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Jon Fleischman

Assembly GOP United Against Big Tax Hikes (But Apparently Not Little Ones)

Prior to the passage of Proposition 26 last year, because of a court decision, many revenue streams approved by the legislature that you or I would call a tax, were instead called a “fees” (when there is a nexus between where the revenues are coming from, and what that money is being spent on).  Using the nexus “loophole” a great number of taxes were passed, as under this scheme, a “fee” only required a simple majority vote, not the two-thirds vote required for a tax increase.  Proposition 26 slammed shut this loophole, and so all taxes are actually considered taxes, and take a two-thirds vote of the legislature to enact.

Enter into the picture Assembly Bill 291, authored by liberal Democrat Assemblyman Wieckowski.  This legislation has to do with a tax that hits primarily gas station owners – where every owner of an underground petroleum storage tank is required to pay a per-gallon fee that goes into an Underground Storage Tank Cleanup Trust Fund.  While it is a bit complicated to go through the formula for computing the current per-gallon tax, the issue here is that the legislature in a previous year hiked this tax on gas station owners by $.006 per gallon of petroleum between January 1, 2010 and December 31, 2011.  Without any action from the legislature, this additional tax would end at the end of this year.  AB 291 would extend this tax increase for two more years.

Taxes paid by gas station owners are passed along in the form of higher prices at the pump..

Needless to say, this per gallon tax is ultimately passed onto the consumer in the form of higher gas prices – as if gas prices aren’t high enough already.  So here is a ready-made opportunity for Republicans to block Wieckowski’s bill, and allow this tax to sunset at the end of the year.

That having been said, last month, this tax increase (albeit a pretty small one) sailed out of the State Assembly with 62 aye votes.  Joining with Democrats, and violating the no new tax pledge that they signed were Republican Assemblymembers Bill Berryhill, Connie Conway, Paul Cook, Martin Garrick, Dan Logue, Jeff Miller, Brian Nestande, Chris Norby, Kristen Olsen, Jim Silva, and Cameron Smyth.

The good news is that in the State Senate, AB 291 got no GOP votes in its first policy committee meeting.  If Republicans in the Senate can rally, they can stop this tax increase from getting to Governor Brown’s desk.

I realize that in the scheme of the state budget situation, this little tax doesn’t amount to much, but as a matter of principle, Republicans don’t say we are the party that oppose big new taxes, but that we oppose all new taxes.  Our actions should match our rhetoric.  The reality is that if a gas station owner needs to repair a leaky tank, they should do so and if they want or need to they can pass along their costs to their customers.  If station owners want to pool funds in order to share risk, that should be their own private contractual relationship between them.

In closing, given that the LAO’s office scored AB 291 as a tax increase, and thus it requires a two-thirds vote for passage, one has to assume that every GOP legislator who voted for this bill did so knowing that they were voting to extend a tax on gas station owners.  Very disappointing.  Hopefully this bill will have a different outcome in the State Senate.

Politically, it leaves a host of Republican legislators open to a documented vote for a tax increase that can be used against them in their next contested primary.  Whoops.