Legislators Duel Over Impending Gas Tax Hike

Gas-Pump-blue-generic+flippedDemocratic legislators in the state Senate have brought Californians closer to new hikes on the cost of driving their cars. But the committee vote represented little more than a first step in a complex, intense negotiation between Republicans, Democrats and the man trying to stay influential but above the fray — Gov. Jerry Brown.

Republicans have resisted Democrats’ preferred approach, but California’s business lobby has pressed both parties to embrace new taxes and fees. “Last week, business organizations such as the California Chamber of Commerce and the Silicon Valley Leadership Group said any deal should seek to raise at least $6 billion annually by raising gas and diesel taxes and increasing vehicle registration and license fees,” the San Jose Mercury News reported.

Part of the rationale for increasing fees, instead of simply dialing up gas taxes, has centered around the growing popularity of hybrid and electric vehicles in California — and the state’s interest in squeezing revenue out of every car on the road. “We have these Teslas that are being sold and they don’t pay any gas tax,” complained state Sen. Jim Beall, D-San Jose, as CBS Sacramento noted.

Gas in California has remained higher on average than out-of-state, thanks to cap-and-trade fees and the state’s unique environmental rules about the blends of gasoline that must be sold. Current state taxes include an excise tax of 39 cents, between 30 and 42 cents in sales tax, and 10 cents for the cap-and-trade levy, as Watchdog Arena observed.

Brown stays secretive

At a recent news conference that left some observers hungry for detail scratching their heads, Brown refused to hint at a revenue source for the improvements. “I’m not going to say where the revenue’s going to come from, how we’re going to get it,” he said. “We’ll get it done, but I’m not going to put all my cards on the table this morning,” Brown said, according to ABC 7 News.

Brown was joined at the appearance by Assembly Speaker Toni Atkins, D-San Diego, who signaled separately that negotiations would be tough. “It will be a bumpy road, but our constituents expect us to work together and figure something out,” she toldthe San Francisco Chronicle.

To date, the governor has not let slip whether he would support or oppose a tax hike to make up the difference.

Dueling proposals

That raised the possibility that Republicans might get their way, scrounging up revenue from savings and budgetary jujitsu instead of tax increases. But GOP legislators have been keen on siphoning revenue away from California’s cap-and-trade program, which Brown had availed himself of previously in order to fund construction spending on the state’s much-debated high-speed rail project. That has drawn strenuous objections from Sacramento Democrats.

The current proposal advanced by Assembly Republicans “would raise more than $6 billion a year by eliminating thousands of state employees and unfilled positions and reallocating existing state money, both from the budget and from other projects,” the Chronicle noted, while the plan pushed by Beall would raise billions with a suite of increased gas taxes and fees, including an “annual road access charge of $35 a vehicle,” according to the paper.

It was Beall’s bill that cleared its first committee test in the Senate this week, with Democrats besting Republicans in a party line vote.

For now, just a few broad outlines of an agreement have come into focus. According to the Chronicle, both sides reject the option of a “one-time fix, such as a bond measure that would pile more debt on the state. Any money raised must be earmarked only for road and infrastructure repair, and protected against being siphoned into other parts of the state budget.” Plus, legislators agreed that expenditures should be clearly identified and made public, with some kind of oversight and monitoring built into the arrangement.

Originally published by CalWatchdog.com

​Why Higher Taxes for Potholes is a Bad Idea

road_blockTo paraphrase Ronald Reagan, here we go again. Once more, taxpayers are being told by our political elites that, if we want good roads, we have to have higher taxes.

Just a few weeks ago, this column exposed the politicians’ plan to hike gas taxes along with vehicle license fees and registration. This plan, by San Jose lawmaker Jim Beall, would slam taxpayers in three ways. First, it would raise at least $3 billion annually by increasing the gas tax by another 10 cents a gallon. Second, it would hike the vehicle license fee, which is based on value, by more than 50 percent over 5 years. Third, it would increase the cost to register a vehicle by over 80 percent.

The latest scheme is Assembly Constitutional Amendment 4 which would weaken Proposition 13 by eliminating the two-thirds vote for local transportation sales taxes. ACA 4 is a bad idea. California already has the highest state sales tax in the nation. Not only that, but sales taxes are highly regressive, hitting the poor and working middle class the hardest.

It is true that California ranks very low nationally in the condition of its roads and highways. But, in addition to an already high sales tax we also have the highest income tax rate in America and the 4th highest gas tax. (And, by the way, that gas tax doesn’t even include the cost of California’s one of a kind “cap and trade” regulations which substantially increases the cost of every gallon of fuel pumped in California).

The truth is that the sad condition of our highways has nothing to do with the lack of tax dollars and has everything to do with poor management and bad choices in deciding where our transportation dollars are spent. Our taxes are far more likely to be paying for projects we don’t even need — like High Speed Rail — or a bloated Caltrans budget than they are for fixing roads.

There’s another compelling reason why, should it ever make it to the ballot, ACA 4 deserves to be resoundingly defeated.  At least 20 counties in California, including all the large ones, have already passed higher sales taxes with the two-thirds supermajority vote mandated by Prop 13. Billions of dollars have been raised by these so-called “Self-Help Counties” all for transportation purposes. In going to the voters, local officials have to make sure that they propose projects that are truly needed. Lowering the vote threshold will only incentivize waste and the funding of pet projects, not the high priority needs of California motorists.

We believe very strongly that taxpayers shouldn’t have to pay the price for bad decisions made by politicians and bureaucrats. Until our elected leaders direct the vast amount of money already available for highway improvements to those needed projects, we certainly shouldn’t consider even higher taxes and weakening Prop. 13. That’s why HJTA will oppose ACA 4 and we urge all California taxpayers to do the same.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Originally published by the HJTA.org

More Pain at the Pump

Gas-Pump-blue-generic+flippedSacramento is about to launch a new attack in its ongoing war on drivers.

California’s 48.6 cent gas tax already ranks second out of 50 states –- the feds take another 18.4 cents — and when the hidden carbon tax, part of the cap-and-trade program, is factored in, our state leads the pack by a wide margin. But this is not nearly enough, according to the political class.

Sen. Jim Beall is building a coalition of both Democrats and Republicans in the Legislature to hike gas taxes along with vehicle license fees and registration.

The San Jose lawmaker’s Senate Bill 16 slams taxpayers in three ways. First, it would raise at least $3 billion annually by increasing the gas tax by another 10 cents a gallon.  Second, it would hike the vehicle license fee, which is based on value, by more than 50 percent over 5 years. Third, it would increase the cost to register a vehicle by over 80 percent.

Although the backers of the SB16 tax increase say it is vital to make up the claimed $59 billion backlog in roadway maintenance, some of the funds are slated to go to repaying transportation bonds that, when passed, were to be paid from the general fund. This means that not all of the new revenue will go to the stated intent of fixing roads and highways.

Whatever the actual dollar amount of the backlog in roadway maintenance, this shortfall is the result of previous diversions of gas tax and truck weight revenue to budget items that have no direct impact on road improvement, and Beall’s bill would allow this practice to continue.

It should not go unnoticed that the $59 billion estimated backlog approaches the $68 billion that the governor and Legislature want to spend on the bullet train. Quentin Kopp, former chairman of the California High-Speed Rail Authority, has become a strong critic, characterizing it as “low-speed rail” due to the changes that have been made to the original plan that voters were promised to convince them to provide seed money for the project in 2008. He adds that to be financially viable, high-speed trains need to run from 10 to 20 trains per hour, but due to the current plan, called a “blended system,” slower trains and bullet trains must share the same track, reducing the number of fast trains to about four per hour. And even supporters of the project as currently envisioned concede that the Los Angeles to San Francisco trip that voters were told would take about two-hours and forty minutes for a $50 fare, will likely take closer to 5 hours at nearly double the cost to the rider.

So, while Sacramento politicians and special interest insiders, including unions and construction companies, continue to push for billions of dollars of new spending on a high-speed rail system that is not expected to be completed before 2029, they expect drivers, fed up with bumping along on crumbling roads and highways, to pay more.

Gas prices in California are already tops in the nation. If taxes are increased again, every motorist should be given a railroad engineer’s cap compliments of Sacramento lawmakers and the governor because the extra they pay will free up money, which could have been used for roads, to be spent on their pet train.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Originally published by the HJTA.org

Overtaxed Californian’s Want More Services But Not More Gas Taxes

A recent statewide poll by The Field Research Corporation found that voters strongly believe that state and local governments in California should be spending more money to improve roadway conditions, but at the same time the same voters are divided on raising new tax dollars to pay for the improvements.

los-angeles-freeway-helicopter-1In fact, a whopping 76 percent of California voters view California’s existing gasoline tax, which is used in part to pay for new roads and maintenance, as too high already, according to the Field poll.

These voters have good reason to share the view that California’s gas taxes (like its’ income and state sales taxes) are already too high. California’s gas tax per gallon is complicated and involves Federal, state sales and excise taxes. According to George Runner, a member of the state’s Board of Equalization, which administers the tax, California consumers already pay 71 cents per gallon every time they fill up their tanks in taxes, while the average paid in other states is 50 cents per gallon, according to Runner.

Motor vehicle fuel taxes will add close to $5 billion in revenue to state coffer’s in 2015, but the amount of revenue is trending down, as cars become more fuel-efficient and use less gas. Yet even with $5 billion in tax revenues just from the gas tax, largely intended for roads, California still suffers from a vast network of pot-holed roadways in need of repair.

In beautiful Sonoma County in California’s bucolic wine country, it is estimated that there are 1,400 miles of roads that will require $1.6 billion to repair, money that the county on its own simply doesn’t have to fix the roads. In San Joaquin County in the state’s Central Valley, estimates are that another $1.25 billion is necessary to fix and maintain 3,288 miles of roads over the next 10 years, and that as a result of shrinking Federal and state dollars for road maintenance, the roads may fall into further disrepair. These needs are not to mention the road networks in need of attention in major population centers like Los Angeles, San Francisco, and San Diego counties.

Part of the reason Sonoma cannot repair its roads is because of the substantial drain that out-of-control public employee union pension liabilities costs the county.

Since 2000, spending on pensions has grown 400 percent. Sonoma is simply strapped for cash and in order to afford its pension payment obligations, it must reduce other pubic spending including fixing roads. Public employee union pension obligations are swamping city-after-city in California with the result being reduction in other public services.

In San Jose, for example, roads are “pocked with potholes” and libraries closed three days a week, because of generous public employee pension obligations that gobble up so much of the city’s annual budget. As a result even some police services have been eliminated, such as in its burglary unit.

A Democratic State Senator is looking at new ways to raise taxes and has proposed legislation to tax all automobiles on actual road use, rather that just gasoline consumed, in an effort to make owners of more fuel efficient vehicles pay higher taxes. But the idea of installing an electronic device in California automobiles that would measure the amount of miles driven so taxes could be levied on a per mile basis instead of at the pump did not prove too popular in the recent Field poll, which found 66 percent opposed to the idea and only 30 percent in favor.

The real answer to funding necessary public services by state and local government and doing things like fixing roads and restoring police services in states like California is to re-establish priorities in favor of taxpayers and not government.

That process will necessarily involve rethinking the poor decisions government managers have made in the past on allowing for too generous public employee pensions, which are draining funds for other necessary services.

When the biggest line item in a government budget becomes pensions as opposed to public services, government is transformed from serving the public to serving itself. In California, people already feel they are overtaxed. Roads will continue to deteriorate, as will the general quality of life, until the state’s politicians understand that government needs to start spending less on itself, reform pensions, and spend better in favor of taxpayers without taxing more.

Originally published by the Blaze

James V. Lacy, a frequent guest on Fox Business News Channel’s “Varney and Company,” is author of “Taxifornia: Liberal’s Laboratory to Bankrupt America.”

Top 5 Taxes You May See on 2016 Ballot

Last June, I wrote a column forecasting from least likely to most likely the tax increase measures that might be on the November 2016 ballot given the conversations going on then.

Time for an update.

As is nearly always the case in the political world, situations and strategies change. What’s being discussed most heavily today is not necessarily what will be pushed to the ballot for voters to decide in 2016.

By measuring fact, rumor and innuendo I’ll offer my reading of the top five tax possibilities for the November 2016 ballot.

First, a word about those that did not make the list this time. Previously, a soda tax was on the list but that possibility seems to have faded for the moment. Instead, advocates are considering labeling sodas with more information about the sugar content.

There is a constant buzz about restructuring the entire tax system and that has been heightened by the introduction of a bill by Senator Bob Hertzberg that would re-do the tax system, cut some tax rates, and introduce a service tax. Hertzberg hasn’t developed the plan in full as yet. Both the left and the right have attacked the idea. However, he also is working closely with the Think Long Committee, which has the resources to qualify a measure for the ballot. As of now, the idea is not ready for consideration.

To the list, then:

  1. OIL SEVERANCE TAX. Previous Ranking #3.

Whether the oil severance tax initiative moves forward depends on one man – hedge fund billionaire Tom Steyer. He said he would rather work through the legislative process but the bill would unlikely pass the legislature. Steyer also is said to be interested in promoting an initiative that would require a two-thirds vote in local communities to approve fracking for oil. While he has the resources to do more than one measure, the odds are he would focus on just one, if any.

  1. SURPLUS! NO NEW TAXES. Previous ranking: Unranked

Okay, this is obviously not a tax increase measure. However, with the recent announcement of one billion unexpected dollars in the state treasury many experts predict that the state budget will have a surplus of two billion dollars or more. Under such conditions, some observers suggest new taxes won’t fly with the voters, so why try? A lot will depend on the fiscal situation heading into next year’s budget, but even if the economy holds steady and the budget is in good shape, it is hard to imagine there won’t be at least one tax increase measure on next year’s ballot. Still, the chances are more likely today than they were a year ago that a surplus could stall the tax increase movement.

  1. SPLIT ROLL. Previous ranking: #2

While there is still an on-going grassroots effort to promote a split roll property tax requiring business property to be taxed on a different basis than residential property, big players have yet to commit to funding such an initiative. Certainly, there would be big money spent to oppose such a measure so both sides are considering the issue carefully. The school establishment would have to step up to support a split roll and consider how a property tax on the same ballot with an extension of the Prop 30 taxes will play. Also, a school bond measure may be on the ballot attracting attention from the school folks. A couple of sources tell me a little air has come out of the split roll effort, so while it certainly hasn’t gone away, it drops to #3.

  1. CIGARETTE TAX: Previous ranking: #4

The possibility of a cigarette tax on the ballot has moved up simply because some of the items in front of it moved down in the rankings. There really hasn’t been a change in the emphasis of a cigarette tax by proponents. They will try the legislative route but if unsuccessful will consider going to the ballot where they were very close to passing a measure the last time they tried. No Lance Armstrong on their side this time, which is a good thing, although they’ll miss the money his group donated.

  1. EXTENSION OF PROPOSITION 30. Previous ranking: #1

No change here. Many insiders believe Proposition 30 would be the easiest tax to pass since it is already levied. Especially if the sales tax piece is removed, many voters would not directly feel the tax’s pinch. All the spending interests may not be happy since schools get most of the money, but extending Prop 30 still stands as the most likely tax measure to be on the ballot. The biggest question: What will Governor Brown say about continuing the “temporary tax?”

Joel Fox is Editor of Fox & Hounds and President of the Small Business Action Committee

Follow Joel Fox on Twitter @1JoelFox1

Originally published by Fox and Hounds Daily

Whether Politicians Like It or Not Gasoline Is California’s Life Blood

The Field Poll reports that for the first time in seven years more California voters believe the state is moving in the right direction (50 percent) than feel it is on the wrong track (41 percent). Those living in coastal California are much more likely to have a positive outlook on our state’s future than inland residents. And Democrats are more optimistic than Republicans, so it may be safe to assume that Democrats living in Malibu, Silicon Valley and the Bay Area are much happier than Republicans living in Central Valley and other areas with high unemployment.

Like politicians everywhere, California’s governing class will attempt to claim credit for this reversal of what had been nearly unanimous pessimism.  Moreover, they will also claim that this is vindication of progressive policies that have given California one of the most harsh tax and regulatory environments in the nation.

However they explain the voters’ optimism, they are unlikely to bring up the one thing for which they can claim no credit whatsoever; the lower gas prices that existed during the period the poll was conducted, January 26-February 16, just before the cost of a gallon of gas began to vault upward again.  With prices in late January down almost 2 bucks per gallon since the high in 2014, many Californians have had reason to smile. It is also interesting to note that the last time more voters than not were positive about their state, gas prices were also down.

Even if there is not an exact correlation, when drivers who fill up their cars two or three times a month see that they are saving money, they are definitely in a better mood.What is ironic is that while the Sacramento political class may want to take credit for voter optimism, they have been working overtime to keep the cost of gasoline high. Between the high gas tax and the additional “carbon tax” imposed on manufacturers that is putting upward pressure on prices, the politicians have proven they are no friend of the millions of average folks who must depend on their cars for transportation.  According to State Board of Equalization Member George Runner, even with the price dip, Californians in January were paying as much as 47 cents more per gallon than drivers in other states.

Acknowledging that gas taxes are providing sufficient revenue, the State Board of Equalization last week reduced the state gas tax by 6 cents a gallon beginning this July. The reduction is based on a formula enacted by the Legislature in 2010, a formula that is so complicated that most news reporters don’t understand it.  Runner rightfully objects to this confusing system that hides the actual cost of the gas tax by hiding the second carbon tax that is only reflected in the overall price.  Currently, Californians pay about 64 cents per gallon in taxes and fees — the second-highest rate in the nation — but we become number one when the hidden tax of about 15 cents is added in.

If the Sacramento politicians really want to see voters smile, they should lay off trying to increase costs for the millions of Californians who depend on their cars to go to work, take their children to school and to do the weekly shopping.  Because one thing is certain – the optimism that Californians are feeling now will disappear in a heartbeat if gas prices return to what they were less than a year ago.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

10 Reasons to Support Mileage-based User Fees

The debate over gas taxes or mileage-based user fees to fund road construction and maintenance is heating up. Proponents of gas tax increases argue now is the time to proceed because lower gasoline prices would lessen the blow on consumers and blunt political opposition. In California, a commission to study road usage charges and establish a pilot program for mileage charges has begun meeting. Assembly Speaker Toni Atkins has revealed her quest for non-specific fees to pay for road maintenance.

Fuel taxes have been used as the prime method to fund roads since Oregon implemented a gas tax in 1919. Because fuel taxes are charged per gallon, the tax has dropped proportionately with the advent of electric, hybrid, and fuel-efficient vehicles.

Taxpayer advocates have complained that money for the roads has been used for other purposes, especially during the recession. Meanwhile, some electric car users say the gas tax should be increased as if there is no cost to the roads from electric vehicles even though electric car manufacturers and purchasers have received subsidies from the state.

Perhaps surprising to some, the idea of a mileage user fee is supported by the small government, libertarian Reason Foundation and one its founders, transportation expert Robert Poole.

Along with Adrian Moore, Poole produced a report last year supporting mileage based user fees for highways. While the study expressly deals with federal highways, the discussion over mileage base fees could also apply to state roads.

Poole and Moore list ten reasons why supporting a mileage user fee is the best way to fund transportation. As Poole summarized those reasons:

  • Reason 1: Per-mile tolling is a direct, rather than indirect, user fee. Motorists would pay for the amount of service they received; they would pay providers directly for providing that service; and they would know exactly how much they were paying and what they were getting for it.
  • Reason 2: Per-mile tolling is a sustainable long-term funding source for long-term infrastructure, which does not depend on the energy source used to propel the vehicles. Its transparency should help rebuild trust in the highway funding system.
  • Reason 3: Per-mile tolls can be tailored to the cost of each road and bridge, rather than being averaged across all types of roads, from neighborhood streets to massive Interstates; this ensures adequate funding for major highway projects like Interstate reconstruction and modernization.
  • Reason 4: Per-mile tolling reflects greater fairness, since those who drive mostly on Interstates will pay higher rates than those who drive mostly on local streets.
  • Reason 5: If per-mile tolling is implemented as a true user fee, it will be self-limiting, dedicated solely to the purpose for which it was implemented (and enforceable via bond covenants with those who buy toll revenue bonds).
  • Reason 6: Per-mile tolling will guarantee proper ongoing maintenance of the tolled corridors, since bond-buyers and other investors legally require this as a condition of providing the funds.
  • Reason 7: Per-mile tolling also provides a ready source of funding for future improvements to the tolled corridor.
  • Reason 8: Toll financing means needed projects, such as reconstruction and widening, can be done when they are needed, and paid for over several decades as highway users enjoy the benefits of the improved facilities.
  • Reason 9: A per-mile tolling system using all-electronic tolling can easily implement variable pricing on urban expressways to reduce and manage traffic congestion.
  • Reason 10: Per-mile tolling would be the first big step toward replacing fuel taxes with mileage-based user fees—something that most of the transportation research and policy community has concluded should eventually happen.

Concluded Poole: As this policy brief makes clear, the fuel tax was never an “ideal user fee”. It should be replaced with a direct charge for highway services that is sustainable, fair, efficient and—for major highways and bridges—tailored to the capital and operating cost of individual facilities. This system should not create privacy concerns by enabling governments to track where and when people travel, and should give motorists choices in how to pay for their miles traveled.

Others have argued that money for the roads should come from state surpluses or from re-directing revenues dedicated to the high-speed rail project.

The debate over road maintenance costs has begun in earnest.

Originally published by Fox and Hounds Daily

Gas Tax vs. Fee on Miles Driven

Seeking a creative and long-term solution for financing highway and road construction and upkeep, a new commission kicked off its investigation of a “Road User Charge” as a possible replacement for the well-traveled gasoline tax.

Created by 2014 legislation and given the nod by Governor Brown, the ponderously-named Road User Charge Pilot Program Technical Advisory Committee kicked off its deliberations last week. I am privileged to have been appointed one of of the committee’s 15 members, representing business and economic interests.

A confluence of forces continues to reduce the effectiveness of the gasoline tax as a stable revenue source for highways. Pegged to the amount of gasoline purchased, the tax could keep pace neither with inflation in construction costs or increased efficiency in automobile performance. CalTrans has estimated that inflation and improved vehicle efficiency has eroded more than 60 percent of the value of the gasoline tax since 1994. 

And this is before the ambitious roll-out of electric, plug-in hybrid and fuels cell vehicles in the state – which use little or no gasoline and therefore are the quintessential “free riders.”

In his inaugural address, Gov. Brown spoke of the “importance in having the roads, highways and bridges in good enough shape to get people and commerce to where they need to go,” estimating that the state has deferred maintenance and upkeep needs of $59 billion. In calling for a bipartisan solution for transportation finance, the Governor did not single out a mileage fee, but this option is certainly deeply in the mix.

The Advisory Committee has an ambitious agenda: within one year it must recommend how the state’s Transportation Agency can launch a pilot program testing a Road User Charge in real world circumstances. The committee will examine technical feasibility, reliability, implication for privacy rights, data security, motorist compliance, and overhead costs.

California will probably not break new policy ground on this project. The states of Oregon and Washington are already examining mileage fee alternatives, with Oregon on the verge of implementing a pilot project with 5,000 volunteer motorists. Findings from these other West Coast states will be invaluable for California’s consideration.

For more information on this effort and on the Technical Advisory Committee, visit this website at the California Transportation Commission.

Originally published on Fox and Hounds Daily

Tax Hikes Loom for 2016 Ballot

Although it may seem far in the distant future, there has been a great deal of speculation regarding what ballot propositions might appear on the 2016 General Election ballot in California.  Focusing on just those proposals having the potential for real harm to taxpayers, here is our short list:

SALES AND INCOME TAX EXTENSION — An extension of the temporary sales and income tax increase voters approved with Proposition 30 in 2012 is being advocated by public sector labor leaders.  The proponents will argue that, since Californians are accustomed to paying these higher rates, it should be more palatable to voters to make these tax increases permanent as opposed to some “new” tax.

OIL SEVERANCE TAX — An oil severance tax – taxing petroleum as it is extracted – is likely to be advanced by those who see an opportunity to soak an unpopular industry. They will count on the public not noticing that these taxes will be passed on to California drivers in the form of higher gas prices.

SPLIT ROLL PROPERTY TAX — Those on the far left are salivating over the prospect of an increase in property taxes for commercial property.  This attack on Proposition 13 would split the tax roll so that business property will pay much more. The impact on small business and jobs will be glossed over with the usual platitudes like, “It’s for the children.” They will totally ignore that higher taxes on businesses are passed through to consumers in the form of higher costs for goods and services.

TOBACCO TAX — A tobacco tax is also in the offing.  The state tax on a pack of cigarettes is 87 cents.  Those wanting more tax revenue would like to add another two dollars and will probably also claim it is a blow for public health because it will help smokers quit.  Even if one opposes smoking, it has to be acknowledged that tobacco taxes are highly regressive as well as leading to more black market commerce which, by the way, goes untaxed.

LOWERING OF THE TWO-THIRDS VOTE FOR BONDS AND/OR PARCEL TAXES – Of greatest concern to California homeowners is the possibility that the two-thirds vote requirement for local bonds and parcel taxes will be eliminated.  These levies are repaid only by property owners.  How realistic is this threat?  Considering that, for the first time since Prop 13 was passed in 1978, a house of the California legislature actually passed this anti-13 proposal (ACA 8) the threat is very real.

BAG TAX – The “bag tax” – a charge on single use bags – is actually not a tax increase proposal. Rather, this tax was enacted by the legislature but is now subject to repeal via the referendum power by those opposed to the tax. The tax reflects “nanny government” at its worst.

Here are a couple of observations about this potential tax “tsunami” at the ballot box. First, the threat from anti-taxpayer initiatives is even higher than in prior years because, for 2016, it is much easier to qualify initiative measures generally.This is due to the fact that the signature requirement is based on the most recent election’s voter turnout. 2014’s historically low turnout means that initiative measures now need far fewer signatures to qualify than in previous years.

Second, what happens if all these tax hikes appear on the ballot?  Would this be the ultimate “Dooms Day” for taxpayers?  Perhaps.   But, in an odd way, it might be a positive development. By overreaching and asking for the moon, the tax-and-spend crowd might ensure defeat of all the measures as voters begin to add up how much these proposals, in the aggregate, are going to cost.

Third, while Californians in the last election were fairly generous in passing local tax measures, this does not necessarily translate into support for state tax hikes. Voters’ recent support for Proposition 30, discussed previously, was based on a perceived crisis for education if the taxes were not approved. Plus, the hikes were sold as “temporary.” Those conditions are not currently present. Californians are increasingly aware that we live in a high tax state and resistance to higher taxes will be high for the foreseeable future.

In any event, expect to see the groundwork laid for these and other tax raising initiatives very soon.   It will be important for taxpayers to pay close attention and to keep a tight grip on their wallets.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This article was originally published on HJTA.org

CARB Must Listen to the People about Hidden Gas Tax

Last week, I was proud to deliver 115,000 signed petitions on behalf of my fellow Californians on the controversial “fuels under the cap” regulation at the California Air Resources Board’s (CARB) Diamond Bar board meeting.

I was joined by dozens of community and educational leaders, elected officials, business organizations and concerned drivers as we gathered outside the California Air Resources Board (CARB) meeting in Diamond Bar to urge the Board to listen to the voices of its constituents and delay its regulation scheduled to take effect next January.  Along with the petitions to CARB, our group urged the Board to place its contentious “fuels under the cap” regulation on a public meeting agenda to provide an opportunity for the public to be informed and heard on the negative impacts of higher fuel prices of 16 to 76 cents per gallon come January.

Higher consumer fuel prices will reduce other spending by consumers and result in the net loss of 18,000 jobs and nearly $3 billion in economic output in 2015 alone, according to an economic analysis by Encina Advisors. Independent experts and CARB’s own advisors have raised concerns that the current design flaws in California’s cap-and-trade market could result in much higher allowance prices, in which case economic losses would balloon to 66,000 jobs and nearly $11 billion in economic activity. These projected losses take into account spending of allowance revenue by the State of California, which will grow to several billion dollars once the “hidden gas tax” takes effect.

According to the analysis, lower-income families will be hit hardest by this tax increase because they spend as much as 38 percent more as a percentage of their income on gas, and because they work in the retail and service sectors that will see the highest number of job losses.

Small businesses will be harmed twice by this policy.   Not only will it hike the cost of doing business, which hurts jobs and business growth, it will also take more money from California consumers at the pump that they won’t be able to spend at retail shops, restaurants and elsewhere. Instead of infusing local economies, these dollars will flow to Sacramento to support billions in more government spending on items such as high-speed rail that result in little or delayed economic activity, meaning the “hidden gas tax” will result in a net economic loss to California communities.

CARB members may not be elected, but they still have a duty to serve the public’s interest to meet these goals in responsible ways that do not harm our communities or our economy.

We commend what we are observing to be an increasing bi-partisan trend in Sacramento for more careful scrutiny of the economic impact of regulations and the effectiveness of state agencies. With CARB meeting in the coming months, they should hold this gas tax to same important standard.   There’s still time to act. Let’s hope CARB members do the right thing and listen to the people in an effort to protect and save California jobs.

John Kabatck is California Executive Director, National Federation of Independent Business

The article was originally published on Fox and Hounds Daily