by Michael Satterfield
Currently drivers in California pay 71.29 cents of taxes for every gallon pumped, the highest gas tax in the nation. The bulk of California's gas taxes come from its excise tax, which increased to 39.5 cents per gallon July 1, 2013. However, thanks to the California Air Resources Board (C.A.R.B.) we can expect gas prices to skyrocket starting in January 2015. All of this thanks to former Governator Arnold Schwarzenegger's business crippling cap & trade plan officially known as Global Warming Solutions Act of 2006.
The act has already had a major impact on jobs in the state causing manufacturers to move to states without the cap & trade policy, which does little to reduce actual "greenhouse gases" but simply requires manufacturers to buy and sell carbon credits based on how much pollution they create. according to the The California Manufacturers and Technology Association it is estimated that the act has cost California over 260,000 jobs. In just the first five months of 2013 a total of 158 companies have left the Golden State and more are leaving every day.
When it is fully implemented the cost of the Global Warming Solutions Act to California families is estimated to be as high as $3,800 a year. A big part of that is going to come from the increased gasoline taxes. As businesses and residents flee California's over taxed and over regulated environment they are finding that the savings in electricity in states like Oregon can be as much 80% to 90%. States like Texas boast better business climate but also lower cost of living, in Texas right now you would save 29 cents a gallon in just taxes over California.
In January the bill expands to oil refiners and distributors and the additional $2 billion in costs it is expected to add will be passed along to consumers at the pump. Those costs will have a ripple effect across the entire state's economy which relies heavily on trucks for moving goods. Since the California government has failed to provide any real transportation solutions other than a bullet train from Firebaugh to Fresno it will have a major impact on all California commuters.
Many are quick to dismiss the economic impact, saying that its just going to be a small increase. But according to the California Air Resources Board we can expect to see a 20 cent to $1.30 per gallon increase come January. Knowing how hungry for money Sacramento is... I would expect it to be on the high side.
"We're going to now tackle probably 40 percent of greenhouse gas emissions in the state that are emitted mostly through transportation - oil and gas use," said Climate Resolve Executive Director Jonathan Parfrey.
What Mr. Parfrey does not say is how paying more money for gasoline reduces the emissions coming out of our tailpipes. So where does all the money go?? Well according to the California Air Resources Board web page the fees are collected from oil refineries, electricity power plants, cement plants and food processors, etc... the money from those fees is used to pay for staffing, contracts, and equipment for the California Air Resources Board and other State agencies. So the businesses are forced to pay a fee to C.A.R.B. so they can fund the inspectors and regulators who collect the fee. But if your company like a power plant that has to keep producing the same amount of power, its hard to reduce emissions...so you just pay a fee to C.A.R.B. and you can keep producing the same amount of pollution.
Extending the cap & trade policy over oil is how progressives in Sacramento are address the evils of driving, the state's largest single source of pollution. By raising the price of gasoline they hope to reduce the number of miles driven as consumers are forced to consider options. But as I have pointed out in past stories we don't have those options in place. So what are the people suppose to do? (Read: Why We don't Take the Bus in California)
But the real motivation behind the policy is Sacramento's insatiable lust for more tax money. By the time full implementation is in place, the state is expected to collect an additional $5 billion in revenue by charging businesses and consumers for the right to pollute. Thus far the state collected $833 billion by selling 'carbon credits'. But if the point was to clean up the environment... why is the state in the business of selling these pollution indulgences?
Last week California sold all of the nearly 22.5 million carbon credits it offered this year, the money is deposited into The California Greenhouse Reduction Account. How the money in the California Greenhouse Reduction Account is used is still unclear. Some have said it is essentially a slush fund for pork projects so politicians can build projects in the districts, like building train hubs near properties owned by politicians to boost property value, low income housing projects to buy votes, and the high speed rail boondoggle.
In the end the average Californian will likely be paying up to an additional $20.80 per tank, that is on top of some of the highest registration and insurance costs in the country. All so we can feed the spending beast that is Sacramento.