As published in the Los Angeles Daily News Monday, March 21, and syndicated in the Daily Breeze, Daily Bulletin, Press-Telegram, Pasadena Star-News, The San Bernardino Sun, San Gabriel Valley Tribune, and Whittier Daily News.
By Tom Scott, State Executive Director, NFIB California
Every single thing you eat, touch or use is directly impacted by the price of gasoline. Gas prices in California remain significantly higher than the national average, despite modestly lower gas prices in recent weeks. Even though many across the country are enjoying gas prices of around $1.75 per gallon, here in California, we’re still at about $2.40 per gallon. While politicians and bureaucrats are decrying this price gap, they are still working to impose new taxes, fees and other regulations that will make our gas cost even more.
The rising cost of gasoline hurts consumers and small businesses alike. Californians already pay some of the highest gasoline taxes in the nation, but policy makers are discussing new legislation that will make our gas taxes go even higher. North Carolina currently has the highest-in-the-nation state gas excise tax at 35 cents per gallon, only five cents higher than our current excise tax. The proposals currently being discussed could put California well above North Carolina’s tax.
But the gas tax is just one small piece of the story of higher costs at the pump. First, California regulations require a more unique and expensive gasoline blend than any other state. Then last year, California regulators put transportation fuels into the cap-and-trade program, meaning that oil producers had to buy credits for the amount of carbon potentially created by these fuels. According to the California Energy Commission, this program alone adds an additional 10-cent fee per gallon of gas.
The Low Carbon Fuel Standard (LCFS) is a “command-and-control” program that mandates adding lower carbon content products, like ethanol, into gasoline. Consequently, it has increased the price we pay for gas. Last year, that program added 0.8 cents to every gallon of gas, but now that price has jumped to 4.3 cents per gallon — a 430 percent increase, according to the California Energy Commission. Experts believe this will continue to increase thanks to a mandate to further lower the carbon content of gasoline. This forces manufacturers to buy even more carbon credits since technology is not advanced enough to produce enough low-carbon fuels to keep pace with the program’s mandates.
As if this isn’t enough, Mary Nichols, the chairwoman of the powerful California Air Resources Board, has repeatedly stated her desire for an even higher price on carbon, meaning more significant increases to both the cap-and-trade and LCFS fees drivers are already paying.
In January, Gov. Jerry Brown announced a proposal to add another gas tax to fix our crumbling streets and roads, which begs the question: If Californians already pay some of the highest gas taxes in the nation, why are our roads falling apart? After all, it is the gas taxes that pay for our roads.
In total, California drivers pay an average of 59 cents per gallon in federal and state gas taxes and fees, and this is on top of the already expensive special fuel blend. The national average is 47 cents per gallon. But if these programs all move forward, we will pay more than 85 cents per gallon of gas just in taxes and fees. And we cannot forget that we pay a sales tax at the pump on the high prices.
Our gas tank should not become Sacramento’s piggy bank for pet projects in the Capitol. The policies that are being proposed have a deep impact on the ability to keep and expand jobs here in California. Adding more taxes on consumers and small businesses is the last thing we should do as our economy is still trying to recover. Without a comprehensive, balanced approach to environmental policies, the business climate in California will continue to get worse. Improving air quality and our transportation infrastructure are necessary, but must be done responsibly and not at the expense of our struggling small businesses in California.
Tom Scott is the California executive director for the National Federation of Independent Business. www.NFIB.com/california.