The Board of Equalization got the last laugh on a gas tax increase

By Jon Coupal : ocregister – excerpt

In a normal universe, the rejection of a gas tax increase by a state agency would be based primarily on policy grounds. But in a strange mix of wonkish tax policy, political turf fighting and revenge, California drivers will be spared — temporarily — from a 4 cent per gallon tax increase on gasoline.

On Feb. 27, the Board of Equalization was expected to approve a routine request by the governor’s Department of Finance to raise the tax. But it did not. As a result, the state treasury will miss out on a little more than $600 million (much to the relief of California drivers, however).

Because California already has one of the highest gas taxes in the nation, citizens may not care one bit about why the Board of Equalization rejected the tax increase. But understanding how this happened is an object lesson in the strangeness that is California.

It begins with the “gas tax swap.”…

The Legislature then saw these issues as an opportunity to pounce and deprive the Board of Equalization of the bulk of its authority, shifting much of its responsibilities to a new bureaucracy-driven California Department of Tax and Fee Administration that has no direct political accountability…

And although the members who spoke against the increase cast their positions as looking out for California taxpayers, no one who has observed the Board of Equalization over several years missed the real message being delivered to the Legislature. The board’s decision leaves the fuel excise tax at 29 cents per gallon, instead of 33 cents, for another year unless the legislature finds a clever way to bypass the process… (more)

Advertisements