This week, the California Legislature will consider Assembly Bill 8, a massive $2.3 billion car tax increase. In better days, a tax increase this large and this unpopular would stand little chance of passage because virtually all Republicans and a handful of moderate Democrats could be counted on to stand up for taxpayers.
But things are not as they once were. Up to a dozen Republicans have already signaled support for AB 8 or its companion measure in the Senate, SB 11. Some of these members, including a few who have previously received an “A” grade on HJTA’s report card, tell us that the nine year tax increase is the best “deal” for taxpayers they can get. It is not. There is always the choice to stand and fight for taxpayers rather than capitulate to government bureaucrats and rent seeking business organizations who rarely advocate for the broader interests of taxpayers.
The crux of the matter is this: should unelected government entities like the California Air Resources Board (CARB) be able to impose strict mandates on diesel truckers and the petroleum industry and then force all taxpayers to pay for them? AB 8 would increase by millions of dollars annually the amount the state provides to assist truckers with diesel engine retrofits. Without these expensive upgrades, they will eventually be forced out of business, leading to lost jobs and declines in economic output. Stated another way, should Republicans buy into the extortion by sacrificing all taxpayers to obtain needed regulatory reform?
CARB has also imposed a regulatory mandate on the petroleum industry, forcing them to fund various alternative energy projects like a “hydrogen highway,” a series of hydrogen fuel pumps across the state. AB 8 suspends this burdensome mandate, much to the relief of Big Oil. Of course, all this really means is that taxpayers will instead be on the hook to fund a hydrogen car infrastructure program few will ever use, to the tune of $200 million over the next nine years. Other programs the funds could be spent on include costly biomass energy facilities and vehicle rebates for electric cars like the Nissan Leaf.
A powerful coalition of environment regulators, the trucking industry, business associations and petroleum interests have made the deal to protect what’s theirs. But working Californians get stuck with a $2.3 billion bill, a hydrogen highway, heavily subsidizing thousands of electric car and diesel truck upgrades, and other alternative energy projects. We’re surprised many Republican legislators think this is the best “deal” to be had. We suspect that voters in their districts might be equally surprised.
As an alternative to this deal with the devil, all of us who are not on the government side of the ledger should make the logical case for the regulatory relief without socking it to taxpayers. If Governor Brown and some Democrats are as serious about California’s economic climate as they claim, let’s call their bluff. Rational regulatory reform should not be held hostage by a $2.3 billion dollar tax increase. Regulations should be repealed when they serve no logical purpose or become unbearably burdensome.
Republicans should, if nothing else, be fearful of the template they are creating. If government regulators, environmental extremists and liberal politicians looking for their next shakedown targets get away with this drill, expect more of the same. A lot more.
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.