Skelton: It's time to stop spinning wheels on gas tax relief

A water tower next to a "Gas War" station listing a gallon of regular at $5.29

By George SkeltonCapitol Journal Columnist

May 2, 2022 5 AM PT

SACRAMENTO — Gov. Gavin Newsom and state legislators have been spinning their wheels for months on gas price relief. They should get the vehicle moving or abandon it.

Maybe head in a different direction.

Rather than trying to ease motorists’ pain at the gas pump — or mailing out checks to help consumers endure inflation — the governor and lawmakers should spend the state’s gargantuan tax surplus primarily on much-needed infrastructure projects.

Address current public works needs while investing in the state’s future. There’s a long list of worthy candidates:

Water facilities as we cope with drought. Wildfire prevention and fighting. Dwellings for homeless people. Road repairs. Passenger rail service — real rail, not the fantasy bullet train. More charging stations for electric vehicles. Upgrading the electricity grid to carry renewable energy. University student housing.

Senate Democrats late last week did propose spending an extra $30 billion-plus on various infrastructure projects over the next few years, particularly targeting water, wildfires, climate, homelessness, affordable housing and education. Good for them.

They also proposed a lot more social spending — including for early child care, healthcare for immigrants living here illegally and higher CalWORKs benefits. But nothing specifically for burdened motorists.

Both Senate leader Toni Atkins (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) oppose providing gas pump relief, either by suspending the fuel tax or sending every vehicle owner some cash.

The two legislative leaders want to give every taxpayer $200 — plus $200 for each of their children — regardless of whether they own a car. But only if a family makes less than $250,000 a year or an individual earns under $125,000.

Newsom also objects to suspending the car tax. There’s no guarantee oil companies would pass the savings on to motorists, he and legislative leaders insist.

Instead, the governor has proposed sending each registered car owner $400 — up to $800 for more than one vehicle. But he’s willing to compromise with lawmakers by excluding owners of expensive cars.

OK, I’m in the minority here, but all this exclusion of the upper middle class and wealthy seems a bit unfair and wrongheaded — another thumb in the eye by Sacramento. They pay by far the highest state income tax rates in the country. And two-thirds of the state general fund, which finances the liberal largesse, is fueled by income taxes.

Senate leaders are projecting a $68-billion general fund surplus thanks to upper-income prosperity.

Legislative leaders contend 90% of taxpayers would benefit from their $200 so-called rebates. But that would exclude the top 10% of earners who supply 81% of the general fund money to be rebated, according to the latest state figures. The top 5% kick in 70% of the fund.

Sure, upper-income Californians don’t need the money financially. But the Democratic leadership should consider returning a few bucks to boost morale and signal they’re part of the loop, not just cash cows for Sacramento. Polls show that increasing numbers of California voters are griping about high taxes, making them even more hostile toward the state and its government.

Lower-income people are hurting as inflation drives up prices — inflation partly caused by the feds’ $1.9-trillion American Rescue Plan during the pandemic. Sacramento also kicked in $12 billion in “rebates” for Californians earning less than $75,000.

The handiest hook for plying voters with tax breaks or cash this election year has been the record gas prices. California has the nation’s highest, averaging around $5.70 a gallon for regular.

In his March 8 State of the State address, Newsom said he wanted “to put money back in the pockets of Californians to address rising gas prices.” As I wrote then, don’t get excited about receiving anything — at least soon.

There are lots of ideas with slim chances of passage.

A rare coalition of moderate Democrats and Republicans — the Problem Solvers Caucus — proposed last week that California suspend its 51-cents-per-gallon gas tax for a year. The tax pays for highway projects, but the lost revenue would be replaced by general fund money. The legislation would require oil companies to pass on the $9-billion tax savings to motorists.

Republicans long have pushed for suspension of the state gas tax but are too weak to get anywhere.

Assemblywoman Cottie Petrie-Norris (D-Irvine) is carrying a bill supported by moderate Democrats that would give all taxpayers $400, regardless of their incomes or vehicles’ value.

“Really, it’s time for us to stop debating and start delivering,” she says. “For me, the most important thing is to get this done and get money into people’s pockets.”

Sen. Ben Allen (D-Santa Monica) advocates pouring loads more surplus money into infrastructure.

“There are a lot of people who would welcome [gas tax] relief,” he says. “But what they really want to happen is to solve homelessness, traffic congestion, invest in the education system. Look at our water system, for God’s sake. It’s broken.”

To their credit, the governor and Legislature have substantially increased spending on infrastructure in recent years, notably for water, homelessness, wildfires and transportation. But much more should be invested and faster.

Personally, I think most of us sound like spoiled crybabies on gas prices. We’ve still got some of the lowest in the world. Western European motorists pay more than $8 a gallon. And they’re hit with higher fuel taxes.

Gas prices soared when Western nations sanctioned Russian oil exports. Ukrainians are fighting to save their country and their lives from Russian butchers, and we’re moaning about paying a buck more for gas.

But I’m the last person who should be pooh-poohing the pump pain. I broke a leg six weeks ago and haven’t been driving.

My pain right now comes from watching Sacramento politicians spinning their wheels on a questionable roadway.