Panel Guts GOP Plan to Kill Gas Tax

California Republicans’ plan to kill the state sales tax on gasoline as a way to combat steep prices at the pump met its first test Monday in the state Assembly’s Revenue and Taxation Committee--and that’s as far as it got.

In a lengthy hearing where decorum quickly dissolved into bickering, Democrats hijacked a bill by Assemblyman Tony Strickland (R-Thousand Oaks) intended to repeal the sales tax , turning it into legislation to immediately study ways to reduce gas prices.

“We have to take a look at a number of measures,” said Assemblywoman Gloria Romero (D-Los Angeles), who led the charge to gut Strickland’s bill.

Though they fully expected Democrats, who opposed the tax repeal, to exercise their majority power to quash it, Republicans were bitter nonetheless. They vowed to force a debate on the Assembly floor when the changes introduced Monday go before the full house.

“I am disappointed with the hostile amendments,” Strickland said. “I don’t think this should be a partisan issue. . . . My fight does not end here. I am going to keep fighting.”

As gasoline prices have soared in California, reaching $2 a gallon or more in some parts of the state, so have proposed solutions and partisan rhetoric in Sacramento.

GOP lawmakers struck first by proposing to eliminate the gas sales tax, arguing that families “should not have to choose between a gallon of milk and a gallon of gasoline.” Such a cut would shave about 15 cents in taxes for every gallon of gas and deplete state coffers of more than $1 billion a year.

Assembly Speaker Antonio Villaraigosa (D-Los Angeles) answered with a proposal to temporarily reduce the tax through summer. But Villaraigosa, who is nearing the end of his term as speaker, failed to ask his colleagues whether they supported his idea before floating it in the press, causing a stir among Democrats in the lower house.

They did not support it, as became clear last week, when Assembly Speaker-elect Bob Hertzberg (D-Sherman Oaks) and 21 other Democrats unveiled their own proposal: an excess profits tax on oil company “barons,” whose “greed” they blamed for the rising prices.

Gas prices in California and the nation, meanwhile, appear to be cooling off. The average nationwide price for self-serve regular gasoline has fallen half a cent to $1.50 a gallon, while the California average for self-serve regular dropped nearly two cents to $1.77 a gallon, the Energy Information Administration said Monday. The agency, the statistical arm of the U.S. Energy Department, conducts a weekly survey of 800 gasoline stations to come up with the averages.

But those price drops were not a subject of discussion during Monday’s hearing. Democrats and Republicans were focused instead on their strongly differing opinions of how to fight a rise in gas prices, and on the experience of Connecticut, which has cut its tax.

Republicans seized on figures showing Connecticut gas prices had dropped immediately after the tax was cut, while Democrats focused on the figures from the same source showing prices later went back up, exceeding pretax levels.

“It’s a fact that we could eliminate the sales tax and the oil companies could raise the price as much as they wanted,” said Assemblywoman Elaine Alquist (D-Santa Clara).

GOP lawmakers agreed that any long-term solution requires targeting the oil company “cartel” that controls the handful of refineries in California. But Assemblyman Keith Olberg (R-Victorville) said there are no examples in “the history of western economics” where a tax raise, such as one on oil companies, had resulted in lower prices.

“I’m more than a little disheartened,” Olberg said, calling a study of the issue “meaningless.”