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Backlash against new car and gas taxes? Just wait

Posted on April 18, 2017 by Sonoma Valley Sun

If Gov. Brown and members of the California Legislature think that the backlash against the car and gas tax increases will subside any time soon, they are mistaken. The controversy continues to dominate both traditional and social media and, in fact, the more that taxpayers learn about these transportation tax hikes the angrier they get.

Our political elites are learning that taxes on cars and gasoline remain very unpopular because they fall disproportionately on the working Californians — which is where the majority of voters reside. And the resentment might only grow when the taxes actually kick. Just wait until the bills from the DMV start showing up in the mail starting in January of next year and the gas tax increase starts even earlier in November of this year.

There are times when Californians are simply resigned to pay higher taxes imposed by Sacramento, but this might not be one of those times. Many are calling for a referendum of the tax hikes only to be disappointed with the news that, under the California Constitution, a tax increase can’t be repealed via a referendum. Nonetheless, it is possible that the tax package can be rolled back via an initiative and some groups are pondering that course of action. Other interests want more immediate action and are openly discussing recall efforts against some legislators who supported the tax package.

One of the more compelling arguments against the tax hikes was that the state has failed to prioritize transportation spending, so why should citizens accept higher taxes. In response to this, the proponents in the Legislature swore up and down that, unlike all the broken promises before, this time the money would actually go to roads and highways. To show they meant it, the Legislature also passed Assembly Constitutional Amendment 5, which they claim would protect those dollars against the type of diversion that has consistently occurred in the past.

However, it is now clear that ACA5 is just another smokescreen that will allow the new tax hike dollars to go to all sorts of things other than roads and highways.

While ACA5 claims to protect the new tax revenue, it is evident from even a cursory reading of the language that this is not the case. While one provision seems to restrict the revenue from being diverted, another provision provides an exception based on statutory law “as those sections read on January 1st, 2018.” That’s right. An exception to the restriction is based on a law that can be amended before January 1st, 2018.

So, between now and the end of session, the majority party could pass a budget bill that takes effect immediately and exempt whatever car tax revenue they want from going to transportation. One of the exemptions found in the Government Code would allow the governor to transfer new car tax revenue into the General Fund if he/she determines that “there is insufficient cash in the in the General Fund to meet payments authorized by law.”

So there you have it. Before the ink is even dry on the bill imposing the transportation taxes, the tax-and-spend Legislature has created a situation whereby the money could, as it has several times in the past, be diverted to the general fund to be spent on pensions, government salaries, welfare, the bullet train or who knows what.

And in another legislative sleight of hand, ACA5 exempts all of the new transportation revenue generated from applying under the Gann Spending Limit. This limit, first approved by voters in 1979, created a cap on budget appropriations limited to the annual increase in inflation and population growth. Over the years a number of spending categories were excluded from the Limit, diluting its effectiveness. Creating further exemptions of billions of dollars of new tax revenue further undermines the spirit of what voters approved and will not serve to restrain the voracious spending appetites of California politicians.

– Jon Coupal, president, Howard Jarvis Taxpayers Association



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