Matt Leider: Support fuel-cost hike delay

July 6, 2014 

Finally, Sacramento politicians are standing up for the little guy.

Recently, 40 members of the California Legislature — 24 Republicans and 16 Democrats — asked the powerful Air Resources Board to give California's beleaguered low-income and middle-income families and small businesses a break.

In a pair of poignant letters to the governor and the Air Board Chair Mary Nichols, the lawmakers asked for a reasonable pause before the next phase of the state's cap-and-trade program takes effect in January.

That phase will make gasoline and diesel subject to the air board's cap-and- trade auctions — a vast expansion that will hit consumers squarely in the pocketbook.

Bringing gasoline and diesel into the cap-and-trade program means refiners will have to purchase carbon emission allowances for every gallon of fuel they sell. It's a program the Air Board's own economic analysis says will add anywhere from 16 cents to 76 cents to the price of gasoline — on top of the 71 cents we already pay in state and federal gas taxes.

Californians pay the highest prices for gasoline and diesel in the country, partly because of those high taxes and partly because of our already stringent environmental regulations. This new program would impose an unprecedented new burden on drivers to pay for a broad array of government-funded programs. Worse, nobody in our state government is alerting Californians that this cost increase is coming.

That's what makes the letters from this bipartisan group of legislators so commendable — they are standing up to their fellow lawmakers who are salivating over the prospect of spending the $3 billion to $5 billion this new hidden tax will bring into state coffers.

Right on cue, the special interests who don't care about the little guy are in a frenzy. Environmental groups and alternative fuel providers are claiming the program doesn't require oil companies to pass on the added costs to their customers. Who are they kidding?

You can bet your bottom dollar oil companies are going to pass this new hidden gas tax onto their customers. Any business person faced with higher taxes would have to be insane not to do the same.

And here's the dirty little secret. Forcing up the price of gasoline and diesel — regardless of who gets hurt in the process — is exactly what the cap and trade program is designed to do. It's why environmental groups and alternative fuel providers love this program — because it will make costly alternative fuels a little more competitive.

The air board's own economic analysis assumed as much when it concluded gasoline prices would increase as little as 4% (or 16 cents a gallon at today's price of roughly $4 a gallon) to as much as 19%, or 76 cents a gallon.

These increases may not be much for well-paid bureaucrats in state government or the special interest lobbyists who hope to get their hands on the windfall this new program will create. But a 4% increase, let alone a 19% increase, is a very big deal for small businesses struggling to survive and families struggling to pay rent, put food on their tables and keep their kids safe.

And we buy a lot of gasoline in California — more than 14 billion gallons in 2013, according to the Board of Equalization. If every one of those 14 billion gallons brings in another 46 cents to the state, the midpoint of the air board's range of cost impacts, that's another $6.4 billion being taken from your pocket and sent to Sacramento.

The special interests that love this program claim it only impacts oil companies. That's like saying malaria only impacts mosquitoes. The expansion of the cap and trade program is a direct and needless hit on the California economy when we are on-track to meet California's environmental goals.

Gov. Brown, Chairwoman Nichols, please don't let the rancorous clamor of special interests drown out the little guy. Please listen to these thoughtful legislators who are asking you to delay this program. This is what breaking up political gridlock sounds like.

 

Matt Leider is owner of Tri-L Brush Shredding in Patterson and Legislative Committee Member of California Citrus Mutual.

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