Like putting the cap on your gas tank and turning it tight, Board of Equalization Member George Runner sees the State of California receiving an inappropriate windfall from gas taxes and wants to cap it – tight.
Runner is seeking an author for his bill that would limit the fuel taxes Californians pay at the pump to the first $4.00 per gallon.
“Capping fuel taxes could keep hundreds of millions of dollars in the pockets of California consumers, help consumer confidence and bolster California’s economy,” said Runner.
The cap, according to Runner, would have no affect on the fuel tax revenue Governor Jerry Brown was counting on in his January budget. That’s because Brown’s budget projected average quarterly fuel prices to no greater than $3.82 during the 2012-13 fiscal year.
Everything above $3.82 is a windfall to the State according to Runner and a burden to gasoline buyers.
“At this point there’s no reason for governments to get the windfall when people are struggling with high gas prices,” said Runner.
According to Runner, even with lower levels of consumption, rising fuel prices have spurred fuel tax revenues to record levels. Due to rising fuel prices the state collected $61 million more in fuel tax revenues during second quarter of 2011 than during the second quarter of 2010 even though fuel consumption fell by 127 million gallons.
On the positive side, the financial windfall goes into the general fund, which Runner concedes does benefit struggling school districts.
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“The schools automatically get a portion of those dollars because of the formulas that are in place. Whatever comes in under Prop 98 -- a percentage of that automatically goes in to schools,” said Runner.
Runner’s focus, however, on who is paying not what program is benefiting.
“I think more importantly to where it goes is who it’s coming from. It’s coming from overtaxed Californians and we’re struggling right now,” said Runner.
Besides, in his opinion, there is already enough money to fund schools.
“You do you have enough funding for schools. The problem is the money is not getting to the classroom,” said Runner.
Runner acknowledged the 80+ pink slips handed out by the Saugus Union School District last month.
“That’s a perfect example. What we’re doing is laying off teachers instead laying off the bureaucrats that are the mid-management in the system of education in the state of California,” Runner said.
Those bureaucrats, Runner believes, reside at the California and Los Angeles County Departments of Education who “do very little that affects what happens in the classroom.”
Runner cites the American Petroleum Institute to say California's gasoline taxes and fees, averaging 67 cents per gallon, are tied with Connecticut’s as the second highest in the nation. California’s diesel taxes, averaging 75.9 cents per gallon, are the highest in the nation.
Among these taxes and fees are a federal excise tax of 18.4 cents per gallon, a state excise tax of 35.7 cents per gallon and a sales tax of 2.25% plus applicable local taxes.
Runner says that since the sales tax is calculated on the total price of the fuel sale including excise taxes it results double taxation.
“California consumers pay a tax on a tax,” according to a Runner press release.
For diesel, the federal excise tax is 24.4 cents per gallon, the state excise tax is 13 cents per gallon and the sales tax is 9.12% plus applicable local taxes.
Runner says, since the sales tax is calculated per dollar spent rather than per gallon of fuel, government coffers receive an unanticipated windfall when fuel prices rise.
Although consumers and taxpayers are unhappy with prices at the pump Runner wants to redirect the finger of blame.
“Unfortunately, people oftentimes point at the oil companies as being the profiteers in this kind of a time, but in reality some of the other groups that are making a lot of money off that is state and local government,” said Runner.
Runner indicated his office is preparing urgency legislation for possible consideration by the Legislature in the coming weeks.