Monday, March 8, 2010


Man, it just never stops! With the state in financial crisis and the people of California taxed to the maximum, the Democrats in Sacramento have found a way to cure the states deficit problem for this year. They have just approved raising the gasoline excise tax by as much as 17 cents per gallon.

"Wait a minute" you say, "the Republicans must be at fault too? The California Constitution requires a 2/3's majority to pass a law changing the tax rate, right?" Well, no, apparently not this time. You see, the Democrats in Sacramento have taken a page out of the Federal play-book and found a way to get around that with a legislative procedure much like the reconciliation nonsense used in Washington on the Health Care Bill. They have found a way to raise the excise tax without a 2/3 majority! What they did was swap taxes. They eliminated the sales tax on gasoline and replaced it with an excise tax. The sales tax is a percentage of the total sale price but the excise tax is a fixed fee so even if the price of gasoline goes down it can stay the same or even go up. The beauty of this, for the Democrats, is that they can now raise this excise tax whenever they need to raise revenues!

Californians already pay more for gasoline than anywhere else in the country thanks to the "clean-air" restrictions the Assembly put on the refineries. The Democrats say you will not notice an increase at the pumps but some financial experts are estimating an increase of as much as 17 cents per gallon! This is going to hit every job holder that drives to work every day right in the old pocket book. It will mean that truckers will have to charge more for delivering goods. It will mean that farmers will have to pay more for getting their produce to market, so you will be paying higher prices for you groceries. Companies will spend more money on transportation (and have less to spend on salaries).

As justification for this slick piece of legislative fast-of-hand, Assemblyman Mike Eng (D) said this will provide s stable source of funding for transit agencies to keep the buses running. "The one thing bus riders want is certainty." Eng said. "If they are out there waiting for the bus to come, it will come."

The problem with your logic Mr Eng, is that while you may be giving he transit agencies a stable funding to keep their drivers employed, you are doing it by raising the price of fuel so they won't be able to afford the gas to drive the buses to go get those riders! Transit agencies will reduce the routes and frequency of routes to compensate for the higher cost of the fuel. Your bus riders are going to be stuck out in the rain anyway (along with the rest of us tax-payers in California).

These Democratic Assemblymen have no idea of the negative impact their little usurping of the California Constitution is going to have on the state. They may have cured the deficit for a year, but they have taken us a giant step closer to bankruptcy and depression.

No comments: