California's new hidden tax on gas

By Carolyn Cavecche, President of OCTax Published in the Orange County Register, May 20, 2014 Over the past several weeks, we have all watched gasoline prices creep up. And now, in many places, we've already reached or surpassed $4 per gallon, right in time for the summer travel season. But next year, $4 won't be the exception; it will be the norm. In fact, we might be pining for the days when gas was just $4 a gallon. That's because next year we are all going to be paying a new "hidden" double-digit tax at the pump. That's right, starting next year, a law will go into effect that will increase the cost of gasoline by at least 12 cents. And as if that's not bad enough, the cost will continue to increase. This is the next step of a California Air Resource Board program related to climate change that aims to reduce greenhouse gas emissions by capping emissions produced during many industrial processes. While most of these costs are borne by industry, some will probably result in higher consumer costs. This latest regulation, however, will apply directly to transportation fuels, gasoline and diesel, and will likely result in a direct price increase of 12 cents per gallon of gas. But because the fuel trade market is so volatile, it could increase gas prices as much as 40 cents per gallon. This new "hidden tax" is in addition to the more than 70 cents we already pay in state and federal gas taxes. Which means, next year, we could be paying over a dollar a gallon in taxes alone. But here's the worst part: Your money won't even be going to improve our streets, roads and freeways. That's right, not a penny will go to constructing new freeways or filling potholes or any of the infrastructure improvements we are desperate for. Even though California's economy is dependent on a strong transportation system, especially good freeways and local streets, this new "hidden tax" won't improve our ability to move goods and services. But it will cost more to do so. California's economy is finally improving, and with it California's budget outlook. We now have a $4 billion budget surplus, so almost every state program is getting more money under this year's budget and the governor is even talking about putting money aside for a rainy day. But this recovery is fragile and based on the "temporary" tax increases of Proposition 30. We can't afford a new double-digit gas tax that has a direct impact on the average family budget. This new cost at the pump could push California over the fiscal cliff again and could put us back into recession. California already pays the highest gas taxes in the nation, on the highest gas prices anywhere in the country. And with some of the longest commuting routes around, imposing a new double-digit "hidden tax" on gasoline will prevent many people from getting to and from work. Our state, which already has a reputation for being bad for business, will force many companies to leave, pushing unemployment even higher. And what's the Legislature's solution? Ignoring it or even worse, coming with new ways to spend more of our money. While this new cost is so hidden that most in the Legislature either don't know about it or are choosing to ignore it, leadership is eager to spend this new tax revenue. It's time we make sure they know we oppose paying more when we fill up at the pump.