California gas taxes go up again next week – and that’s actually a good thing. But I know this won’t suit many people.
First, the facts.
The state gas tax is set to rise 3.2 cents on July 1 to 50.5 cents per gallon. This is because SB 1, which was passed in 2017, automatically raises the gas tax in line with the increase in the consumer price index.
That is why the gas tax – which is one of the highest in the country – jumped by 12 cents per gallon in 2017 and by 5.6 cents last year.
California at the moment rank near the bottom from all states in terms of highway investment, which means our roads and bridges are in very bad condition.
The gas tax is projected to generate around $ 7 billion this fiscal year to pay for much-needed repairs.
Separate road repair costs debut next week for electric cars with 2020 or newer models.
“If we don’t do something, the situation will get worse,” said Asha Weinstein Agrawal, a professor of urban and regional planning in San Jose State.
“Think of it as maintaining your house,” he told me. “If you don’t do routine work when you need it, you will immediately see a big improvement.”
That’s where we are now. After years of neglecting our transportation infrastructure, California now faces enormous bills only to pursue and restore our path to conditions that should have existed for a long time.
I know, I know. How can anyone talk about driving up costs when the economy is busy and millions of people out of work? Isn’t this a self-defeating step?
That’s a fair question.
“Do you really want to suppress behaviors that can help the economy amid a pandemic and recession?” asked Rob Peroni, a law professor at the University of Texas at Austin who focuses on tax issues.
“This is a complex thought for many people,” he told me. “They want a lower price and they want it now.”
That said, Peroni and other experts admit that there was never a right time to raise taxes. When times are tough, higher taxes can make them harder. When times are good, people think they deserve a reduction in the form of tax cuts.
The COVID-19 pandemic, in fact, might be the perfect opportunity to raise the gas tax.
“Driving is very far, so in theory this is the right time to pursue road investment,” said Ronald Fisher, professor of economics at Michigan State University.
Although less driving for a while means less revenue from gas taxes, it also means less disruption from road works.
Fisher also pointed out that the state usually contracts private companies to carry out such infrastructure improvements, which means that revenues from higher gas taxes can actually serve as a stimulus for the California economy in the form of job creation.
“No one wants to pay for these items,” he said. “But let’s face it, you can’t have something for nothing.”
There are two big elephants in the room. One is the problem, familiar to all Los Angeles residents, that there are several alternatives for driving around.
Unlike San Francisco or New York, it is too difficult to navigate large parts of Southland via public transportation. Options are limited, and transit times can be two to three times longer than traveling by car.
Another problem is that gas taxes are regressive, which means they have a disproportionate impact on low-income people who may have no choice but to drive to and from work every day.
LA. Metro is working on building our subway and train systems, but we are still decades from a transit system that is getting closer to meeting the needs of this vast and diverse region.
The work must be continued and, if possible, accelerated. Expo Line has not met the expectations of many racers. The long-awaited Crenshaw Line will not operate until next year – two years later than originally promised.
The regressive nature of gas taxes can be more quickly handled in the form of tax credits that ease the financial burden on low-income households. This seems like a reasonable solution to a problem that represents an unfair burden on many working families.
In many ways, gas taxes are like cigarette taxes. Increased income can be applied to what economists call “negative externalities”, or unintended consequences.
Cigarette taxes generate part of the funds to address higher health care costs due to tobacco use.
They also function to deter behavior that the public considers undesirable. In the simplest terms, the more something costs, the less likely people will buy it.
The gas tax is mainly intended to improve roads and bridges. But this has the added benefit of preventing the use of fossil fuels at a time when the planet needs to be more serious in dealing with climate change.
“This encourages people to move in other ways besides burning fuel,” said Brian Taylor, director of the Institute of Transportation Studies at UCLA.
“In a sense,” he said, “the gas tax must get itself out of business” by finally eliminating our dependence on fossil fuels.
Is there a better way to deal with this problem than raising gas prices regularly? Yes, here.
Many economists say cash to maintain transportation infrastructure can be far more effectively raised through so-called mileage costs than gas taxes.
Think of it like your meter utility costs. The more power or water you use, the higher your monthly bill. The same thought would make sense to use the highway – the people who drive the most have to pay more.
The problem is, the only feasible way to apply mileage fees is to equip all vehicles with tracking devices, and that creates a clear privacy problem.
Personally, I have no problem electronically tracking my driving if it can reduce my fuel and insurance costs. But I understand why many people are wary of such technology and how it can be misused.
So that basically makes us with gas taxes less efficient to pay for road maintenance.
Severin Borenstein, a professor of business administration and public policy at UC Berkeley and one of the most respected energy experts in the state, noted that the average Californian represented the use of about one gallon of gas a day before the pandemic, including consumption by businesses we serve
“So this tax increase will burden an ordinary family of four 13 cents per day or $ 4 per month,” he said. “It’s nothing, but compared to all the other living expenses in California, that’s not much.”
In addition, “just saying that taxes are bad doesn’t make sense when they are what allows us to build infrastructure to support the economy,” Borenstein said.
Look, I understand. Nobody likes higher taxes. Then again, no one likes having to make a big car repair after slamming into a hole.
According to AAA, average cost from a hole-related trip to the mechanic spends $ 306, but in some cases can reach $ 1,000.
Suddenly an extra 3.2 cents a gallon doesn’t seem too much, does it?