Tom Warne Report, 26 October 2012
Fox & Hounds – October 24, 2012
A new ad in California has gotten the attention of Gov. Jerry Brown, who says the ad incorrectly claims the Proposition 30 tax increase would be applied to gasoline. Gov. Brown says that sales tax does not apply to gasoline, therefore the gas tax will not go up.
An attorney for the ‘No on 30 campaign’, Tom Hiltachk, says gas prices will indeed go up if Proposition 30 passes, because it is an amendment to the state’s constitution. The current sales and use tax is implemented by a statute. He says Proposition 30 states that it imposes a new sales and use tax, “in addition” to the existing sales and use tax and places that tax in the State Constitution.
The No campaign claims that if Proposition 30 passes, the State Board of Equalization will be required to adjust the current excise tax on gasoline to increase it to account for the increase in sales tax that would have otherwise been applied to gas sales.
The Los Angeles Times asked the state’s nonpartisan legislative analyst about the No campaign’s claims, and he said Proposition 30, Gov. Jerry Brown’s plan to raise upper income and sales taxes, will not increase levies on gasoline. “Proposition 30 does not appear to us to levy an additional sales and use tax on motor vehicle fuel,” said Jason Sisney, a spokesman for the analyst’s office. “Certainly, it is often the case that one side or the other disagrees with parts of our analysis in an initiative campaign…. But, that is our best take now.” However, Sisney said, because of the complicated way in which California’s fuel taxes are levied, the measure would increase taxes on diesel fuel. He said that would amount to “a relatively small amount of additional revenue.”
Critics of the plan stood their ground in spite of the analysts’ claims. “Prop. 30 will increase the price of gas in California, plain and simple,” said George Runner, a Republican member of the state Board of Equalization.
This is a complicated issue. If Proposition 30 fails then Governor Brown’s plan for balancing the budget goes down and the $16 billion structural imbalance (translated-you are broke) remains unresolved. If it passes then it would appear that gas prices in California will go up. TW