Dan Walters: Legislature ducking debate on big fuel price hike

08/07/2014 4:05 PM

08/09/2014 7:02 PM

When the Legislature adjourns this month, it will likely leave Assembly Bill 69 still sitting in the Senate Rules Committee, thereby avoiding an election-year debate on whether California motorists should cough up billions of extra dollars when they buy gas.

The measure, introduced by Assemblyman Henry Perea, D-Fresno, and backed by quite a few other Democrats, would delay putting fuel under the state’s cap-and-trade system of reducing greenhouse gases.

If the Air Resources Board has its way, that will occur in January. The money that refiners will be paying the state for automotive emissions will translate into higher costs for motorists already paying some of the nation’s highest fuel prices.

How high?

Nobody truly knows. The Air Resources Board’s own data indicate a range of 15 cents to 70 cents a gallon more. The Legislature’s budget analyst, Mac Taylor, says in a letter to Perea this week it “likely will be 13 cents to 20 cents per gallon, but could be higher” and “could exceed 50 cents a gallon by 2020.”

There’s a lot of money at stake. With motorists buying about 1.2 billion gallons of gas each month, even a 15-cent increase would generate $2 billion-plus a year.

Perea and his supporters contend that higher gas prices would be a big burden for working-class and poor motorists.

However, environmental groups and their allies dismiss his bill as an oil industry ploy to avoid regulation and counter that with fuel prices constantly rising and falling anyway, the impact would be minimal.

A 15-cent increase for a motorist driving 15,000 miles a year in a car getting 20 miles to the gallon would translate into $112.50 per year in additional cost.

That may not be a big burden for those in upper income brackets, but could, as Perea argues, be a painful bite on the poor.

Earlier this year, Senate President Pro Tem Darrell Steinberg proposed an alternative tax on carbon emissions with rebates to low-income families, but it went nowhere. Meanwhile, a recent poll indicates that if it drives up gas prices, most voters would oppose placing fuel under cap and trade.

There is a corollary impact, at least potentially.

California’s highways are in dreadful shape and need hundreds of billions of dollars in maintenance and reconstruction. Boosting motorists’ costs by more than $2 billion a year without the money being used for highway work would make financing vital repairs even less likely.

Given the heavy financial impact of placing fuel under the cap-and-trade program, it should face legislative scrutiny and direct up-or-down votes, rather than being imposed by an unelected board.

Were AB 69 to die without even a hearing, it would be another example of how the Legislature has cravenly ceded its policymaking duties to others, whether they be initiative sponsors, judges or bureaucrats.

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