In the state of California, taxes are highest in the nation to compensate for its huge number of roads and infrastructure. California also has the highest income tax in the country, which is becoming an uprising issue. But before we get into taxes, let’s talk about the state itself. California is the most populous state with the largest economy of $2.8 trillion in the United States and the fifth largest economy in the world. Agriculture, science, technology, tourism, and trade are the major sectors which fuel California’s progress. The most familiar cities in California, Los Angeles, and San Francisco area are the nation’s second and fifth-most populous urban regions with 18.7 million and 8.8 million residents respectively, according to Wikipedia. Long Beach, Oakland, and Los Angeles ports are three of the top five busiest ports in the country. California is also considered a deep blue Democratic state and is one of the “big three” democratic states in presidential elections alongside New York and Illinois.
Furthermore, the main focus of taxes, is too generate funding for California’s poor infrastructure. In order to do so, California Governor Jerry Brown and California state legislation introduced Bill 1. In 2017, California State Legislature passed Road Repair and Accountability Act (RRAA). The bill placed a 12 cents per gallon on gasoline and 20 cents per gallon increase tax on diesel fuel. California drivers pay $3.05 per gallon for gas vs $2.26 of other states. The car registration fee increased between $25 to $175, depending on the model of the vehicle. This bill is designed to invest $5.4 billion into California transportation infrastructure. The bill also gives power to the state legislature to increase the tax in the future without a public vote. The tax on gasoline could rise to 19 cents per gallon by 2019. Some Californians are unhappy with this bill because of increasing taxes, it also increases the cost of living as diesel fuel hike impacts grocery distribution to different areas of the state.
Moreover, this bill was designed due to the fact that California’s roads and bridges are in poor condition and received a “D” grade by American Society of Civil Engineers. Twenty-three states including both blue and red states have increased their gas taxes in order to pay for their increasing transportation cost. The tax bill will cost average California driver $117 per year. It is important to note that more cars are becoming electric or hybrid since 1994 to reduce gasoline consumption which has hampered California’s public project. However, in 2018 November ballot Proposition 6 was created by the Republican party, to repeal this 2017 tax bill and reduce gas taxes on residents. The backers of Proposition 6 collected enough signatures of registered California voters to qualify it as a ballot measure. Chairman for Yes on Prop 6, Carl Demaio argued that gas tax is costing families an average of $750 to $800 a year. Another prominent Republican, Harmeet Dhillon strongly favors Prop 6 initiative to reduce tax on middle class, he is also against the outmoded and over budget ‘bullet train’ fantasy of Governor Brown.
Prop 6 soon became a political tug of war between California political parties to impose their views on voters in election day with the final aim to win the house of representative majority seats. Republican candidate for governor, John Cox was quick to promote yes on prop 6 to gather votes from the conservative base. John Cox Stated “repairs and improvements to California’s transportation infrastructure could be funded through improving efficiencies at Caltran.” On the other hand, Gavin Newsom, the Democratic governor candidate said Cox’s plan would damage transportation system which is already deficient. Newsome also called Cox’s plan to increase Caltran efficiencies “illusory”. Major opponents of Prop 6 also included Governor Jerry Brown, and former LA mayor Eric Garcetti both from the Democratic party.
It is important to re-emphasize the wording of prop 6 which causes confusion for many voters, Yes on prop 6 would repeal 2017 tax increase and more importantly would prevent the future tax hike on gas and vehicle registration without a public vote. In contrast a No vote will leave 2017 gas tax intact and allows the future increase in the hands of California assembly members without voters approval. De maio a prop 6 supporter blamed “false and misleading ballot title” that saw created by Attorney General Xavier Becerra for the downfall of measure. The Prop 6 title says “Eliminates Recently Enacted Road Repair and Transportation Funding” but does not mention it repeals a gasoline tax. Republicans admit this measure was drafted to increase voter turnout, which has been a problem lately.
On Nov 6, 2018, Prop 6 was rejected by California voters, a major victory for Democrats and a blow to Republican Conservative voters. The final election results were 43% yes to 57% No. Democrats and union leaders agree that $5 billion a year incline from taxes are vital to upgrade crumbling roads and bridges. “California voters were not fooled,” Said Brian Rice, president of California Professional fighters.
Furthermore, the idea of state legislatures ability to increase taxes in future without voter approval is very bothersome. Gas tax could increase again in a few years which will be devastating to average families. This action is totally against the fundamentals of democracy and leaves the fate if the state in the hands of Governor few state legislatures in Sacramento. Approximate 7 to 8 hundred dollars of saving which was created by Republicans (one to two hundred by Democrats) can be reinvested into the economy with snowball effect to improve living conditions, for example, lower grocery products and public transportation.
Overall I think California residents are overtaxed. Instead of attracting wealthy individuals and companies, heavy tax system and the high cost of living is moving individuals out-of-state. As a college student, my commute to school will be influenced by higher gas costs and car registration, but I am sure middle-class families will all be hampered as well. Before gas tax hike California had the fifth highest gas tax in the nation, in combination with the nation’s highest income and sales tax was simple to visualize the great resident outflow.
Obviously, we must correct the condition of our transportation system but I believe there are other more reasonable and productive ways to achieve this goal. First of all the working families should be protected from unnecessary taxes and expense while working taxpayer population must increase by taking people out of welfare. 34% of the nation’s welfare recipients live in California which consists of 12% of us population. Addition of a couple of million workers to the workplace will take the pressure off the middle-class work engine of the economy. Many social programs in California provide care to needy individuals such as Medical, Calfresh, and Calworks, which must be protected but must work more efficiently to provide care only to needy individuals and not the general public. Prop 6 proponents estimate $5 billion income from the gas tax increase, but California paid $103 billion in welfare in 2017!
This brings us to the conclusion of this report which analyzed the impact of adding a new gas tax on the economy in the great state of California. Prop 6 is not the simplest initiative to understand on the ballot but it carries a huge burden on everyday working people of California. I believe conservatives had the right idea, but because of the unpopularity of the Republican party and in particular president trump the measure did not get public approval. Also, wording on the ballot implicated raising taxes by saying “Yes” was confusing to me as a college student. Majority of the public perceived “No” as no new taxes.
My position is no new taxes while maintaining an efficient compassionate place to live. We must look back at our history and examine what prompted California to be the golden state, a business-friendly environment with leading numbers in economy and population.
Wikipedia, “California Proposition 6” https://en.wikipedia.org/wiki/2008_California_Proposition_6
The San Francisco Chronicle, Oct 16, 2018 “Vote No On Prop 6- Funding Needed For California Road and Transit”
Schuner, Dan. The Sacramento Bee, Sept 24, 2018 “Voters want a gas tax repeal. Many California leaders call it a horrible idea” https://www.sacbee.com/latest-news/article218823065.html
KQED News, “Governor Debate” Oct 8, 2018
San Diego Union Tribune, July 28, 2012
Langlois, Shawn, Market Watch, Nov 28th, 2017.
Wood, Robert, July 16th, 2018, Forbes, “Millionaires Leaving California Over Taxes Is Nothing New”https://www.forbes.com/sites/robertwood/2018/07/16/millionaires-leaving-california-over-taxes-is-nothing-new/