“People need relief, not more taxes,” urged state Sen. Janet Nguyen, R-Huntington Beach, at a press conference in Brea today. Along with three other state legislators and local business and civic leaders, she pushed for the passage of Assembly Bill 1638, by Assemblyman Kevin Kiley, R-Rocklin.
In the bill’s language, it “would suspend the imposition of the tax on motor vehicle fuels for 6 months.”
The press conference was held in front of a sign showing gas prices as high as $5.25 in Sacramento. Another sign read, “CA gas prices 34% above U.S. average. Cost of CA taxes and regulations $1.27 a gallon. July 1, 2022 gas-tax increase $523 million.”
According to GasBuddy.com, today California’s average gas price today was $4.85 a gallon, the nation’s highest. Second was Hawaii at $4.53. The lowest was Arkansas at $3.26. Neighboring Arizona was $3.84 and Nevada $4.05.
Republican Assembly Leader James Gallagher of Yuba City explained Gov. Gavin Newsom has proposed suspending the gas-tax increase, although even that is meeting resistance from his fellow Democrats in the Legislature. But AB 1638 would go further and suspend the entire gas tax increase passed in 2017, which raises about $5 billion a year.
That means $2.5 billion would be given back to taxpayers from AB 1638. That’s at a time, he said, when the state budget surplus could amount to $60 billion for fiscal year 2022-23, which begins on July 1. However, Newsom’s January 10 budget proposal pegs the surplus at $45.7 billion, still enough easily to cover a $2.5 billion carve-out for a reduction in gas taxes.
Even as the press conference was unfolding, the price of oil was rising yet higher, to $109 a barrel. That’s nearly double the $56 on January 20, 2021, the day of President Biden’s inauguration. Higher oil prices inevitably translate into higher prices at the pump. Which means the cost of gas could rise toward $6 a gallon, or even higher.
Yesterday evening, in his State of the Union address, the president attempted to deal with inflation by advocating policies that actually would make it worse, such as increasing taxes on corporations and raising the national minimum wage to $15 an hour. It’s already $15 an hour in California. And even higher in some cities, such as $16.32 in San Francisco.
No wonder “the inflation is attacking our local communities,” Dara Maleki, founder and CEO of the Pizza Press in Anaheim, said at the press conference. “We see how it’s affecting businesses and, more important, our employees. It’s getting too expensive to drive, but most people don’t have a choice. It’s getting harder to make ends meet. The costs to truckers and manufacturers get passed down to the consumer. It raises the costs of ingredients, rent, power and more. I’m here fighting for my business, my employees and all of us in California.”
Gallagher pointed out how semi drivers now are paying $500 for one fill-up. “For Uber and Lyft drivers, it’s harder to break even in that job,” he said. “California Republicans are ready to help everyday Californians. But the Legislative Democrats don’t even want to help stop the increase this summer.”
Al Ricci, chairman of the Orange Chamber of Commerce, warned it’s “a hard time getting a workforce for 16,000 businesses” in his city, when “25 percent of pay is going away just to get to work.” That partly explains why restoring pre-pandemic employment numbers has been so difficult. Potential workers are calculating that, in many cases, it just isn’t worth it to get a job that includes soaring transportation expenses.
State Sen. Pat Bates, R-Laguna Niguel, pointed out “in the last two weeks California broke the record for the highest gas prices ever recorded. Higher gas prices are eating up Californians’ budgets for food, supplies and medications.”
She said in 2017, when “Democrats passed the biggest gas-tax increase in state industry, what we didn’t know was what would happen in the future.” She was referring to COVID-19, the inflation of Biden’s first year and now the Ukraine crisis, which has roiled global energy markets.
“People are hurting, families are hurting,” said Orange Mayor Mark Murphy. “Businesses are having trouble getting employees. It’s a perfect storm of inflation, raised prices and costs. Let’s suspend this gas tax. If you talk to anybody at the gas pump, they would appreciate a 50-cent cut in the gas tax. We really have to take a stand now. And we can’t pretend we can buy our way out of it.”
Assemblywoman Laurie Davies, R-San Juan Capistrano, summed up the case for AB 1638, “Californians need relief and they need it now.”
Although AB 1638 will have a tough time in the Democrat-controlled Legislature, it will be used by Republicans as a battering ram against their rivals this November. Democrats dearly want to maintain their 2/3-plus supermajority in both houses of the Legislature, which lets them totally ignore anything Republicans do.
But the Democrats’ own policies will hurt their chances in tossup districts as the issues of inflation, high taxes and failing schools aid Republican candidates.
John Seiler writes at johnseiler.substack.com
