Gas prices already inflated by government; more taxes aren't the answer

By Senator Mike Morrell
Sunday, April 3, 2016

Published at the Press-Enterprise

National headlines have recently chronicled a decline in gas prices – in many cases, the lowest in over a decade. In some parts of the country, it is not unheard of for a gallon of gas to go for less than two dollars per gallon. Simply drive across the border to Arizona and you see the price drop dramatically.

It begs the question, why is the price of gas so much higher in California? The answer primarily lies in a state government that tries, in President Reagan’s words, to tax and regulate everything that moves.

This fact was at the center of a presentation on gas prices given at a February meeting of the California Energy Commission’s (CEC) Petroleum Market Advisory Committee. Data provided by CEC Senior Fuels Specialist Gordon Schremp showed, not surprisingly, that California drivers pay higher than average prices for gas than those in other states. In 2015, the average difference in price was 74 cents.

One of the factors in this price difference is our high taxes. Formally, California’s gas tax is 30 cents per gallon. But Mr. Schremp’s presentation also showed that hidden costs (or de facto taxes) due to environmental laws make up another sizable portion of what we pay at the pump. For example:

  • Cap and Trade. Gasoline is now subject to the state’s misguided carbon reduction laws – a policy I worked with many of my colleagues to oppose. This accounts for at least 10.3 cents of every gallon purchased.
  • Low Carbon Fuel Standard. Another 4.3 cents been tacked on by unelected regulators on the California Air Resources Board to force companies to comply with carbon restrictions in fuels. At present, however, technology does not exist to meet the standard, which could result in expensive penalties and further costs passed on, like always, to consumers.  

These extra costs essentially increase the gas tax by almost 50 percent, adding up to roughly 44.6 cents per gallon of gas due to taxes and regulations. For families who drive cars with 20-gallon tanks, this equates to nearly nine dollars extra a fill-up, and if the car is re-fueled once a week, it adds up to over $450 a year.

Yet given these realities, Democrat leaders have still renewed calls for another tax hike on gas. Even though the majority party finds millions to pay for cash cards for felons, unlimited texting and data plans for others, as well as $67 billion for high-speed rail.

But Californians should be extremely wary about any push to raise taxes on gas. Before we pay more, we need to ask ourselves, how our state can have one of the country’s highest gas taxes, with some of the highest retail prices, and yet still have roads and infrastructure that consistently rank the worst in quality?

Besides environmental laws, it also comes down to the fact that existing money is not being used as effectively as it could be. For example, $1 billion per year from truck weight fees is being spent on paying budgetary debt, rather than on road repairs. Republicans have proposed reversing this policy by constitutionally guaranteeing that transportation dollars like these would be used for transportation infrastructure.

Increased pressure by interests in the Capitol could also dedicate more of these taxes to projects like rail, instead of on our deteriorating highways. This comes on the heels of a Los Angeles Times report showing that the region’s light rail now has fewer boardings than it did three decades ago despite a recent $9-billion investment.

Voters have consistently expressed opposition to the prospect of a higher gas tax, with polls showing Californians are overwhelmingly against the idea. Results released in a fall survey conducted by UC Berkeley pegged the opposition level at 63 percent. I have also heard from hundreds of constituents who signed the petition on my website. They want an effective and efficient government.

California drivers already face the prospect of inflated and unpredictably high gas prices throughout the year. They should not have to pay even more at the pump while they are also being forced to sustain policies that provide little demonstrated benefit.