Cannella, Olsen: Hidden double-digit gas tax would affect Central Valley the most

04/24/2014 8:44 PM

04/25/2014 9:23 PM

Over the past month, we have seen an astronomical jump in prices at the pump. Unfortunately, we will see those prices rise higher unless state government takes action now.

The California Air Resources Board has been working to implement what amounts to a new “hidden” gas tax on unsuspecting Californians. If we don’t stop this proposal, in just a few months, we’re all going to be paying at least 12 cents more per gallon of gas.

If this is the first you’re hearing about it, you’re not alone. This is an extension of a CARB program related to climate change that aims to reduce greenhouse gas emissions by capping emissions produced during many industrial processes.

While most of these costs are borne by industry, some will result in higher consumer costs. This latest regulation will apply directly to transportation fuels, including gas used in our cars.

It is projected we’ll be paying about 12 cents more per gallon, but because the carbon credit market is so volatile it could increase to as much as 40 cents per gallon. And that’s on top of the 71 cents per gallon we already pay in state and federal taxes – already the highest in the nation.

While this hidden tax is going to hurt everyone, it’s going to negatively impact our Central Valley region the most. Those in rural areas, people who typically have to commute farther from home to work are hit harder by gas price increases. According to a recent study by The Next Generation, a nonprofit public policy organization based in San Francisco, people in rural areas spend 46 percent more on gas annually.

But it’s not just rural residents. Increasing the cost of gas is extremely regressive – it hurts low-income residents more than others. In fact, according to the same Next Generation study, 19 percent of a low-income family’s budget is spent on transportation costs. Those who can least afford it end up paying the most.

In the Central Valley, these two demographics often overlap; we are a rural area and we have some of the highest unemployment rates in the state. That means that in some areas, transportation costs are 40 percent of the median income. Increasing the cost of gas by 12 cents or more will only make this worse.

There is a sad irony to this new gas tax hike. Assembly Bill 32 was supposed to be groundbreaking legislation to curb greenhouse gas emissions and to push people to buy more fuel-efficient cars that emit fewer pollutants.

But the Next Generation study says raising gas prices “can end up putting efficient vehicles even further out of reach for low-income consumers.” Why? Because as demand for those cars goes up, so do the prices. But prices for pickup trucks and other “gas guzzlers” decrease by more than $2,000.

We are still struggling to get out of this recession, especially here in the Central Valley. A 12-cent or more per gallon increase on the cost of gas will devastate our region and do little to curb greenhouse gas emissions. Instead, it will force more and more low-income residents to hold onto their older, less fuel-efficient cars because they simply won’t have the money to invest in new, fuel-efficient cars.

Right now, there’s no stopping this increase. It is slated to go into effect Jan. 1.

We hope our colleagues work with us to find a solution that doesn’t plunge our region and state back into another recession that might be as unpredictable and permanent as the higher prices we’re going to pay at the pump.

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