California Gas Tax Increase

Surprise surprise surprise. Well, it is a surprise for some, but, if you’ve been following the devious activities going on in Sacramento to constantly mislead the voters, you will not be surprised to know that on July 1, once again our gas tax will automatically increase.

This year the California gas taxes going up by 3.2 cents to a total of 50.5 cents per gallon! Now, Californians and should keep in mind that this tax goes on an already taxed gas, as it’s on top of California’s cap and trade tax to all oil refiners. So, although we’ll have the second highest gas tax in the nation, California has the highest gas prices in the nation because of the fact that gas is already taxed at the refinery through the cap and trade provisions.

California Gas Tax Increase

Californians were fooled into voting for this gas tax by being told over and over that it was needed to repair our roads and infrastructure. What the average voter was not aware of was that the existing California gas tax was only using approximately 30% of the tax to maintain roads bridges and highways and the other 70% was going into the general fund.

Actually, there was never a need to pass the new gas tax, all they had to do was allocate 100% of the existing gas tax toward road bridge and highway improvements and maintenance. Sadly, this did not occur, and a majority voted for this new gas tax. I’m sure many were unaware of the provision written in to the new gas tax bill, that it automatically increases every July 1 based on the consumer price index. Plus, it’s my understanding that it can never go down, it can remain the same or go up but never down!

In the first year of this new gas tax which is already on top of the prior existing gas tax, this new tax added 12 cents a gallon! Then, last year on July 1, the new gas tax added an additional 5.6% tax. Now, in a few weeks we will be paying an additional 3.2 cents a gallon for a total of 50.5 cents a gallon in state gas taxes!

Keep in mind, that the average California voter was fooled into voting for this automatically annually increasing gas tax, because California officials said our roads and bridges were in dire shape and needed this extra money. Then, to add insult to injury, about a year after the new gas tax passed, Governor Newsom signed Executive Order N-19-19 on September 20, directing (a huge amount of) the already controversial gas tax money away from fixing local highways in favor of rail projects.

It’s unfortunate that are power-hungry Governor could care less about improving roads and bridges and more about completing his train to nowhere. But, what is completely in my opinion a show of arrogance, is the fact that the people were assured that this extra annually increasing gas tax would be applied totally for roads bridges and highways and instead a year or so after it’s passed Newsom is redirecting billions out of it into rail projects.

To top this all off, just when you thought this story couldn’t get any worse, was the fact that after all required signatures were raised about a year ago to repeal this new gas tax, and the repeal measure was put on the ballot, our democratic Atty. General, reworded the propositions title to imply that if you voted for this you would be pulling away necessary monies from bridges and road improvements. And because the majority of voters just read the bold headlines of the bills and never get involved in reading the details, the gas tax repeal measure failed.

I think the whole take away from this story is that voters in California should vote no on any new bond or tax authority no matter what you are assured because through some shenanigans it seems that the powers in Sacramento can get around anything once the funding is in place.

You may be wondering why I’m writing this article about a gas tax increase in California in my San Diego real estate blog. Well I want to provide a little background on how Sacramental fools the average voter, because it’s going to happen again this November, where there is a measure on the ballot for a split roll initiative on proposition 13.

Proposition 13 protects real estate properties from being hit with a huge property tax increases. Now, Sacramento has this ballot measure that will repeal the protections provided on the prop 13 for all commercial properties. So, as I’m sure the supporters of this bill will point out, the proposition 13 protections will remain in effect (at least for now) on residential properties but will be eliminated from most commercial and industrial properties. Even though the initiative provides exemptions for small businesses, opponents say those exemptions don’t go far enough.

I believe the powers in Sacramento will create advertising to divide and fool the people into thinking this is an unnecessary tax break too big industrial and commercial property holders and corporations. I’m sure they’re going to say that these large corporations did not deserve the protection of proposition 13 and by removing them from this property tax protection California will gain much needed additional revenues. As I said before I’m sure this will all be couched in multiple repetitions of the fact that the passage of this will not affect the individual homeowner.

But what many people do not realize is if this passes everything in California products and services will be much more expensive! This is because your warehouses, grocery stores, accountants offices, movie theaters, exercise clubs and even your dentist office, whether owning or renting, are considered commercial properties. If taxes take a huge hike because of passage of this new law, all businesses that are owning or renting in commercial facilities will have to raise prices to cover the additional rents that the owners are going to have to charge. Yes, every individual California resident will end up paying more for every product and service if they are tricked into the passage of the removal of commercial properties from the protection of proposition 13.

The California Chamber of Commerce Board of Directors said the new proposal still “would be the largest tax increase in California ever.” It projects that property taxes could rise by 25 percent for businesses.

Don’t be fooled Again – Vote NO!

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