(August 30, 2004) California Chamber of Commerce -opposed legislation that would have led to huge increases in the gasoline tax and other vehicle fees failed passage in the Senate last week.

AB 1468 (Kehoe; D-San Diego) would have introduced a new mandate to cut gasoline use by 15 percent, which likely would have led to a gas tax causing higher gasoline prices, increased costs for consumer goods and thousands of lost jobs for California. 

To reduce gasoline use as called for in AB 1468, the state would most likely have had to impose the costly measures outlined in the recent joint California Energy Commission and Air Resources Board report.

That report suggested a new 50-cent-a-gallon tax, a two-cent-per-mile tax, pay-at the-pump auto insurance and a $3,500 tax on sports utility vehicles (SUVs), minivans and pickup trucks.

”The defeat of AB 1468 is a victory for California businesses of all sizes,” said Bruce Magnani, Chamber legislative advocate.  'AB 1468 would have unleashed a hidden gas tax, which would have led to an increased cost burden on business that would have slowed California's economic and job recovery.'  

The 50-cent-a-gallon tax alone is estimated to cost consumers $7 billion a year. Over 10 years, that $70 billion in higher gasoline taxes would eliminate 80,000 California jobs, according to an economic study.

AB 1468 ignored the fact that current regulations and market forces already are producing more efficient gasoline use, the stated goal of the legislation. In the last 25 to 30 years, vehicle fuel efficiency has nearly doubled, according to an Energy Commission report.

When fuel efficiency is combined with real gasoline price declines of 40 percent during the same period, that means the average real gasoline prices per mile dropped by more than half between 1980 and 2000.

The Chamber and a coalition of business and taxpayer groups opposing AB 1468 pointed out that driving a car is not a luxury that can be dropped easily when government forces costs upward. Businesspeople use cars daily for deliveries, visits to clients and other business travel. Californians need their cars to get to work, take their children to school, and shop for groceries and other necessities.

The Chamber would like to thank all of those who wrote their legislators and urged a “no” vote on AB 1468.

Key Vote
AB 1468 fell short of the majority vote needed to pass the Senate, with 18 senators voting for the bill and 15 against it.

Ayes: Alpert (D-San Diego); Bowen (D-Redondo Beach); Burton (D-San Francisco); Cedillo (Los Angeles); Chesbro (D-Arcata); Dunn (D-Garden Grove); Escutia (D-Norwalk); Figueroa (D-Fremont); Kuehl D-Santa Monica); Ortiz (D-Sacramento); Perata (D-Oakland); Romero (D-Los Angeles); Scott (D-Pasadena); Sher (D-Stanford); Soto (D-Ontario); Speier (D-San Francisco/San Mateo);Vasconcellos (D-San Jose); Vincent (D-Inglewood).

Noes: Aanestad (R-Grass Valley); Ackerman (R-Tustin); Alarcón (D-San Fernando Valley); Ashburn (R-Bakersfield); Battin (R-La Quinta); Brulte (R-Rancho Cucamonga); Denham (R-Salinas); Florez (D-Shafter); Hollingsworth (R-Murrieta); Johnson (R-Irvine); Machado (D-Linden); Margett (R-Arcadia); McClintock (R-Thousand Oaks); Oller (R-San Andreas); Poochigian (R-Fresno).

Absent/abstaining/not voting: Ducheny (D-San Diego); Karnette (D-Long Beach); McPherson (R-Santa Cruz); Morrow (R-Oceanside); Murray (D-Los Angeles); Torlakson (D-Antioch).