California’s Gas Tax on Its Way Up

Chris Micheli
Attorney and Lobbyist at the Sacramento government relations firm of Aprea & Micheli, Inc.

In the State of California, there are a variety of sources of funding for transportation purposes, including funding for the state highway system and the local streets and roads system. These funding sources include fuel excise taxes, commercial vehicle weight fees, local transactions and use taxes, and federal funds.

Because of legislation earlier this year, SB 1 (Beall), motorists’ gas taxes will be increased to address deferred maintenance on the state highway system and the local streets and roads system. The base excise tax is 18 cents per gallon and then there is a separate, price-based excise tax of 9.8 cents per gallon, which is a total of 27.8 cents a gallon through October 31.

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Beyond the Fires, What the Napa Valley Wine Economy Can Teach Us

Michael Bernick
Former California Employment Development Department Director, whose newest book is The Autism Job Club (with R. Holden).

In the past few weeks, much has been written about the devastation wrought by the Napa Valley fires, as well as the area’s determination to rebuild quickly. These are important stories, worth continuing to track. But there is another story of the Napa economy that has not received sufficient attention in the fire coverage.

It is a story of a local economy, very different than the other economies of the nearby Bay Area and most of the state. Rooted in the local wine industry, the Napa economy has become one of unusual craftsmanship, environmental stewardship, and a valued local agricultural labor force.  Before the media caravan moves on completely from the Napa Valley, let’s add a few words about these values, and what they can teach those of us outside of Napa.

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The Gas Tax is Going Up—Treat or Trick?

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

How can anyone call a tax increase a “treat?” One would think increasing taxes on an essential product like gasoline is definitely a trick to fit today’s holiday theme.

Of course, whether trick or treat depends on where one stands on the issue. If you are in infrastructure construction; if you believe improvements made to roads will eliminate the need to maneuver around potholes; if you hope that the gas tax will lead to improving your commute, then you might chalk the gas increase up for a kind of “treat”—eventually.

Critics of the gas tax increase certainly believe it’s a trick on commuters who must go long ways to reach their jobs and pay so much more, especially those with lower incomes. Opponents of the bill that raised the gas tax argue that there is hardly any money to reduce the choking congestion in metropolitan areas of the state. They argue that with the billions increased in the state budget recently, roads were ignored. They say that this trick will burn drivers to a point that they will want to rescind it.

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CTA’s Endorsement of Newsom Deserves Scrutiny

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

The biggest news of the governor’s race came and went with relatively little notice: The California Teachers Association endorsed Gavin Newsom for governor.

CTA is the most powerful and sophisticated interest group in state politics. And with their endorsement, Newsom is the all-but-official governor in waiting. For the past 20 years, getting elected governor in California has either required the CTA’s endorsement (Gray Davis, Jerry Brown) or de facto support (which Arnold Schwarzenegger effectively had in 2003, after CTA turned against Davis).

His only significant competitor at this point is former Los Angeles Mayor and Assembly Speaker Antonio Villaraigosa. And CTA will go all out to beat him. Villaraigosa is a former teachers’ union organizer who then battled the union – and has been one of the strongest voices of the state for retaining an accountability system for schools—an accountability system that CTA has successfully dismantled with the collaboration of Gov. Brown and the state board of education.

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Ugly Political Hypocrisy in California 

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

The recent release of Ken Burns’s Vietnam documentary transported me back to the politics of my youth and the ugly hypocrisy of Lyndon Johnson, whose story contains a critical lesson for California today.

It’s no secret that Johnson lied about events in the Gulf of Tonkin and about progress in the Vietnam War as he escalated American involvement to 500,000 troops and prosecuted the war with poor judgments that contributed to the deaths of 30,000 Americans during his presidency and countless more Vietnamese. Less well known is that Johnson — who courageously led the Civil Rights and Voting Rights Acts — discriminated against American minorities and the poor by allowing certain young men to avoid his war through college deferments. Those deferments disproportionately benefited the well-off or well-connected, who were also disproportionately white. I’ve long wondered if LBJ comprehended the hypocrisy —ie, a fighter for civil rights who authorized discrimination — expressed by his actions.

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Small Businesses Haunted by New Taxes and Mandates

Tom Scott
CA Executive Director, National Federation of Independent Business

As many Californians prepare for a night full of fright this Halloween evening, small business owners have much more to fear than spooky costumes and decorations. Our final The Good, The Bad, & The Ugly update of the year illustrates some of the most severe taxes and mandates which are sure to haunt small businesses and working families in the new year. This list identifies legislation which will have the greatest impact, either negative or positive, to the 3.8 million small businesses across California

Unfortunately, not all of these new burdens can wait until January 1 to kick in. At midnight tonight, after a day full of spooky Halloween festivities, Sacramento is sending all Californians the ultimate trick: a 12-cent gas tax increase.

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Brown vs. Issa — it’s about Who Gets the Money

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Gov. Jerry Brown called the idea of eliminating state and local tax deductions from federal taxes “horrible” tax policy. Congressman Darrell Issa in support of the plan argued that the bad tax policy was the California tax increases supported by Brown. The tug of war between Brown and Issa–and between Democrats and Republicans–on state and local tax deductions is more than about tax philosophy—it is about who gets the money.

How often in California have we heard that we must tax the rich so that the rich pay their fair share? The plan put forward by Republicans in Congress to eliminate state and local tax deductions from federal taxes will increase taxes mostly on the rich here, yet state Democrats, led by Governor Brown, object.

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California Gubernatorial Debate Left Big Stone Unturned

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

The San Francisco Chronicle hosted a debate among the four announced Democrats for governor. Based upon the paper’s post-debate editorial, they left a big stone unturned.

A health care provider (the California Nurses Association) has sponsored a bill (SB 562) in the California Legislature to establish what it refers to as a “single-payer” system. But as explained here, SB 562 has little in common with successful single-payer systems around the world. The bill is less about successful universal coverage than about profiteering without necessarily producing better health. It’s as if the sponsors appropriated the phrase “single-payer” to title an “enrich-me” bill.

But from the reporting it appears the moderator didn’t ask about any of that. Likewise, the moderator didn’t ask about other ways universal coverage is provided around the world, such as the successful multi-payer universal coverage systems of France and Germany.

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California’s Fear of Heights

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

Want to spook your neighbors this Halloween? Don’t bother with big displays of goblins, ghouls or ghosts. Instead, just decorate your door with a picture of an eight-story apartment building.

Californians are famously fearless in most things. We devote ourselves to extreme outdoor sports, buy homes near earthquake faults, and launch startups and make TV pilots against all odds. But in the face of tall buildings, especially multi-family residential high-rises, we turn into a bunch of scaredy-cats.

This statewide acrophobia has fueled a historic housing shortage that cuts into our incomes, holds back our economy, drives up homelessness, and forces us into long, unhealthy commutes. In other words, it’s downright frightening what our fears are doing to our future.

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Highest Cost Rental Markets: Even Worse for Buyers

Wendell Cox
Visiting Professor, Conservatoire National des Arts et Metiers, Paris

There is considerable concern about rising rents, especially in the most expensive US housing markets. Yet as tough as rising rents are, the high rent markets are also plagued by even higher house costs relative to the rest of the nation. As a result, progressing from renting to buying is all the more difficult in these areas.

This is illustrated by American Community Survey data for the nation’s 53 major housing markets (metropolitan areas with more than 1,000,000 residents). The range in median contract rent between the major housing markets 3.1 times, with San Jose being the most expensive and Rochester the least. The range in median house values was more than double that, at 6.6 times, between highest cost San Jose and lowest cost Pittsburgh. Thus, house prices in the most expensive markets tend to be far higher in relation to rents than in the less expensive markets.

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