The Car Tax Increase is Back Again

One would think that the passage of Proposition 30 — giving California the highest income tax and sales tax rates in America — would have momentarily satiated the appetite of our governing political class before they continued their assault on hardworking California taxpayers. But there is no rest for the wicked. In a matter of days our Legislature will launch a new attack on all Californians who drive a car.

In an unusual procedural maneuver Assembly Bill 8 (Henry Perea) has already been set for a committee hearing. This is odd since it is so early in the legislative session and strongly suggests to us that the skids are greased for this pernicious piece of legislation.

The bill would increase or extend $2.3 billion of fees on car owners until 2023. These include smog abatement fees air quality management district fees vehicle and boat registration fees and new tire fees. Cumulatively the impact to citizen taxpayers will be at least $20 per vehicle annually.

Many of these fees were originally approved in 2007 for the purpose of funding technologies to limit air pollution including the construction of a hydrogen highway. But here’s the real insult: Like Proposition 30 revenue itself which we were told — ad nauseum — would be going to schools money from this car tax hike are likely to end up in the black hole of the general fund. (Translated that means government employee pension benefits).

Politically our fear is that “the fix is in.” This same bill was only narrowly defeated last fall despite the fact that five Republicans voted for it. But why would any legislator who is a member of the party which holds itself out as the fiscally responsible player in the room support a multibillion tax increase? Simple: In the naí¿ve belief that something positive — regulatory relief for industry — is worth the trade.

AB 8 would remove some of the most outlandish and counterproductive regulations on the diesel trucking industry. If regulatory reform was all that AB 8 was about this would be the classic no-brainer. But political deals in Sacramento — especially now that the tax-and-spend interests control both houses by a two-thirds margin — don’t come without a price. And so the victims here are citizen taxpayers who don’t have nearly the lobbyist firepower (or campaign contributions) as do specific special interests.

Even if this “deal” were worth it as a matter of policy the majority party has a horrible track record in keeping its promises and shouldn’t be trusted. For example these very fees were supposed to disappear by 2014. But now we’re being told they should be extended until 2023. And who’s to say that once the tax hike is in place the harmful diesel truck regulations won’t be immediately reinstated. After Democratic leadership reneged on the deal with Republicans to put a spending limit measure on the ballot in 2012 any Republican who even considers supporting AB 8 is delusional.

Let’s be clear. The diesel regulations which are crushing the trucking industry and inflicting enormous harm on the California economy need to go. But hitting citizen taxpayers — who are now leaving California in record numbers — is not the answer.

With the beginning of the legislative session 120 lawmakers have a new opportunity to start doing the right thing by reducing job killing regulations without charging car drivers in return.

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.