By Dan Walters | CALmatters Commentary
California motorists who filled their cars’ gas tanks last week paid an extra 12 cents a gallon, thanks to a multibillion-dollar package of improvements to highways, streets and other transportation facilities enacted by the Legislature and Gov. Jerry Brown this year.
The package, which also includes some extra automotive fees, is expected to raise more than $5 billion a year for transportation projects, most of which are aimed at catching up on long-delayed maintenance work.
That’s one of the tricky aspects of the situation. To build public support, backers of the package hinted—but did not promise—that it would do something about the state’s worst-in-the-nation roadway congestion, but in fact it will do little, if anything, to relieve traffic jams.
Most of the proposed improvements won’t be obvious, like expanding a freeway would be, and motorists may wonder whether they are getting something tangible for the extra money they are paying.
That’s not just a theoretical worry, because initial polling indicates that the new gas taxes are not popular, and there are a couple of efforts underway to repeal them via a ballot measure.
In fact, the state Republican Party seems to be counting on a gas-tax backlash to improve its otherwise dim chances of making gains in next year’s elections. The GOP is not only encouraging the repeal measures but also throwing its weight behind a recall drive aimed at Democratic state Sen. Josh Newman, who voted for the taxes after winning an Orange County-centered seat that had been in Republican hands for decades.
The unpopularity of the new taxes stems, in part, from the intertwined facts that California’s fuel taxes and fuel prices were already among the nation’s highest—about 60 cents a gallon above the national average—even as motorists were contending with congestion and pothole-pitted roadways.
Another factor is a widespread, if erroneous, belief that billions of gas-tax dollars have been siphoned away for non-transportation spending. In fact, while transportation funds have been borrowed to shore up the state’s general fund during recessions, all of them have been repaid or soon will be, so transportation projects did not suffer.
The major factors in California’s high fuel prices, in addition to high taxes, are the state’s generally higher costs of living—housing being the prime example—and its mandates on refiners to produce fuel specifically tailored to reduce smog-causing emissions and greenhouse gases such as carbon dioxide.
That said, Severin Borenstein, a professor at UC Berkeley’s Haas School of Business and a researcher at the Haas Energy Institute, points out that Californians also have been paying an extra 20 cents a gallon—some $3 billion each year—for fuel since 2015, due to a somewhat mysterious “large unexplained premium” in the portion of the overall cost going to refiners.
The anomaly, so far unexplained, is outlined in a September report from an advisory panel to the California Energy Commission, on which Borenstein sits.
“Before we roll back the new gas tax, before we cut the revenues for these public programs, shouldn’t we figure out where the rest of the money is going?” Borenstein asked in a newspaper article this week.
Indeed, we should. It adds still another dimension to the political debate over fuel prices and taxes that will continue to burn as motorists pay the new levies.
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