Consumer Watchdog Says Oil Companies Should Pick Up The Bill For Gov. Brown’s Gas Tax

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Gov. Jerry Brown’s proposed gas tax to fix California’s crumbling roads, freeways and bridges should be paid by the oil companies that are reaping massive profits, not by consumers who are routinely gouged at the pump, a Santa Monica-based consumer advocate said Tuesday.

Consumer Watchdog sent a letter to California legislators this week urging Brown to shift the burden to the oil companies that have amassed huge profits in California while motorists pay significantly higher gas prices than the rest of the nation.

“Oil companies should be giving some of that back to fix the roads themselves,” Liza Tucker, the group’s consumer advocate, said in the letter.

Californians Already Pay More For Gas

“In 2015 alone, Californians paid $10 billion more for their gasoline than the rest of the nation while a gap between California and the rest of the USA skyrocketed to as much as $1.50 per gallon during the summer,” Tucker said.

California gas prices have been boosted by a number of factors. The state’s gas tax, as of January, was 38.1 cents per gallon. But that doesn’t include an 18.4 cent federal excise tax which boosts the total to 56.5 cents per gallon.

California drivers also see periodic price spikes when one or more of the state’s 20 refineries experiences a problem. Each year the refineries make a switch from their winter blend of gas to a more stringent summer blend that’s designed to reduce greenhouse gas emissions.

Refineries sometimes opt to do routine maintenance during that transition, which means they could be partially offline for a while. And if they encounter unexpected problems they could be out of commission longer than planned. All of this reduces the state’s available inventory of gas and hikes prices.

The former ExxonMobil refinery in Torrance, now owned by PBF Energy, has been particularly problematic recently. That facility has weathered explosions, shutdowns and a variety of other issues that have affected the state’s supply of gasoline.

SB 1 Would Invest $52.4 Billion Over 10 Years

Brown’s $52 billion Road Repair and Accountability Act of 2017, better known as Senate Bill 1, would invest $52.4 billion over the next decade to fix damaged and aging roads, freeways and bridges in communities across California and put more dollars toward transit and safety. Co-authored by Sen Jim Beall, D-San Jose, and Assemblyman Jim Frazier, D-Discovery Bay, it would generate $5 billion a year and cost most drivers less than $10 a month, Brown’s office said.

Measure To Cost Most Motorists $10 a month

But California motorists could see far bigger increases, according to Assemblyman Vince Fong, R-Bakersfield, vice chair of the Assembly Transportation Committee.

In a memo sent to Fong, the nonpartisan Legislative Analyst Office said California’s cap-and-trade program will raise gas prices by an estimated 63 cents per gallon in 2021 and 73 cents per gallon in 2031.

The cap and trade program requires companies to buy permits in order to release greenhouse gas emissions.

“When considering and evaluating the transportation funding package, we cannot look at gas taxes in a vacuum,” Fong said in a statement. “This legislature is also seeking to extend cap-and-trade, which will significantly increase the cost of gas at the pump, which combined with the proposed gas tax, could be about $1 per gallon for motorists.”


Here's Where The Money Would Come From

SB 1 would raise the needed funds for transportation improvements through a number of avenues:

•$24.4 billion would be generated by boosting the gasoline excise tax by 12 cents

•$200 million would come from a yearly $100 “zero emission vehicle fee” beginning in 2020

•$7.3 billion would be generated by hiking the diesel excise tax by 20 cents

•$3.5 billion would come from boosting the diesel sales tax to 5.75 percent

•$16.3 billion would be raised through a “transportation improvement fee” based on a vehicle’s value

•$706 million would come in the form of general fund loan repayments


Vote Likely This Week

Leadership in both the Senate and the Assembly expect the measure to be voted on this week.

Speaking Tuesday at a news conference in Riverside, Gov. Brown acknowledged that $52 billion is a lot of money. But to delay the repairs, he said, will only make matters worse.

“Every year that we delay the expense goes up,” he said. “California’s roads are deteriorating and we’ve got to fix them. It’s not going to get any cheaper. If you let this thing go for another five years it will become $100 billion.”

Assembly Speaker Anthony Rendon, D-Paramount, who was also at the news conference, echoed Brown’s comments.

“For decades the transportation system in California has been getting worse and the funding to fix it has been drying up,” he said. “Our bridges are crumbling and traffic is taking time away from our families — up to 92 hours a year. This is a realistic pay-as-you-go plan with no cuts to schools, health or public safety.”

The California Chamber of Commerce, which supports SB 1, notes that the plan includes strict new accountability provisions to ensure that the funds could be spent only on transportation.

“California has not increased the gas tax in 23 years,” the chamber said. “Since then, California’s population has grown by 8 million, with millions more cars and trucks on state roads. Californians also drive more than 350 billion miles a year — more than any other state — yet road and transit investments have not kept pace with this growth.”

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