Governor Brown knows that income inequality is a critical issue facing our state and the nation that urgently needs to be addressed. Thoughtful and experienced as he is, Governor Brown is well aware that such inequity, paired with regressive tax policies, can exact tremendous damage on a struggling economy – particularly on low-income populations. As he acknowledged earlier this week, if “consumers are up to their eyeballs in debt, aren’t making a decent salary, how the heck are they going to buy anything? And if they don’t buy anything, the economy doesn’t go forward and doesn’t work.”
We couldn’t agree more with the Governor. As our state continues its slow and fragile economic recovery, we must be mindful that its success is directly dependent upon the purchasing power of the consumer to move our state forward.
That’s why it is critical for the Governor to seriously consider signing AB 69 (Perea), which will delay the vehicle fuel tax increase set to occur in January as a result of cap and trade. As Californians, we understand the importance of policies that will have positive environmental impacts down the road; but we respectfully ask Governor Brown to consider the immediate economic harm a 16-cent or more per gallon gas tax could inflict on California families right now.
Californians already pay the highest sales and personal income tax in the nation; businesses are adjusting to the new minimum wage increase; and both individuals and businesses large and small are still grappling with the many financial uncertainties and obligations of the Affordable Care Act.
Further, California has the third highest gas prices in the country – but that’s not because we can’t make it affordable. It’s because we have already instituted state and local taxes at the pump, which average nearly 50 cents per gallon – more than any other state besides New York.
Our plate, so to speak, is quite full.
So as we try to get California’s economy back on track, the fuel tax that will be imposed on families and business this January is just simply too much, too fast, too soon and will have significant and inequitable impacts on recovering communities.
Fiscal certainty is a rare thing nowadays in California households, and the timing of a gas tax increase of 16 cents or more per gallon couldn’t be worse. Even more unsettling, the escalating costs at the pump won’t stop at the 16-cent spike. The nonpartisan Legislative Analyst’s Office recently declared that the tax could exceed 50 cents per gallon by the year 2020.
We commend Governor Brown for recognizing that income inequality is indeed a serious and complex issue, but regressive tax policies do nothing but exacerbate the problem. Instead of hitting struggling Californians with yet another volatile tax, let’s help them back on their feet and create an economy where consumers are in a position to move it forward.