More Gas Taxes

Governor Brown signed the gas tax bill one week after it was introduced in the legislature. Apparently we had to pass it to learn what’s in it because I doubt anybody that voted YES actually read it.
Link: news story from KCRA-TV

Per media reports, the bill is supposed to raise 52 billion dollars over ten years. If you believe that this is a temporary tax, then I’ve got a bridge in Brooklyn that you might want to buy.

The pretext for this bill is that we have horrible roads because we are woefully under taxed. Now, California has the highest taxes in the country but somehow it is never enough. We have a spending problem not a revenue problem. Anyway, I digress.

Just for fun, I put all the numbers in my trusty Excel program and learned some interesting stuff.

KCRA’s math doesn’t work.  Right off the top, 7 billion dollars are missing.  I guess this is the cut off the top being diverted to the General Fund or to backfill underfunded pensions.

Of the remaining 45 billion, 24.44 percent is going to public transportation and non-road repair purposes.

Thus, 34 billion is supposed to be going to road repair over ten years. This means the tax is generating 3.4 billion per year for road repair. Currently the state diverts about two billion from road repairs from just two taxes that it collects on commercial vehicles. Extrapolating the other funds diverted from road repair means that there is no reason to have this tax. If the legislature would just follow both the law and the promises made to the people, all our repair needs would be fully funded with no new taxes.

But it’s actually worse than this. Money currently going to transportation can now be diverted from transportation to the General Fund. The way government budgeting works, this is the reality of what happens. Plus, the legislature is lying when they say that this money will go to its intended purpose. Yes some will but look at their miserable track record on this issue. Every few years they find a way to weasel out of promises made in the previous election cycle.

Tax revenue creates a government dependency on the revenue source, much like the homeless guy with an addiction problem; however, what happens in 2030 (a mere 13 years from now) when the internal combustion engine is outlawed in California. On this subject, look for two things to happen simultaneously: cars with gasoline engines will no longer be sold and gas stations will be outlawed via regulatory power and people that own “legacy” automobiles simply won’t be able to purchase fuel.

Lastly, did you notice that one Republican sold his birthright to give the governor a YES vote?  In the proud tradition of Maurice Johannsson and Roger NielloAnthony Cannella voted YES in exchange for 500 million dollars. This is less than one percent of the total amount of revenue the new taxes are supposed to raise; plus the governor can now say there was bipartisan support for the bill. Any bets that this guy is out on term limits soon?