Ease off on gas-tax windfall
Californians sure could use a break at the gas pump. Gas prices in San Bernardino County have climbed well above $4 a gallon, almost a buck more than a year ago. That's much higher than the national average of 3.83. The summer usually brings higher prices. And another war in the Middle East could send prices well over $6.
The break for motorists could come from a proposal by George Runner, a member of the Board of Equalization and a former state senator. He's proposing that sales taxes collected on gasoline stop when the pump price tops $4.
Currently, gas prices include 18.4 cents in federal excise tax and 35.7 cents in California excise tax (going to 36 cents July 1). The state excise tax must be spent on transportation projects.
On top of both excise taxes and the base price of gas is heaped the sales tax, currently 7.75 percent in Orange County. That money goes to the state general fund and to local governments. So part of it is a double tax — a sales tax on the two excise taxes. (For diesel, only the base price of the fuel pays the sales tax; the excise taxes are exempt, so there's no double tax.)
Mr. Runner told us that the sales tax isn't supposed to punish drivers when gas prices spike. He said his economists calculate the hit to California taxpayers is $1.4 billion a year. It's about $1 for each fill-up. So the tax windfall costs families something like $50 to $100 a year.
"Basically our view is that this is the wrong time for a windfall of tax dollars to the government when it's the taxpayer at the pump that has got to provide it," he said. "I get so frustrated about everybody saying what they can or can't do about high gas prices. Here is something the Legislature can do to help the taxpayer."
He said that returning their money to taxpayers wouldn't hurt the state budget because the calculations for fiscal year 2012-13, which begins on July 1, anticipated sales tax collection based on a $3.80 price for gas. His proposal, he said, only would cut "the windfall on the gas price that's already figured in the budget. And capping this would not take anything from roads," because the state excise tax would not be affected.
Indeed, by making the cost of a gallon of gas a little more reasonable, such a tax cap would encourage businesses and jobs to stay here. The average gas price on March 20 was an enticing $3.80 in Houston, Tex. A gas tax limitation would be a sign that, just maybe, California doesn't always draw targets on taxpayers' backs.