Gas Prices Could Effect Tax Initiatives — Like Fires of 1993 Did

As early voting begins, Californians are dealing with a new cost crisis as gasoline prices explode upward all over the state. The five-dollar a gallon figure was crossed at a number of gas stations at the end of last week while other stations closed down for lack of supply.

If the skyrocketing gas prices stay high – even if they drop from their peak — the tax measures on the ballot may be impacted.

Proposition 30 is directly effected by the price increase since it increases the sales tax, which is applied to gasoline sales. However, even the tax increases of Propositions 38 and 39 could feel an effect. If voters feel burdened by the gasoline costs and the increases in products, such as produce, which are sensitive to increased transportation costs, that could effect their decision on raising taxes.

With rising consumer costs, just mention of the word “tax” may move a voter’s marker to fill in the “no” box.

The gasoline increase has been attributed to a number of factors, some that may linger through the month while voting is going on. There have been recent problems with pipelines delivering supplies, the fire at the Chevron facility in Richmond, and a power outage at a refinery. Out-of-state processed gasoline cannot be shipped to the state because of California’s strict rules to create cleaner burning fuel.

Over the weekend, Governor Jerry Brown requested that the less-environmentally friendly winter fuels, which normally are used after October, be shipped now to increase supply. The governor noted the “unacceptable cost impacts on consumers and small businesses” caused by the spike in gas prices.

While this action is predicted to eventually bring down top prices 15 to 20 cents a gallon, gasoline prices will still stay uncomfortably high.

Outside events can influence the outcome of elections. In 1993, during a special election, a half-cent state sales tax that was about to expire was put on the ballot to be made permanent, if the voters agreed. The tax was dedicated to local public safety, including fire protection.

Right before Election Day, devastating fires broke out around Southern California. The blazes consumed over 1,000 structures. Laguna Beach was hit hard as was Sierra Madre and Malibu. Ten days went by from the start of the first fire until the last one was extinguished – a period that extended beyond Election Day.

While seven measures were on the 1993 special election ballot, only two passed, including the tax measure with nearly 58% of the vote.

Higher prices for gasoline and an increase cost for products affected by gas prices could reverberate in the voting booth.

Update from the author: Sales tax is not applied to gasoline sales any longer (still applies to diesel). A tax swap a couple years ago eliminated the gasoline sales tax and replaced it with an increase in the excise tax.

(Joel Fox is the Editor of Fox & Hounds and President of the Small Business Action Committee. Originally posted on Fox & Hounds.)