California Governor wants to pass a massive $3.6 billion tax plan on autos

On the heels of the announcement by Chicago Mayor Rahm Emanuel that he will seek the largest property tax increase in modern Chicago history, California Governor Jerry Brown says he wants a huge increase in the gas tax and a user fee on automobiles. Combined, the measures are supposed to bring in $3.6 billion.

SFGate:

California drivers would pay $65 a year in a new highway user fee plus higher taxes at the gas pump under a $3.6 billion plan Gov.Jerry Brown is pitching to help fix the state’s roads, bridges and highways.

The Brown administration shared the plan with Republican leaders Thursday morning. It requires a two-thirds majority vote in the Legislature because of the new taxes, and it has several elements meant to appease Republicans andDemocrats. However, the plan will be a tough sell, particularly to Republicans.

The administration’s plan would create a highway user fee of $65 per vehicle, which would generate $2 billion and could be assessed during vehicle registration. Another $1 billion would be generated by raising the gas tax by 6 cents per gallon and the diesel tax by 11 cents per gallon. Those taxes would continue to rise based on the Consumer Price Index. The state would take $500 million from cap-and-trade revenue and $100 million from reducing the Department of Transportation’s budget and use it for road repairs.

That 11 cent hike in the diesel gas tax would greatly affect the short haul trucking industry in California. But the doubling of vehicle registration fees is a regressive tax that smacks the poor and lower middle class hard. The same holds true for the 6 cent increase in regular gas as studies have shown poor people must drive farther for work. 

California already has the highest gas tax in the US. The notion that making it even more expensive to own a car and drive will bring in the projected $3.6 billion is a fantasy. People will simply drive less - or not at all - in order to avoid the tax grab by the state. 

In the end, everyone loses.

On the heels of the announcement by Chicago Mayor Rahm Emanuel that he will seek the largest property tax increase in modern Chicago history, California Governor Jerry Brown says he wants a huge increase in the gas tax and a user fee on automobiles. Combined, the measures are supposed to bring in $3.6 billion.

SFGate:

California drivers would pay $65 a year in a new highway user fee plus higher taxes at the gas pump under a $3.6 billion plan Gov.Jerry Brown is pitching to help fix the state’s roads, bridges and highways.

The Brown administration shared the plan with Republican leaders Thursday morning. It requires a two-thirds majority vote in the Legislature because of the new taxes, and it has several elements meant to appease Republicans andDemocrats. However, the plan will be a tough sell, particularly to Republicans.

The administration’s plan would create a highway user fee of $65 per vehicle, which would generate $2 billion and could be assessed during vehicle registration. Another $1 billion would be generated by raising the gas tax by 6 cents per gallon and the diesel tax by 11 cents per gallon. Those taxes would continue to rise based on the Consumer Price Index. The state would take $500 million from cap-and-trade revenue and $100 million from reducing the Department of Transportation’s budget and use it for road repairs.

That 11 cent hike in the diesel gas tax would greatly affect the short haul trucking industry in California. But the doubling of vehicle registration fees is a regressive tax that smacks the poor and lower middle class hard. The same holds true for the 6 cent increase in regular gas as studies have shown poor people must drive farther for work. 

California already has the highest gas tax in the US. The notion that making it even more expensive to own a car and drive will bring in the projected $3.6 billion is a fantasy. People will simply drive less - or not at all - in order to avoid the tax grab by the state. 

In the end, everyone loses.