flood control. Investments are also proposed for high-priority capital expenditures.”
  • $359 million for homelessness. His proposal notes more funding will begin to flow “from a bond and a fee on real estate transactions” passed last year – another tax that I opposed and don’t believe we need. This money would be a “bridge” until these funds are spent.
  • $312 million for mental health “for enhanced early detection of mental health problems and the education of mental health professionals.” The budget proposal also would put the $2 billion “No Place Like Home” initiative funding on the ballot “to accelerate the delivery of housing projects to serve the mentally ill.”

My proposals include prefunding the $2 billion for No Place Like Home, which will be paid back with the bond proceeds.

I’d also like to help out cities and counties with their pensions by injecting several billion dollars directed to their unfunded liabilities in lieu of taxpayer rebates. In his press conference, Brown unfortunately answered, when that question was raised, “A lot of cities signed up for pensions they can’t afford. The state can’t step into the shoes of the cities and counties. They’re going to have to handle that.”

Again, he’s largely right. And he’s actually putting his legal resources and political chits behind the overturning of the so-called “California Rule,” which ratchets up pension costs with no ability for governments to correct costs at the front end, leading them to fiscal ruin at the back end.

Because of that, we’ve got cities and counties laying off police and fire simply because their pension costs are so high. And the cities and counties can’t raise their tax base more than 2 cents on the sales tax. Current leaders in our cities and counties weren’t the ones who spiked pensions decades ago, but the California Legislature made it really easy.

Sacramento is renowned for taking funds from cities and counties during recessions. Giving something back to them would be a noble thing to do.

The state also has a backlog of rape kits. Not only is that unfair to the victims, but after catching the Golden State Killer, how many more predators could we catch and prosecute?

We also need to harden power lines across the state. If this state wants to emphasize electric cars, we’re going to be sending a whole lot more electricity around, which means more wildfires unless the power lines are put underground.

Compared to his January proposal, the governor’s May Revise only tinkered with education funding. But we could use more funding for career technical education. A lot of kids don’t want to go to college, but could have successful careers in the trades or other vocations. They should be afforded the training opportunities just as much as those we send to our elite institutions.

Finally, this budget largely is a stopgap getting the governor beyond his tenure in office. He said he wanted to leave it in good shape for his successor. But so much more needs to be done, especially in improving the state’s harsh anti-business fiscal policies, shoring up pensions, fixing long-neglected infrastructure and reducing the housing and homelessness crises.

Below is a list of my 15 policy proposals for spending the $8 billion in excess revenues. It is largely in priority order. And if the state wins the litigation for the No Place Like Home bond dollars, or it is approved by the voters on the ballot in November, then that money could be cycled into any of the remaining priorities.

Priority Description Amount
1 No Place Like Home Prefunding of approved bonding $2,000,000,000
2 Provide funding to 482 cities to be appropriated to their pension liabilities $482,000,000
3 Provide funding to 58 counties to be appropriated to their pension liabilities $580,000,000
4 Provide matching funds for city pension liabilities $964,000,000
5 Provide matching funds for county pension liabilities $1,160,000,000
6 Fully fund bringing current the Rape Kit testing backlog $12,500,000
7 Fund Armed Prohibited Persons System (APPS) gun holder backlog $12,500,000
8 Hardening of electric power lines around state $1,168,000,000
9 Oroville Dam state water project conveyance levee repairs $100,000,000
10 Temperance Flat construction $250,000,000
11 Refund the Fire Tax $471,000,000
12 Continue Career Technical Education Funding at prior level $200,000,000
13 Renters’ Tax Credit increase $300,000,000
14 Opioid treatment and prevention task force $100,000,000
15 Water Tax off-set $200,000,000
$8,000,000,000

This article was originally published by the Flash Report

John Cox agrees Travis Allen is the Leader California Needs

Assemblyman Travis Allen, R-Huntington Beach, addresses the breakfast meeting of the Los Alamitos Chamber on Friday August 4, 2017. Allen will be running for governor and is leading an initiative drive to put a measure on the ballot repealing the road improvement/gas tax measure recently approved by the Legislature. He is speaking at Griffins Grill in Los Alamitos. (Photo by Karen Tapia, Contributing Photographer)

In the race for California Governor one thing has been clear, Travis Allen is the leader that John Cox follows. On every major issue, Travis Allen has lead the way and John Cox has reluctantly followed.

Trump:

On May 4th, 2016 Travis Allen wrote an op-ed in the Orange County Register calling on Republicans to unify behind Donald Trump.

For months, John Cox refused to say who he was going to vote for. After the election, he finally admitted that he opposed Donald Trump and voted for Libertarian Gary Johnson. Finally, in January of 2018, a year and half after Travis Allen urged Republicans to support Donald Trump, John Cox finally came around to supporting Donald Trump.

Border Wall:

Far before he was running for Governor, Allen has been clear in his support for securing the border and building a border wall. Including in his OC Register op-ed urging Republicans to support Donald Trump.

On the other hand, when speaking with Univision on January 13, 2017, John Cox opposed building a border wall. Just 17 days later, he once again decided to follow Travis Allen’s position and tweeted out that he supports the border wall.

Gas Tax:

On May 4, 2017, Travis Allen introduced the first statewide measure to repeal the gas tax. He signed up thousands of volunteers and traveled the state building the movement to repeal the gas tax.

Six months later, on October 18, 2017, John Cox made a donation to help gather signatures to repeal the gas tax and called himself a leader on the issue.

Sanctuary State:

On January 2, 2018, Travis Allen was the first to call on Jeff Sessions and the US Department of Justice to sue California, and stop the unconstitutional sanctuary state law.

A day later, John Cox announces that he too is going to go on Fox News to oppose Sanctuary State.

Reject SB 54:

On March 22, 2018 Travis Allen started a statewide opt-out movement calling on cities and counties to reject the Sanctuary State law.

Two weeks later, on April 3, 2018 John Cox holds a press conference calling cities and counties to reject SB 54.

In June, we know what we will get with Travis Allen, a leader that is not afraid to take a stand on the major issues facing California. With John Cox, we will get a follower and who knows who he will be following.

The missing billions spent on gasoline in California each year

California drivers already pay more for gasoline than motorists in just about every other state.

But even after taking into account state gas taxes, blending requirements aimed at reducing air pollution and other environmental and climate fees attached to each gallon of fuel, it appears drivers in the Golden State pay a lot more than they should.

UC Berkeley professor Severin Borenstein calls the price differential “California’s mystery gasoline surcharge” that roughly translates into a premium of 20 to 30 cents on every gallon pumped in the state.

And that’s not chump change when one considers Californians consume 40 million gallons a day. Multiply that over an entire year and Borenstein says that comes to between $3 billion to $4 billion that is unaccounted. …

Click here to read the full article from the San Diego Union-Tribune

Gas Tax Repeal Has 3/4 of Signatures Needed — with 30 Days to Go

An effort to repeal California’s new gas tax repeal has collected three quarters of the required signatures, and has 30 days to gather the last 200,000 to place an initiative on the November ballot.

The Reject The Gas Tax referendum, sponsored by the Howard Jarvis Taxpayers Association, has received substantial bipartisan voter support towards gathering the 587,407 California signatures from valid registered voters that are legally required to place an initiative on the ballot.

California’s Democrat-controlled legislature claimed that “The Road Repair and Accountability Act” of 2017 (SB-1), which they passed almost a year ago, would provide $5 billion per year to address significant funding shortfalls to maintain the state’s multimodal transportation network as the “backbone of the economy and critical to quality of life.”

But advocates of the gas tax were silent on how the regressive measure would hammer middle-income and lower-income families. The average California family of four is now paying about $300 more per year in gas taxes and fees and will pay about $400 more in 2019, along with an additional $50 in gas taxes for each year thereafter.

Progressives understand that after California Gov. Grey Davis increased car registration fees in 2003 by a similar $263 per year, voters retaliated by recalling the Democrat governor and sweeping Republican Arnold Schwarzenegger into office. …

Click here to read the full article from Breitbart.com/California 

The Board of Equalization got the last laugh on a gas tax increase

Gas-Pump-blue-generic+flippedIn a normal universe, the rejection of a gas tax increase by a state agency would be based primarily on policy grounds. But in a strange mix of wonkish tax policy, political turf fighting and revenge, California drivers will be spared — temporarily — from a 4 cent per gallon tax increase on gasoline.

On Feb. 27, the Board of Equalization was expected to approve a routine request by the governor’s Department of Finance to raise the tax. But it did not. As a result, the state treasury will miss out on a little more than $600 million (much to the relief of California drivers, however).

Because California already has one of the highest gas taxes in the nation, citizens may not care one bit about why the Board of Equalization rejected the tax increase. But understanding how this happened is an object lesson in the strangeness that is California.

It begins with the “gas tax swap.”

In 2010, Gov. Arnold Schwarzenegger signed into law two fuel tax measures commonly referred to as the gas tax swap, which adjusted the rates of the sales and excise tax on gasoline. (The excise tax is a “gallonage” tax based on the amount of gas purchased). The fuel tax swap legislation was designed to be “revenue neutral,” meaning the total taxes paid at the pump would not increase because of the change in the law.

But ensuring that the gas tax swap was actually revenue neutral required some backward-looking calculations, because the price of gasoline can greatly fluctuate. In short, the state had to determine how much sales taxes would have been collected had the law not been changed and then adjust the excise tax in an attempt to even things out. Yes, it’s weird, and the reason they did this is beyond the scope of this column.

For the last several years, the Board of Equalization was tasked with making that annual adjustment after receiving a recommendation from the California Department of Finance. That annual adjustment has always been viewed as routine and non-controversial.

All that changed last year because of two notable events: First, a massive increase in the gas tax and, second, a turf battle between the legislature and the Board of Equalization.

When the legislature enacted the infamous Senate Bill 1 raising the gas tax to a stratospheric level, which taxpayers are now trying to undo with an initiative measure, it also took away the Board of Equalization’s authority to make the annual adjustment. The adjustment that was to occur last month was to be the last exercise of that authority by the board.

In the meantime, progressives in the legislature were increasing their criticism of the Board of Equalization which they viewed as being a bit too sympathetic to taxpayers. (The Board of Equalization is the only popularly elected tax board in the nation and would actually give taxpayers a fair hearing when there are disputes over tax liability of individuals and businesses.)

In recent years, the Board of Equalization has endured a few minor (by Sacramento standards) scandals involving office space and political activity. The Legislature then saw these issues as an opportunity to pounce and deprive the Board of Equalization of the bulk of its authority, shifting much of its responsibilities to a new bureaucracy-driven California Department of Tax and Fee Administration that has no direct political accountability.

It is with that background that members of the Board of Equalization, including one Democrat, refused to adjust upward the gas excise tax, an otherwise ministerial act. And although the members who spoke against the increase cast their positions as looking out for California taxpayers, no one who has observed the Board of Equalization over several years missed the real message being delivered to the Legislature. The board’s decision leaves the fuel excise tax at 29 cents per gallon, instead of 33 cents, for another year unless the legislature finds a clever way to bypass the process.

When one considers all the machinations of politics and the manner in which legislation is enacted, it’s no wonder people refer to the California Legislature as a sausage factory. Actually, that’s an insult to sausage factories.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register

Tax agency rejects 4-cent gas tax increase

Gov. Jerry Brown’s office has to find another $617 million for his next budget because a tax-collecting agency he gutted last year has used some of its waning authority to reject a 4-cent increase in fuel taxes.

Normally, the Board of Equalization’s annual requirement to set fuel tax rates is almost automatic. It has tweaked recommendations, but it has not rejected them.

This time, two Board of Equalization members said they did not want to hike fuel taxes so soon after the Legislature’s adoption of a separate 12-cent per gallon gas tax that took effect in November.

“I’ve never voted for a tax increase on gasoline for my constituents. It hurts them,” said board member Diane Harkey, a Republican who is running for Congress. …

Click here to read the full article from the Sacramento Bee

Ten Questions for Jerry Brown

SACRAMENTO, CA - OCTOBER 27: California Governor Jerry Brown announces his public employee pension reform plan October 27, 2011 at the State Capitol in Sacramento, California. Gov. Brown proposed 12 major reforms for state and local pension systems that he claims would end abuses and reduce taypayer costs by billions of dollars. (Photo by Max Whittaker/Getty Images)

Tomorrow, Jerry Brown will deliver his 15th and final State of the State Address. It’s too bad California legislators can’t ask questions like our counterparts in the United Kingdom, who query their head of government during “Prime Minister’s Questions.” If we could, here are 10 questions I’d ask Governor Brown:

1.)     You recently chided Congress, “It’s never good to have one party vote one way, and the other party vote 100 percent the other way. That’s dividing America at a time when we need unity.” Does this mean you’ll no longer sign legislation that is supported by only one party in the Assembly, as you did with the Gas Tax and 20 other bills last year?

2.)     For children living in poverty, California is the worst place in America to get an education, ranking near the bottom for every academic performance measure. Your education plan has added almost $30 billion in yearly spending, yet our schools have if anything gotten worse at educating poor children. How do you explain this?

3.)     Shortly after taking office, you called reforming the much-abused California Environmental Quality Act “the Lord’s work.” Yet no CEQA reform has happened during your tenure even as the cost of housing has soared to the point that 1 out of 3 Californians is “seriously considering” leaving the state because of it. With less than one year left in your term, when is the Lord’s work going to begin?

4.)     While campaigning for Governor, you promised you would not raise taxes without voter approval. Yet last year you signed a $52 billion tax increase without giving voters a say – and now, you’re opposing an effort by voters to undo that tax hike. How should ordinary Californians respond when elected officials break their promises?

5.)     In California, the cost of building a mile of road is triple what it is in other states. One reason, according to the nonpartisan Legislative Analyst, is that Caltrans is overstaffed by 3,500 positions. Yet you are proposing 400 new positions in this year’s budget. Why not learn from other states that build better and cheaper roads before making Californians pay higher taxes?

6.)     Under your watch, California’s unfunded pension liability has grown by over 100 billion, with public employees generally receiving greater benefits than workers in the private sector. You clearly recognize this as a problem, having just filed a commendable opening brief in what could be a landmark state supreme court case. So why did you allow this problem, which threatens vital services and future generations, to get so much worse?

7.)     You claim California is prosperous because it is the world’s “6th largest economy.” Yet adjusting for cost of living and population size, our economy actually ranks 37 out of 50 states in the country. Which statistic do you think more accurately reflects the well-being of ordinary Californians?

8.)     Since you became Governor, the State Budget has grown from $129 billion to $191 billion. What evidence can you point to that this new spending has improved the quality of life for ordinary Californians? Feel free to cite, for example, health outcomes, student achievement, housing affordability, infrastructure quality, workforce participation, poverty rates, family stability, or any other metric.

9.)     The projected cost of High Speed Rail now exceeds $67 billion, with new delays and cost overruns reported almost monthly. And many are doubting the bullet train will have any useful purpose. In the words of Elon Musk, “The train in question would be both slower, more expensive to operate and less safe by two orders of magnitude than flying, so why would anyone use it?” Why would anyone?

10.)     You recently accused others of “ripping the country apart” through partisan actions. Yet in the last few months you’ve called your political opponents “mafia thugs,” “political terrorists,” and “evil in the extreme.” Is this rhetoric bringing the country together?

Assemblyman Kevin Kiley represents the 6th Assembly District, which includes parts of El Dorado, Placer, and Sacramento counties.

This blog post was originally published by Fox and Hounds Daily

Signatures for recall of Sen. Newman certified, election expected in June

Signatures calling for the Republican-backed recall election of state Sen. Josh Newman, D-Fullerton, were certified on Friday by Secretary of State Alex Padilla, making it official that the effort has qualified for the ballot.

The date of the election will be determined by Gov. Jerry Brown, with many expecting it to coincide with June 5 primary. Democratic lawmakers tweaked state law last year to expand the time frame when such elections could be held. Beside the cost savings of running the elections together, the June 5 date would sidestep a freestanding special election in which Republicans typically turn out in greater proportions than Democrats.

The GOP targeted Newman after he voted to increase the gas tax by 12-cents-per gallon to pay for a 10-year, $52 billion roads and transportation improvement project championed by Brown, who has vowed to provide Newman with the help he needs to fend off the recall.

The freshman senator was singled out because he was considered the most vulnerable to being beaten by a Republican. His 2016 election gave Democrats a two-thirds supermajority that allowed them to raise taxes without a single GOP vote. …

Click here to read the full article from the Orange County Register