As America’s economy staggers to its feet after the body blows from the COVID-19 pandemic and the shutdowns they have caused, one thing that will aid the recovery is the low cost of gasoline and diesel.
That is if you don’t live in California.
For the third time since 2017, the tax on a gallon of gasoline will increase by 3.2 cents bringing the total tax to 50.5 cents per gallon. The hike is triggered by the increase in the consumer price index and is built into SB 1, the legislation that boosted the tax by 12 cents per gallon in 2017 and 5.6 cents last year.
While frustration with yet another increase will likely be directed at politicians for these increases, Californians should look in the mirror when assigning blame. It was voters who declined to repeal the tax at the ballot box in 2018 when they had the chance.
When SB 1 was passed by the Legislature and signed by then-Governor Jerry Brown in 2017, it was promised that the new taxes would raise $50 billion over 10 years.
But at the time, California, through years of neglect of road maintenance by Sacramento politicians, had a backlog of road repairs of $130 billion.
Even with the money from SB 1, another $80 billion is needed to even catch up with the current needed repairs. And that estimate of repairs was in 2017 and it has surely grown since then. So, will we ever catch up to the need or, will the problem only grow worse?
Adding to that problem, California’s drive to eliminate vehicles that run on fossil fuels-namely, gasoline and diesel-sometime in the not-too-distant future will mean less in gas taxes for roads, even though electric cars will use them and cause just as much wear and tear. Is another tax on the horizon?
For the moment, the number one economic problem is getting California up and running again and a gas tax increase will be just one more impediment to achieving that goal.
While the political view might be that such a small increase won’t overburden California drivers, it is the cumulative effect of more taxes that hurt the most – especially to those who can afford it the least.
As reported in the Los Angeles Times recently, some legislators want to delay the hike because of the COVID-19 outbreak.
Assemblyman Vince Fong (R-Bakersfield), Vice Chairman of the Assembly Transportation Committee, said the increase “further rubs Sacramento salt into the wounds of California residents who are struggling with uncertainty and real financial pain” during the coronavirus crisis.
Assembly Republican Leader Marie Waldron of Escondido said it was “inconceivable” that the state would raise costs on Californians at this time. “Unemployment continues to rise and all the ways California was unaffordable prior to the pandemic still exist — suspending the gas tax increase is the least that could be done,” Waldron said.
Their pleas for tax relief appear to be falling on deaf ears as the majority Democrats and Governor Newsom are unmoved by these appeals to reason.
According to a new study by the Community and Labor Center at the University of California Merced, “The economic problems in California are much deeper than most of the rest of the country.”
Only New York is worse off than California when it comes to economic recovery. For low-income workers the situation could be dire.
For this large group, the gas tax increase will be just one more cost added to their burden. They have been particularly hard hit by the shutdown of the state and can ill afford an increase in their fuel costs since they are more likely to have to travel farther to reach their jobs when and if those jobs come back.
The pandemic caused recession is receding in many states and the lower fuel costs that have resulted from the coronavirus shutdowns will help those states recover faster.
But by increasing fuel costs at this critical time, when it comes to this recession, California was the first one in and could likely be the last one out.
And the recovery may very well be a long time coming.