Editor’s note: The Business Journal requested that the Howard Jarvis Taxpayers Association pen an op-ed in support of Proposition 6 because a Long Beach agency had been scheduled to provide us with an op-ed in opposition to the ballot initiative. That local agency withdrew at the last minute. It was our intention to run editorials in support of both sides of the issue, but because of this development, which occurred just as we were going to press, we were unable to do so. However, see Staff Writer Pierce Nahigyan’s Page 1 news story in this edition for an informative, factual piece featuring interviews with individuals who have divergent perspectives on the matter.
It’s always a brand new day to the advocates of higher taxes. See a problem? Propose a new tax! How else is government supposed to work?
That was the argument last year for passing Senate Bill 1, a 12-cent increase in the tax on a gallon of gasoline, 20 cents on diesel, and $25-$175 on vehicle registration, said to be needed because the condition of our roads and freeways is terrible.
Lost in the discussion is the fact that Californians were already paying more in taxes than the residents of other states and getting much less for our money.
Before last year’s massive tax hike, Californians paid the fifth-highest gas taxes in the nation, yet our roads are among the worst of any state. The backlog of road and highway repairs was estimated at $130 billion.
General fund spending rose from $86 billion in fiscal year 2011-12 to nearly $139 billion currently, and none of that increased spending went to transportation. The defenders of SB1 now say the condition of our roads is a threat to public safety. Why wasn’t the budget prioritized to pay for essential road repairs every year?
It’s no wonder that nearly a million outraged California voters signed petitions to put the repeal of the gas tax increase on the November ballot. Proposition 6 would repeal SB1 and require voter approval of all future increases in gas and car taxes.
Adding insult to injury, the state is illegally using taxpayer funds to campaign against Proposition 6. Federal transportation officials just told Caltrans to change the roadside signs that advertise SB1 funding of future projects. The website address of a campaign-style site will be deleted from the signs, again at taxpayer expense.
In the debate over Proposition 6, opponents understate the impact on the cost of living that results from these tax hikes. A recent study by the California Policy Center exposes just how punishing last year’s tax increases are for middle-class Californians and why they should be repealed.
According to the analysis, the gas tax and car tax hikes will impose on an average two-car family at least $1,500 in taxes a year. When adjusting for the “average” tax rate, a two-car “average” family must earn almost $2,000 in pre-tax earnings just to pay their California car and gas taxes.
The news for low-income families is even worse. A typical two-car low-income family may pay $1,800 in taxes a year. Because low-income families are in a lower tax bracket, that two-car low-income family still must earn almost $2,000 in pre-tax earnings just to pay their California car and gas taxes.
According to the study, using the most conservative modeling, the latest gas tax and car tax hikes alone will force a family of four to pay anywhere between roughly $650 and $800 more in tax and living expenses – depending on commute and consumption of goods and services impacted by fuel prices.
This tax increase wasn’t necessary. State lawmakers have an obligation to prioritize the budget to meet critical public safety needs, including the maintenance of our roads and highways, ahead of other spending. It’s wrong to let the backlog grow and then cite it as an excuse to raise taxes.
California voters should say yes to Proposition 6.