Sunday , June 23 2024

A look at California's gas tax

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Despite the fact that gas prices are down these days, California drivers continue to pay the highest gas taxes in the nation,&nbsp;and starting on January 1st some believe a new fee will be added to those taxes. <br /><br />Some speculate California gas prices could jump an additional 15 to 70 cents a gallon.The higher prices – if they come – will come from the state’s cap and trade program – also known as AB32. It’s designed to reduce greenhouse gas emissions.&nbsp;Starting on January 1st – ‘transportation fuel suppliers’ – will start paying into the program, and those costs will be passed along to you in the form of higher gas prices. Some are calling it &quot;the hidden gas tax.&quot; <br /> <br />Tonight we examine what it could cost you, our local business and our schools and where the money is really going.<br /><br />Like many small business owners, David Salter worries about higher fuel costs. He also worries about his workers and being forced to do something he hasn’t had&nbsp;to do in 25 years-<br /> <br /> &quot;I hate to even think about that,&quot; Salter started.<br /><br />We’ll explain what that is in a moment,&nbsp;but first some background. California has the highest gas prices in the continental U.S.&nbsp;and the highest gas ‘taxes’ in the nation.&nbsp;For every gallon of gasoline or diesel you purchase&nbsp;the government collects between 71 and 74 cents in taxes. Some believe the expanding Cap and Trade Program, also known as AB32, will tack on an additional 15-to-70 cents on top of the highest gas tax base in the country.&nbsp;<br /> <br />Local assemblyman Jim Patterson is an outspoken critic of what some are calling the &quot;hidden gas tax.&quot; He recently held a press conference in Clovis on the cost of Cap and Trade here in the valley.<br /><br />So what is the hidden gas tax, and what does it mean for you? It means gas prices are going up,&nbsp;but by how much is up for debate.&nbsp;On the low end you’ll pay an extra $3 every time you fill up a 20 gallon tank. On the high end you’ll pay an additional $14 to fill up.&nbsp;That’s on top of the taxes you’re already paying. The bottom line is the state will collect tens of billions of dollars.&nbsp;<br /><br />Think about it,&nbsp;every person, every industry, every business paying the state more for fuel,&nbsp;from our local citrus industry,&nbsp;to local trucking companies, to small business owners. Even the Clovis Unified School District could pay an additional $100,000 per year to keep its fleet of buses running.<br /> <br />&quot;There’s no new money to cover that cost,&quot; Steve Ward of Clovis Unified School District said.&nbsp;<br /> <br />Keep in mind every school district in the state will pay more for fuel, not just Clovis. The state budget analyst predicts that overall, the combined total cap and trade program could collect up to <a href="http://www.lao.ca.gov/reports/2014/budget/cap-and-trade/auction-revenue-expenditure-022414.aspx" target="_self">$45 billion by 2020</a>.<br /><br />To put that into perspective, $45 billion is six times bigger than the water bond that voters approved this month and 16 times bigger than the money set aside for water storage. So where’s all the money going?<br /> <br />Unlike regular tax revenue that goes to Sacramento,where lawmakers allocate funding in open public debates,&nbsp;cap and trade revenue bypasses that traditional transparent legislative process. Instead, under the Global Warming Solutions Act, again AB32, billions of dollars will go to the Greenhouse Gas Reduction Fund. Twelve non-elected members of the <a href="http://www.arb.ca.gov/board/bio/marynichols.htm" target="_self">Air Resource Board</a>, who are appointed by the governor and approved by the state senate, help to oversee the funds.<br /><br />Their annual operating budget is over $850 million and growing. The Air Resources Board says the money supports clean mass transit more fuel efficient, low emission vehicles and improved freight movement, just to name a few. But where has the money gone so far? We’ll not only show you where the money is going, but why some believe California’s cap and trade is illegal. We’ll also show you the one thing that David Salter fears he may have to do for the first time in 25 years.&nbsp;<br /><br />Lets face it, on any given day our valley air quality is horrible. Even opponents to AB32 agree something needs to be done.<br /><br />Where has the bulk of money gone so far?&nbsp;The <a href="http://ww2.kqed.org/news/2013/06/11/california-budget-will-borrow-cap-and-trade-auction-money/" target="_self">state recently borrowed half a billion dollars</a> from the fund to balance the state budget. They promise they’ll pay it back.<br /><br />Reduction in Greenhouse Gas Emissions? Zero.<br /> <br />The governor also recently siphoned off $250 million from the fund to help pay for the state’s largely unfunded $68 billion bullet-train.<br /> <br /> Reduction in green house gas emissions? For now, zero.<br /> <br />Some believe high speed rail won’t be completed until 2029,&nbsp;but they believe <a href="http://www.hsr.ca.gov/docs/newsroom/fact%20sheets/good%20for%20the%20state,%20good%20for%20the%20environment.pdf" target="_self">high speed rail could cut green house gas emissions</a> by up to ten million metric tons by 2040.<br /> <br />So, where is the rest of the money?<br /><br />Senate Bill 535 requires that 25% of the cap and trade funds go to disadvantaged communities. The money is to be spent on weatherization of homes, which would include weather stripping, insulation, hot water heaters and solar. <br /><br /><a href="http://www.lao.ca.gov/reports/2014/budget/cap-and-trade/auction-revenue-expenditure-022414.aspx" target="_self">Hundreds of millions</a> are also earmarked for everything from fire prevention, to wetland restoration, to green state buildings to food and agriculture and recycling.&nbsp;<br /><br />But is all that spending really significantly cutting greenhouse gas emissions? <br /><br />&quot;That makes it even more reasonable that there should be a public discussion of how we’re spending those funds,&quot;&nbsp;Al Smith, from Fresno Chamber of Commerce said.<br /> <br />The state’s non-partisan legislative analyst’s office shares that skepticism. It concluded in its <a href="http://www.lao.ca.gov/reports/2014/budget/cap-and-trade/auction-revenue-expenditure-022414.aspx" target="_self">2014-2015 budget review of the cap and trade spending plan</a>:&nbsp;&quot;…there is significant uncertainty regarding the degree to which each investment proposed for funding would achieve greenhouse gas emissions reductions.&quot; <br /> <br />What about the claim that this is a &quot;hidden tax on consumers?&quot;<br /><br /> &quot;What this is… is not a tax,&quot; Dave Clegern of the Air Resources Board said.&nbsp;<br /><br />The board won’t call it a tax, even though there’s pending litigation on that very question. For now, legally at least it’s a fee. If its ruled as a tax it could be illegal. For now the board won’t even concede that gas prices will go up next year.<br /><br />&quot;I can’t tell you if prices are going to go up on January 1st. I don’t have any control over that,&quot; Clegern said.<br /><br />Seth Kerstein,&nbsp;with the Legislative Analyst’s Office and who has a PhD in Economics, admits prices will likely increase 13 to 20 cents per gallon, or more.<br /><br />&quot;It could go exceed 50 cents per gallon, potentially. It’s not likely, but its possible,&quot; Kerstein said.<br /> <br /> Even Democratic State Senate Darrell Steinberg, a supporter of cap and trade, has predicted that gax prices could spike 40 cents a gallon.&nbsp;<br /> <br />The <a href="http://www.californiadriversalliance.org/" target="_self">California drivers alliance</a>,&nbsp;which received its seed money from the Western States Petroleum Association, predicts prices could jump 76 cents a gallon. <br /> <br />To which Clergern, of the Air Resource Board, said, &quot;The price at the pump is something that ARB has no control over.&quot;&nbsp;<br /> <br />Where does that leave you? Where does it leave businesses? Can’t they just pass the extra fuel cost on to consumers?<br /><br />&quot;They always say pass that cost along, but here in the valley where we’re at. People don’t have any money,&quot; Salter said.<br /><br />&quot;You can only charge so much for a piece of fruit, because the consumer has alternatives,&quot;&nbsp;Joel Nelsen from the California Citrus Mutual&nbsp;said.&nbsp;<br /><br />Our schools lose too. Clovis Unified says higher fuel costs will mean fewer after-school tutoring programs, fewer councilors for at-risk students and fewer text books.<br /> <br />&quot;This is going to be hyper inflationary. We’re going to lose jobs,&quot; Patterson said.<br /><br />Which brings us back to David Salter and the one thing he hates to think about<br /> <br />&quot;I hate to even think about that. Possible layoffs,&quot; Salter said.<br /> <br />Some fear thousands of jobs will be lost as businesses cut costs to absorb higher fuel costs,&nbsp;but A.R.B. says a study by UC Berkeley claims jobs will be created, not lost. <br /><br />What’s the alternative to cap and trade?<br />Get rid of it, says assemblymen Patterson. He points to Australia’s failed carbon tax. Admittedly Australia’s ‘carbon tax’ was different from California’s cap and trade program,&nbsp;but both were promoted as a way to reduce greenhouse gas emissions.&nbsp;<br /><br />Some believe &nbsp;the state’s new cap and trade program is the wrong approach to trying to clean up our air and will disproportionately hurt the poor, many of whom live right here in the valley.<br /> <br /></div>

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