Stopping the Hidden Gas Tax

By Senator Mike Morrell
Wednesday, October 22, 2014

Also published in The Inland Empire Business Journal (page 5)

Here in the Inland Empire, we drive a lot. It’s just a fact of life that most of us – from commuters to soccer moms to truckers – have to use automobiles to get to where we need to go.

But with the high cost of gas, day-to-day driving is increasingly becoming a financial burden, especially during these summer months when gas prices are at their highest. And believe it or not, some in Sacramento are trying to push them even higher.

Beginning January 1, 2015, gas and diesel fuel prices will start rising because of new regulations under California’s climate change law, AB 32.  They are part of the state’s Cap and Trade program and were created by unelected officials on the California Air Resources Board. The cost of these changes will amount to what I believe is a “hidden” gas tax.

This new tax is designed to force Californians to drive less and, therefore, use less fuel. Cost increase estimates range as high as 70-cents per gallon. Even the Democratic leader of the Senate, Darrell Steinberg, concedes we could see "spikes and wild fluctuations in gas prices."

Working with business leaders and elected officials from both parties, I have tried to draw attention to this issue. We are concerned that this tax could hurt our fragile economy and discourage hiring, expansion, and investment.

We are also concerned about the ripple effect that would occur if this tax goes into effect as planned. Pain won’t just be felt at the pump, but in our pocketbooks and bottom-lines as well.

For example: over 78 percent of California communities depend exclusively on trucks to deliver their goods. If fuel costs rise, trucking companies will have no choice but to increase the cost of moving freight. If shipping costs increase, so will the price of the products shipped. Because they operate on thin margins, wholesalers and storeowners must pass on the additional costs. In the end, family budgets and small businesses, like yours and mine, will suffer.

California already has among the nation’s highest sales tax, income tax, and business tax rates and CEOs have voted us the most difficult state in the nation to do business for ten years straight now. Despite this, the majority in Sacramento continues to ignore the challenges facing us. This must end, if we are to get back to economic stability.

It is imperative that the Governor and the Air Resources Board prevent this tax from going into effect.  Failing to do so will hurt Californians – the poor, the middle class, young adults, seniors on fixed incomes, businesses of all sizes, and the list goes on. This gas tax must be stopped.