California Gas Prices Now Officially Highest in America

November 7, 2017 By Joel B. Pollak 3 Comments

As of Nov. 7, GasBuddy.com puts the average price of a gallon of regular unleaded gasoline at $3.231 in California, nearly 8 cents per gallon more expensive than the next-most-expensive state, Hawaii.

Left-leaning Politifact California notes that California’s rapid rise to the top spot fulfills the prediction of Republican George Runner, who serves on the State Board of Equalization, and who warned in April that the gas tax would make California’s gas the nation’s most expensive.

Politifact writes:

Republican George Runner predicted in April that California’s gas tax hike would catapult the Golden State’s already high fuel prices to the “highest in the nation,” after the increase went into effect on Nov. 1, 2017.

It appears his prediction was spot on. …

A spokesman for Runner, who is a former state lawmaker and sits on the state’s Board of Equalization, told us by email: “We are saddened that George’s prediction was correct so soon.”

Politifact notes that there are other factors in California’s high price, such as a “mystery surcharge” of 20 cents per gallon that was applied after a refinery explosion in Southern California.

However, it notes that California surged past Hawaii on Nov. 3, a mere two days after the new gas tax went into effect.

Republicans are mustering their political forces to campaign for a referendum overturning the gas tax in 2018. They are also targeting freshman Democrat State Senator Josh Newman of Fullerton, who voted for the new tax and who will now face a recall election next year.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named one of the “most influential” people in news media in 2016. He is the co-author of How Trump Won: The Inside Story of a Revolution, is available from Regnery. Follow him on Twitter at @joelpollak.

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Political Scams Are the Norm in California

May 20, 2017 By George Runner 4 Comments

Con artists deceive their victims by manipulating emotions and exploiting vulnerabilities. Some con artists are so skilled, their victims are unaware they’ve been scammed. Once a con artist gains your trust, it’s highly probable you’ll be the victim of a scam.

The same is true of some politicians.

Californians pay close to the highest amount of taxes in the nation and continue to demand better roads in return. Despite being overtaxed, we continue to drive on the worst roads in the nation. Politicians tell us they can improve our transportation infrastructure if we simply pay an additional $52 billion in taxes and fees.

Another egregious example is the state’s so-called Fire Prevention Fee — an illegal tax passed by the Legislature in 2011. The name indicates that taxpayers are getting fire prevention services in order to generate widespread support. However, in reality the tax only backfills a budget cut; no new fire prevention services have materialized. Sadly, these types of political scams have become common.

Consider the elimination of California’s Enterprise Zone Program in 2013. Although not without complications, the 42 enterprise zones provided economic incentives aimed at spurring job creation and business investment in economically distressed areas of the state.

At the time, I argued it didn’t make sense to eliminate these vital economic development zones. It made more sense to make the entire state an enterprise zone by promoting policies that would spur job creation and innovation. But like most good ideas in California politics, it was ignored. The Governor replaced the enterprise zones with his “Economic Development Initiative,” consisting of:

(1) Manufacturing sales tax exemptions

(2) New hiring credits

(3) The “CalCompetes” income tax credit

Governor Brown’s plan was touted as “revenue-neutral,” meaning higher taxes paid by businesses in the former enterprise zones would be offset by the new tax incentives. The California business community as a whole would pay no more taxes than before.

Sounds fair, right?

Yet as state revenues grew, something almost predictable happened. The revenue loss from the three new programs fell far short of the revenue gained by eliminating the Enterprise Zone Program. The net result is that Californians are paying more taxes than before; the estimated additional burden to taxpayers is $1.2 billion and growing.

That’s a massive tax increase – one that Californians never had a chance to vote on, despite Governor Brown’s promise to put tax hikes on the ballot.

Although state revenues have grown nearly 50 percent since 2008, there never seems to be enough money for the priorities of liberal politicians. Time and time again taxpayers who don’t receive value for their current tax dollars are asked to pay more.

Tax-and-spend politicians often make big promises to move their political agendas, then fail to act in the people’s best interests. Like con artists, they never seem to tire of finding new ways to extract money from their victims. But if their victims realize they’ve been had, perhaps they’ll be less likely to fall for the next scam.

 is a member of the California Board of Equalization.

This piece was originally published by FlashReport.org

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Let’s Pump the Brakes on Cap-and-Trade

August 19, 2016 By George Runner 4 Comments

cap-and-trade-mindscanner-sstockIn 2006, elected officials gave the California Air Resources Board virtually unchecked authority to implement AB32, which aims to reduce carbon emissions to 1990 levels by the year 2020. The legislation, including the controversial cap-and-trade program, expires in four years.

Some lawmakers have already introduced legislation, such as SB32, to extend CARB’s authority. However, instead of rushing to renew this controversial and expensive program, we should slow down and come up with a more affordable solution that benefits all of California.

Cap-and-trade limits carbon emissions by energy producers and raises money through the sale of carbon credits. It’s supposed to fight global warming by making it more expensive to use carbon-based fuels. But that’s not the only thing it does.

It turns out the program has made life more expensive for Californians as well.

Since being given the authority, CARB has implemented a steady stream of costly regulations, such as the “hidden gas tax.” Experts agree that this hidden tax costs California drivers at least 10 cents more in added cost per gallon of gasoline. They also acknowledge CARB’s “low-carbon fuel standard” could add another 13 cents per gallon by 2020.

Motorists might be open to paying these costs if the money actually went towards repairing our crumbling roads. Instead it seems the cap-and-trade program has become a multi-billion dollar slush fund for politicians’ pet projects.

Perhaps intentionally, CARB still hasn’t come up with a systematic way to determine if cap-and-trade dollars are really doing anything to help lower emissions levels.

There is little consensus on what constitutes a “green project.” When pushed for answers, CARB officials deflect. This obscurity allows the governor to direct cap-and-trade funds towards his $71 billion high-speed rail project, which is actually increasing the state’s carbon emissions.

Some cap-and-trade funds were supposed to go towards programs for low-income communities that want to invest in renewable energy. Because CARB is largely free to do as it wishes, there’s no real way of knowing if these grants are reaching their intended targets. That’s a kick in a gut to the less fortunate who supported AB32.

Like you, I want breathable air and clean parks for our children and grandchildren. But do CARB’s unelected bureaucrats really need this much power? Government mandates can be very expensive and inevitably the costs are passed down to consumers. Not everyone can afford a Tesla.

Why can’t we use cap-and-trade funds to solve real problems like emission-causing traffic congestion? Think about it: What pollutes more, a car that reaches its destination quickly or one that’s stuck idling on a freeway for an extra 20 minutes?

A state appeals court has already put the future of cap-and-trade in doubt. And many questions remain, such as how to spend the billions collected and whether or not the program is really an illegal tax. Some doubt CARB has the right to collect the money at all.

There’s also a fierce debate over whether or not regulators can extend the program without the Legislature’s permission. The Legislature’s chief counsel doesn’t think so.

California is already a leader on climate change, and our current law doesn’t expire until 2020. Perhaps we should leave lawmaking to our elected officials, not abdicate power to unelected regulators. Rather than rush an extension, let’s invite the public to join the discussion. Californians deserve clean air, but they also deserve affordable energy—and to know how their dollars are being spent.

George Runner is an elected member of the California State Board of Equalization.

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Swapping Fantasy Bullet Train for Real Water Storage

February 23, 2016 By Jon Coupal 7 Comments

RB DroughtLike rampaging Godzilla in all those Japanese monster movies, the unpopular and expensive bullet train has proven almost impossible to kill. However, the project’s critics may have a new weapon that will stop it dead in its tracks. Using the initiative process, opponents hope the public will be willing to trade the train for an increased and more reliable water supply, a seemingly attractive proposal after years of drought.

Looking back, it is clear the 2008 campaign that convinced voters to approve a $10 billion bond to kick off the bullet train, was a con. It was built on fantasy. You can almost hear the cigar chomping carnival barker calling out, “Step right up, get on board, we’ll whisk you between Los Angeles and San Francisco in only a couple of hours for the inconsequential sum of just 50 bucks.”

Additionally, voters were promised the entire project would come in at less than $35 billion, the balance of which would come from private sector investment and the federal government.

An independent study of the project, The California High Speed Rail Proposal: A Due Diligence Report by the respected Reason Foundation, clearly documented that the actual cost of the project would be closer to $100 billion and serve far fewer riders than claimed by backers of the bullet train. Turns out that all the negative predictions about High Speed Rail set forth in that study have not only come to pass, the project is even worse than thought.

Although the critical report was released before the election it was not enough to change the outcome. The duplicitous campaign in favor, paid for by labor unions and contractors that expected to benefit from the project, was augmented by the title and summary for the ballot measure, which were prepared by the Legislature – the same politicians who placed the Proposition 1A bond on the ballot. The title and summary were so over the top favorable to the bond proposal that alert taxpayers sued over its misleading content. The court agreed that the Legislature’s sleazy manipulation of the ballot process violated the Political Reform Act. But the decision was months too late to have any real effect because voters had already approved the new bond.

Over time, the public came to realize that they had been had. Previous support turned to dismay as it was revealed that the train would not be high speed; it would be a “blended” system that would nearly double promised travel times and the cost for tickets would double as well.

When Jerry Brown was returned to the governor’s office in 2010, he adopted the train project as his own legacy. His father, who served as governor from 1959 to 1967, is still revered in many quarters as the great builder of universities and highways. But it proved impossible to entice the private sector to participate because no sane investor thinks the project is based on a sound business model. And when the federal government turned off the spigot, the governor was forced to convince the Legislature to divert cap-and-trade funds to keep his pet project on life support.

But now, thanks to an initiative authored by George Runner, a member of the State Board of Equalization, and Senator Bob Huff, voters in November may have the option of trading in the $8 billion that remains unspent from the bullet train bond, for new water storage facilities and other programs to increase supply.

Of course, like any measure that spends billions of dollars that must be repaid by taxpayers, voters will want to carefully vet this measure. Still, with water consumption limits imposed by state and local agencies that have Californians taking fewer showers and replacing their lawns with rock gardens, voters may be willing to trade the bullet train fantasy for the security of knowing, when they open the tap, water will be there.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Originally published at HJTA.org

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New Study: Proposed tax on services could costs Californians $122.6 BILLION per year

April 17, 2015 By Joel Fox 2 Comments

Just in time for Tax Day, the Board of Equalization issued a study requested by the Senate Committee on Governance and Finance estimating the revenue take from taxing untaxed services would be $122.6 billion. The study will become fodder in the coming debate over Senator Bob Hertzberg’s effort to restructure the state tax system to include taxes on the service economy.

Hertzberg commented on the study results, “California’s economy has changed from one that had been dominated by making goods to today where 80 percent is producing services.”

Hertzberg’s plan, Senate Bill 8, would tax services as part of a restructuring plan and raise an additional $10 billion in tax revenue.

In response to the study, Board of Equalization Vice-Chair George Runner said,  “I’d consider a broader sales tax only if it’s part of revenue neutral tax reform, such as abolishing California’s income tax and the Franchise Tax Board, along with other taxes that destroy jobs. … The last thing overtaxed Californians need is another tax.”

Runner opposes Hertzberg’s proposal.

There will be plenty of time to get into the debate over service taxes. However, it should be noted that the $122.6 billion the service tax could supposedly raise is not only larger than the current General Fund budget of $113 billion, but almost $10 billion larger. In other words, a tax on services as outlined in the study could replace the General Fund revenues and get the additional $10 billion that Hertzberg is looking for while eliminating the income tax, state sales tax and corporate tax.

Hertzberg’s proposal would not attach a service tax to all the items delineated in the BOE study, pointing out education and health care as tax-free services.

If not all services are taxed the door would be open for other services and industries to seek exemptions from the tax — a potential field day for the state’s lobbyists.

Cross-posted at Fox and Hounds Daily

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Eliminate the State Income Tax

March 25, 2015 By George Runner 1 Comment

During a discussion at the 2015 Cal Tax Annual Members meeting, I called for a meaningful public discourse on tax reform ideas that makes life easier for taxpayers. I suggested replacing California’s income tax with a sales tax on services.

If you want real tax reform, we ought to look at eliminating the state’s personal and corporate income tax. One less tax agency would make California a far more attractive place for jobs, retirees and investment.

If California eliminated income tax more companies would base themselves in California. Also, more residents would stay in the state upon retirement, leading to more revenue for the State of California.

Seven states do not have an income tax. Those states include Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

True tax reform makes tax systems simpler, rather than more complicated. Senate Bill 8 (Hertzberg), which would extend sales tax to services, is a massive tax increase. In its current form the legislation would make California’s tax system more complicated and add thousands of state auditors and tax collectors to state payrolls.

Any shift to a broader reliance on sales tax must be combined with real tax reform that removes barriers to doing business in our state. Don’t be seduced by false reform that makes California’s tax code more complicated for everyone.

A dynamic economic modeling of the likely benefits of an elimination of income tax and a shift to a consumption-based tax system is needed. Businesses should conduct their own modeling to weigh the pros and cons of such a structure.

Originally published by Fox and Hounds Daily

George Runner is Member of the California State Board of Equalization, District 1

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$10 Billion Sales Tax on Services Proposed by State Senator

January 23, 2015 By John Hrabe 6 Comments

An influential state lawmaker is proposing a $10 billion sales tax on services that would include everything from accounting to yoga classes.

State Sen. Bob Hertzberg, D-Van Nuys, says the changing global economy requires a reevaluation of what’s considered subject to sales and use taxes. That’s why he’s introduced Senate Bill 8, a massive tax overhaul that, he contends, will help avoid “the state’s boom-and-bust tax structure.”

“During the past 60 years, California has moved from agriculture and a manufacturing-based economy to a services-based economy,” said Hertzberg, a former speaker of the State Assembly, who is considered one of the state’s most effective lawmakers. “As a result, state tax revenues have become less reliant on revenues derived from the Sales and Use Tax on goods and more reliant on revenues derived from the Personal Income Tax.”

“Something more,” he added, “something visionary, is needed.”

BOE member George Runner criticizes $10 billion tax on services

“Something visionary,” in Hertzberg’s view, is for state government to take “something more” from the state’s service workers. That means you’ll be paying “something more” every time you get a haircut, visit your accountant for tax help or call your lawyer.

taxesBoard of Equalization Member George Runner, who serves on the state board responsible for administering sales and use taxes, says Hertzberg’s plan is a massive tax increase masquerading as tax reform.

“Some California lawmakers want yet another $10 billion from the people,” said Runner, a former Republican state senator. “They want a broad tax on services. Everything from bank transactions to haircuts to movie tickets, and everything in between. This will not work.”

Runner says “California’s hard-working families cannot afford higher taxes,” a view that is supported by the state’s leading taxpayer organization.

“‘Tax reform’ which imposes a net tax increase of $10 billion isn’t tax reform at all,”
says Jon Coupal, president of the Howard Jarvis Taxpayers Association. “It is an insult to working Californians.”

Revenue for schools, local government

Hertzberg believes California needs a permanent solution to raise revenue when Proposition 30, a temporary sales and income tax increase of $7 billion passed by voters in 2012, begins to expire next year.

“We must once again provide Californians with the opportunity to thrive in the 21st century global economy beyond temporary solutions like Prop. 30,” he said.

SB8 would allocate:

  • $3 billion to K-14 education, which would go toward rebuilding classrooms and saving for teachers pension fund demands;
  • $2 billion to higher education, which would be split between the University of California and the California State University systems;
  • $3 billion to local governments, which could go towards “additional public safety, parks, libraries or local development” but will be left to “local governments to best meet the specific needs of their particular communities”;
  • $2 billion to low-income families in the form of a new earned income tax credit to “offset the burden of proposed sales and use tax on services”

It also opens the door to “altering” the corporate and personal income tax codes, possibly cutting their tax rates. However, in addition to providing few specifics, Hertzberg says those changes would be delayed.

“The latter provisions would be phased in when it is clear that new revenue from the service taxes is sufficient to replace revenue that would be lost by those changes — and is sufficient to provide low-income workers with an Earned Income Tax Credit,” Hertzberg wrote in a piece co-authored with Edward D. Kleinbard, a USC law professor, and Laura Tyson, a business school professor at the University of California, Berkeley and chair of the U.S. President’s Council of Economic Advisers.

Most small businesses won’t be spared

Unlike past attempts to tax services, Hertzberg has embraced an expansive tax base with limited exclusions for health care and education services as well as businesses with less than $100,000 in gross sales.

Lawyers, Cagle, July 27, 2013“Small businesses, like plumbing contractors, auto repair shops, and restaurants account for more than 90 percent of the state’s businesses and well over a third of all jobs,” Hertzberg said. “They are a key rung on the ladder of upward mobility.”

Yet, those small businesses are likely to be hit with the new sales tax on services. According to the U.S. Small Business Administration, the two most widely used size standards are “500 employees for most manufacturing and mining industries and $7.5 million in average annual receipts for many nonmanufacturing industries.” Other industry specific size-standards are:

  • Legal services — $11 million in average annual receipts;
  • Accounting and related services — $20.5 million in average annual receipt;s
  • Architectural services — $7.5 million in average annual receipts;
  • Engineering, surveying and mapping services — $15 million in average annual receipts;
  • Specialized design services – $7.5 million in average annual receipts.

According to a 2011 policy paper published by the California Budget Project, which generally favored expanding the sales tax to services, “[A]t the height of the Great Depression, policymakers feared taxing services, viewing it as a tax on labor that would discourage employment.”

SB8: Chance of passing?

What are the bill’s chances of advancing?

As with most other bills, the first hearing on SB8 has yet to be scheduled. CalWatchdog.com reached out to half a dozen Republican state lawmakers for their reaction to the $10 billion tax increase, several of whom had yet to read the bill. None was willing to comment.

“To be clear, this is not tax reform,” stressed Runner, the former GOP state lawmaker now at the state tax agency. “It is a massive tax increase.”

This article was originally published on CalWatchdog.com

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Falling Gas Prices Mask Hidden Tax

January 22, 2015 By George Runner 3 Comments

So why is it that while other states are now enjoying gas prices of less than $2 per gallon, California is still paying higher prices?

Due to high taxes and costly regulations, our state’s gas prices are higher than other states. It’s been that way for years.

But what’s new is that the gap between California’s and other states’ gas prices has grown.

To get a sense of the change, compare California gas prices with those of the nation as a whole. According to GasBuddy.com, even while overall prices have fallen, the gap has grown from about 32 cents per gallon just a month ago to as much as 47 cents this January.

That’s a 15 cent increase in just one month!

The likely culprit is a new “hidden gas tax” that took effect January 1. The new regulation expands the state’s cap-and-trade program to include transportation fuels. The expansion is the latest in a series of sweeping and costly regulations developed by the California Air Resources Board as it implements the California Global Warming Solutions Act.

Luckily for the Governor and his Air Board appointees, gas prices barely budged when the new rule kicked in; in fact, prices have continued to fall, masking the rule’s true impact and ironically causing the new “hidden gas tax” to be even more hidden.

Just a few years ago gas prices were soaring dangerously near $5 per gallon. Imagine public outcry if the government had caused gas prices to soar then!

When government imposes higher costs on fuel providers, California consumers inevitably pay the price in lost jobs, income and opportunity.

As economist Severin Borenstein notes: “Every analysis of cap-and-trade — or of a gas tax or, for that matter, of movements in the price of crude oil — finds that a change in the cost of selling gasoline, up or down, is quickly and fully passed through to consumers.”

We’d likely all be paying 10 to 15 cents less per gallon if not for the new regulation. Depending on the auction price of emission credits, some fear the cost could grow far higher in future years.

Concern about the economic impact of high gas prices led to a bipartisan effort last year to postpone the planned cap-and-trade expansion. Unfortunately, Assemblyman Henry Perea’s legislation (AB 69) died when Senate President Pro Tem Darrell Steinberg refused to authorize a hearing.

Republicans have already announced a repeal effort this year in the form of SB 5 and AB 23, but it’s hard to imagine their bills will fare better.

Of course, with hidden taxes, exactly how much more we’re paying is anyone’s guess. That’s just one of many reasons hidden taxes are such a bad idea. Taxes should be transparent, straightforward and easy to understand. You shouldn’t need to hire an economist to know how much money you’re sending to Sacramento—or Washington, D.C.—each year or how it’s being used.

We do know that 25 percent of the billions in new revenue the State of California collects from its cap-and-trade system is being used to fund the state’s costly and controversial high speed rail project. Yet even with this funding source, the project—which recently broke ground in Fresno—still lacks the necessary funding to finish the job.

So next time you fill up at the pump, remember you’re helping pay for a train you won’t be able to ride until the year 2029—assuming it ever gets built.  (Even then you’ll still have to pay to ride the train.)

Maybe that’s why politicians try so hard to keep taxes like these hidden.

George Runner represents more than nine million Californians as a taxpayer advocate and elected member of the State Board of Equalization. For more information, visit boe.ca.gov/Runner.

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