The truth behind California’s hidden gas tax

By Senator Pat Bates
Published in the San Diego Union Tribune
Aug 29, 2016

When Californians pay gas taxes at the pump, we expect that money to go toward California’s roads and bridges. Unfortunately, this is not entirely the case.

According to a letter earlier this year from the nonpartisan Legislative Analyst’s Office (LAO), Californians are paying 11 cents more for per gallon of gasoline (13 cents more for diesel) this year due to the state’s “hidden” gas tax. That means drivers are spending $2 billion more annually for a tax that was never even voted on by the Legislature or voters. It is brought to you by the unelected bureaucrats at the California Air Resources Board (CARB).

I call this tax “hidden” because it is not directly imposed on consumers. Oil suppliers pay this tax first and then pass it on to drivers at the pump. The Legislature never even debated the tax as it gave CARB broad powers in 2006 to make such a decision in the name of fighting greenhouse gases.

California’s drivers already pay the highest average price for regular gas in the nation at more than $2.78 per gallon. As part of that price, we pay the nation’s fifth highest gas tax (state and federal) at more than 59 cents per gallon.

You would think that with the hidden gas tax revenue coming into Sacramento, drivers would be receiving some real benefit. However, the LAO has reported that there is no additional decrease in greenhouse emissions despite state spending. Furthermore, the state is spending billions on greenhouse programs without any metrics or accountability.

Based on information derived from a CARB report, of the $1.5 billion spent to reduce greenhouse gas emissions last year, more than $1.3 billion went to programs with a “to be determined” greenhouse gas reduction estimate. More than 300 of the 418 projects currently funded do not have an estimated greenhouse gas reduction. In one curious example, CARB spent more than $1.5 million to conduct “tree inventories” throughout the state. That is $1.5 million we could be spending to repair potholes.

Worst of all, the hidden gas tax is the biggest ongoing funding source for the high-speed rail boondoggle, a project that will cost at least $64 billion and will burden future generations of taxpayers.

So California’s drivers are paying higher gas taxes for pet projects instead of repairing our roads. Is it any surprise that drivers — me included — are wary of the state’s spending priorities?

So when some in Sacramento say they need more taxes to fix the roads, drivers can be forgiven if they thumb their noses at such a request.

How about we use the $2 billion in hidden gas taxes we already pay to improve our transportation infrastructure instead? I co-authored a bill with Sen. Bob Huff, R-San Dimas, that would have done just that, but Democrats defeated it on a partisan vote last September. I think this is a common-sense idea, and I will keep fighting to make it law.

I have also co-authored Assembly Bill 2066 by Assemblyman Tom Lackey, R-Palmdale, that would inform drivers how much they are paying at the pump due to the hidden gas tax. The notice would be posted at service stations and it would bring some transparency to a tax that many may not know about. The good news is that an Assembly committee recently approved AB 2066, so there is some hope at the Capitol.

Ultimately, the Legislature must provide greater oversight and accountability for how cap-and-trade dollars are spent. As lawmakers start working on the 2016-17 state budget to meet a June 15 deadline, it would be prudent to re-examine CARB’s spending rather than just rubber-stamping it.

Anything less is unfair to the drivers who are paying for a hidden gas tax that they never approved.

Bates, R-Laguna Niguel, is a member of the Senate Transportation and Housing Committee and represents the 36th Senate District in the Legislature, which covers northern San Diego and southern Orange counties.

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