California special panel considers sharp fuel tax increase

| 9/10/2009

In addition to restrictive port rules, idling enforcement and equipment upgrades, truckers in California soon could have another headache on their hands. A bipartisan panel is considering a proposal to increase the state’s excise tax on motor fuels by nearly 20 cents.

The fuel tax proposal is one of several options drawing consideration by the Commission on the 21st Century Economy. The group was formed to determine how best to reduce the volatility in state revenues and then to report to Gov. Arnold Schwarzenegger.

The commission is made up of 14 members. Half of the members were appointed by Schwarzenegger, a Republican, while the rest were appointed by the Democrat-led Legislature.

Among the options getting attention by the commission are simplifying the personal income tax, and eliminating the corporate income tax and replacing it with a business net receipts tax, which would be lower but would affect more businesses.

Even though California has the most expensive gas and diesel in the contiguous 48 states, one measure under consideration is a proposal to hike the state’s per-gallon tax on gas and diesel by 18 cents.

The additional revenue would be used to pay for transportation projects, which would include transit and smart growth, The Sacramento Bee reported.

The Owner-Operator Independent Drivers Association views the proposed tax increase as excessive. The Association also is opposed to using revenue from fuel taxes for projects that don’t benefit highway users.

“From our perspective, any fuel tax increase should be used solely for roads and bridges. But no matter what it’s used for, 18 cents is too much,” OOIDA Executive Vice President Todd Spencer told Land Line.

The commission has a Sept. 20 due date to issue its final report to the governor. Schwarzenegger could call the Legislature into special session to consider the commission’s recommendations as soon as the end of the month.

To view other legislative activities of interest for California in 2009, click here.

– By Keith Goble, state legislative editor

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