The WasteWatcher: The Staff Blog of Citizens Against Government Waste

California Gas Tax Increase Faces Voters

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


On November 6, 2018, Californians will elect their new governor, a U.S. Senator, 53 congressmen and women, 80 members of the State Assembly, and 20 state senators.  For better or worse, as is usual in California, the ballot is likely also to contain numerous referendums.  One of those questions will ask voters if they want to repeal SB 1, which was enacted in April 2017 and raised the gas tax and vehicle registration fees, supposedly to fix California’s desperately failing roads.  If the proposal to repeal SB 1 is approved, any future increase in the gas tax or vehicle registration fees will also need to be approved by voters.

Anyone who cares about proper management of tax dollars should vote to repeal SB 1. 

California is famous for its sky-high taxes.  Even before last year’s big increase, the state has suffered for decades under profligate politicians.  As they consider November’s referendum, voters should be aware of the sordid history of taxes and spending in California:

  • Before the legislature passed SB 1, gas and vehicle taxes in California were already very high compared to other states, and have been high for a long time.  The Golden State gas tax was increased in 2015 and 2010, and on many other occasions directly and indirectly.  And who could forget the legendary tripled vehicle tax in 2003 that led to the recall of Governor Gray Davis (D)?
  • It’s not like California’s high gas and vehicle taxes are mitigated by lower taxes on other things; all of California’s taxes are high.  The state has the highest individual income tax, the ninth-highest sales tax rate, and eighth-highest corporate income tax.  Not surprisingly, California’s business tax climate ranks 48th among the states.
  • The already high gas taxes in California have not improved the state’s roads.  Potholes, congestion, and commute time are as bad as ever.  There is no reason to believe that yet another tax increase will suddenly be the one that delivers its promised results. 
  • California’s government has a terrible track record of diverting tax dollars away from the projects they are supposed to fund, and spending them instead on extraneous matters.  The gas tax fund has been raided before.  In fact, the California Legislative Analyst’s Office issued a report warning of this very possibility after SB 1 was passed.  State Senator John Moorlach (R) in August 2015 found that of the $10.6 billion collected annually from gas taxes and vehicle fees, only 20 percent is spent on road repair and improvements. 
  • California also has consistently underestimated project costs and completion timelines.  The state’s runaway high-speed rail boondoggle is one example.  In March 2018, the official cost estimate for high-speed rail increased from $64 billion to $77 billion; the system is now not projected to open until 2033.  Some estimates put the cost as high as $98.1 billion.  Back in 1999, the estimate was that the entire system could be built for $25 billion within 16 years.  Voters should continue to be skeptical about the government’s cost estimates.
  • California spends far more than other states on maintaining its roads—$84,005 per mile, according to a 2018 Reason Foundation study.  Nevada spends $20,262; Arizona $22,618; and Oregon $26,919.  Even if the gas tax increase was used for its intended purposes, Californians would still be getting less bang for their buck than their neighbors.   
     

The effort to repeal SB 1 has caused Governor Jerry Brown (D) to melt down; he has ridiculously claimed that the vote on the gas tax repeal is a “test of American strength” and “the real test of any kind of sustainable civilization.”  He demeaned as “un-Californian” the attempt to repeal the tax.  Governor Brown is acting as if he knows the repeal vote presents a real threat to the culture of tax hikes in California.  

He would be correct. 

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