Still reeling from the economic recession, Modesto and its surrounding cities face an unemployment rate around 10 percent, nearly double the rest of the state. More than 40 percent of Modesto’s population has an annual household income of less than $40,000, making our area among the poorest in the state.
Like many San Joaquin Valley towns, Modesto continues to struggle with a depressed economy and higher-than-average housing foreclosure rates.
To further complicate any recovery, a gasoline tax increase of 16 to 56 cents a gallon is going into effect this coming January.
With the goal of reducing greenhouse gas emissions, the California Air Resources Board, an unelected regulatory body, has decided to raise the price of gas in January through the cap-and-trade program. This program was designed to combat climate change by charging carbon emitters for the pollution they create. It was not intended to generate billions in new revenue for CARB. Yet the new “tax” will add $2 billion in taxpayer dollars to the state’s coffers in 2015 alone. And while gas taxes are usually dedicated to road maintenance and repair, this tax won’t do a thing to repair our aging roads.
California already has the highest gas prices and second-highest gas taxes in the country – 68.1 cents, compared to New York’s 68.9.
Is this really the time to add more to our tax burden?
In the Valley we rely heavily on our personal vehicles; our other transportation options are limited. An estimated 81 percent of the population commutes to work and school, driving alone in private cars because they lack mass transit options.
CARB is using the “logic” that if gas prices increase, consumers will reduce their fuel use to save money, which will in turn reduce greenhouse gases. CARB is conveniently ignoring the fact that fuel here isn’t a luxury, it’s a necessity, and buying gas is no more optional than buying food.
An examination of these additional costs being passed through to consumers foreshadows disastrous consequences, according to a study by Encina Advisors, a Davis-based research firm. We can count on losing 18,000 jobs and $2.9 billion of economic output if the price increases by just 10 cents per gallon. If prices rise as high as some have speculated – up to 50 cents per gallon – imagine the economic devastation.
Quite simply, our economy cannot withstand the costs or the ripple effect this regressive tax will most certainly cause. The poorest families are the ones who will suffer most.
Why? Because the most widespread job losses will be felt across the service sector, with tremendous impact on food services, retail establishments and health care – the kinds of jobs many of our residents perform.
In spite of these consequences, CARB is forging ahead with its unilateral decision to place vehicle fuels under the cap.
Certainly our Valley CARB members – John Eisenhut of Turlock and Dr. Alexander Sherriffs of Fowler – should recognize the toll this tax will take. As board members, they have the power to ask that this issue be placed on the next meeting agenda to allow public and legislative oversight. We have implored CARB to conduct an impartial evaluation to determine actual costs to consumers. Despite multiple requests, CARB has refused.
Eisenhut and Sherriffs: For the sake of your Valley constituents, won’t you have the courage to ask your fellow board members to put this item on the October agenda?
As a business owner, my costs will increase and at some point I will have to pass along that increase to my customers. The new gas tax could not only end up costing families hundreds of dollars more per year, but will cost even more for businesses in danger of losing customers and jobs due to higher prices.