(August 19, 2004) The California Chamber of Commerce and a coalition of business and taxpayer groups are opposing legislation that is likely to lead to huge increases in the gasoline tax and other vehicle fees.

The Chamber considers AB 1468 (Kehoe; D-San Diego) a “job killer” because its mandate to cut gasoline use by 15 percent will lead to higher gasoline prices, fewer consumer choices and thousands of lost jobs for California.

AB 1468 moved to the fast track this week and awaits action in the Senate.

Hurts Jobs
“Being the only state in the country to charge a consumption tax will most certainly be a ‘job killer’ because it increases costs for companies looking to invest in job creation here,” said Chamber President Allan Zaremberg.

“AB 1468 doesn’t account for growth in California’s markets or population,” Zaremberg said. “Not only will it cost the state existing jobs, but by raising prices, it eliminates the state’s ability to satisfy the job needs of a half million new citizens each year.”

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

That report suggests 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 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.

The Chamber and coalition are pointing 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.

Increasing the price of gas through government mandates won’t decrease the need to drive, but it will increase business and consumer costs.

Moreover, local governments will feel the pinch in police and fire protection budgets, while school transportation costs will divert more funds from the classroom.

AB 1468 ignores 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.

Action Needed
Contact your representatives in the Assembly and Senate. Urge them to oppose AB 1468. Let your legislators know that AB 1468 amounts to hidden taxes that will hurt your pocketbook, California jobs and the economy.

For more information on this AB 1468 or to view the entire 'job killer' list, please visit our website at www.calchamber.com.

Staff Contact: Bruce Magnani