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.