Republicans Seeking to Kill State Gas Tax
With California’s gasoline prices soaring to historic highs, Republicans in the state Assembly launched a crusade to eliminate the state’s 8% gasoline sales tax Wednesday, arguing that workers and families across the state need immediate relief at the pump.
Offering a solution of his own, Democratic Assembly Speaker Antonio Villaraigosa responded Wednesday by announcing that he will introduce legislation to “suspend” the tax through the high-travel summer months, arguing that a permanent repeal would affect crucial funding for roads and highways.
“I think the Republicans’ proposal to repeal the tax is irresponsible,” Villaraigosa said. “It would undermine the entire infrastructure system in this state.”
With high gas prices emerging as a volatile national election issue, GOP lawmakers also introduced a resolution urging the state to support Republican efforts in Washington for temporary repeal of a 1993 increase in the federal excise tax on gas. Republicans have dubbed the hike the “Gore Tax” because Vice President Al Gore cast the tiebreaking vote in the U.S. Senate on legislation to establish it.
Both Republican moves combined would slash 20 cents per gallon off current gas prices, which are hovering as high as $2 in some corners of California, said the anti-tax Assembly members spearheading the push, Tom McClintock (R-Northridge) and Tony Strickland (R-Thousand Oaks). Republicans will try to force a vote on both today in the Assembly.
A study released this week by the California Automobile Assn. found that the state’s average price for a gallon of gas has reached $1.74, 20 cents more than the national average, and that San Francisco’s average of $1.90 a gallon is the highest in any major American city. Nationwide, gas prices are 55 cents higher than they were a year ago.
“The rapid inflation in gasoline prices is pushing families up against the wall,” said McClintock, who is waging a similar populist war to reimburse Californians who paid the state’s so-called smog fee on out-of-state vehicles, which courts have ruled illegal. “None of [the gas tax] goes for our roads. It simply adds to our state budget surplus.”
Some analysts questioned whether the GOP plan will actually do what its proponents say it will. Killing the state gas tax will not address the cause of the problem, said Philip K. Verleger, an oil markets expert with the Brattle Group, a Cambridge, Mass., research company.
Because only a few refineries produce the special clean gasoline mandated by California, the state is especially vulnerable to shortages--and price hikes, Verleger said.
“Consumers will benefit from lower gasoline prices from this proposal some of the time. They will benefit when there is a surplus in gasoline,” Verleger said. “Passage of the measure right now would do nothing for the price of gasoline. That price has to do with the current shortage of gasoline in California.”
Republicans estimated that a repeal of California’s gas tax would cost $1.66 billion--a huge chunk of the state’s budget surplus.
Democrats are leery of the proposal, which comes a year after Republicans floated a partial cut in the tax. They say it would leave the state without an important source of revenue in future years, when budgets might not be so rosy. And some said it could reduce the amount of money available to build and improve roads, which the Republicans have identified as a top priority this year.
Gov. Gray Davis believes the growing gas crisis demands a nationwide solution, said spokeswoman Hilary McLean.
“Certainly Gov. Davis is sympathetic to consumers that are paying more at the pump,” McLean said. “But this is a national problem. He has spoken to the president and Vice President [Al] Gore to see what can be done.”
Not all Democrats are waiting for Washington, however. State Atty. Gen. Bill Lockyer, who has organized a task force on gas prices, is sponsoring three bills attempting to foster competition among gasoline companies and address the short-term petroleum shortages that often lead to price spikes.
A bill by Assemblywoman Carole Migden (D-San Francisco) would kick-start a study on building and financing an oil pipeline from the Gulf Coast. A bill by Assemblyman Kevin Shelley (D-San Francisco) would establish a gasoline reserve in California. And a bill by Sen. Jackie Speier (D-Daly City) would attempt to increase competition among oil companies by limiting their ability to own and operate gas stations.
GOP lawmakers conceded that the problems causing California’s gas prices to rise require long-term solutions, such as tapping new sources of oil and breaking the stranglehold a few companies have on producing the cleaner-burning gasoline required in the state. When those refineries experience problems, history has shown, the effect on California has been extreme.
But they said something needs to be done fast, because families and working people across the nation’s most auto-dependent state are suffering.
Unlike some tax cuts, which benefit the wealthy more than the masses, eliminating the gas tax “is the kind of relief that helps all Californians,” said Assemblywoman Charlene Zettel (R-Poway).
As they continue rising toward the $2-a-gallon mark, gas prices are expected to become a major issue in this year’s presidential campaign.
Texas Gov. George W. Bush is expected to endorse the congressional Republicans’ plan to repeal the excise tax increase, while Gore is expected to oppose it. President Clinton has already weighed in, saying this week that all options--including repealing the increase--need to be considered.
Strickland and McClintock say they intend to ensure that gas prices also are a major issue in Sacramento, vowing to campaign in every lawmaker’s backyard to push for support of their proposals.
“I’m confident that if the Legislature won’t do it,” Strickland said, “the people of California will.”