California Republican lawmakers launched the “Cost of Living Week” initiative at the beginning of June, proposing a series of measures to reduce the cost of living for California families. However, the proposals were suppressed in the state legislature where Democrats hold an absolute majority. None of the 15 affordability bills passed the Assembly; some were shelved in the appropriations committee, and others didn’t even make it to their respective committees for discussion.
The comprehensive plan put forth by Republican lawmakers includes: 1) limiting utility rate increases to within the rate of inflation; 2) demanding transparency in gasoline prices and institutionalizing accountability; 3) halting the collection of state gasoline taxes; 4) repealing the income tax on service fees; 5) providing a $11 billion tax cut for the middle class.
Republican leader in the state legislature James Gallagher criticized through a press release that despite promises from Democratic lawmakers to address the economic burdens of Californians, they lack a plan and actively block relevant proposals, leading some families to flee the state. He stated, “If they are serious, they should stop obstructing these solutions, cooperate with us, why do they keep blocking the way?”
Gasoline prices in California are significantly higher than the national average, prompting Republican lawmakers to seek a pause on costly mandates and hidden taxes to lower fuel prices.
According to the AAA website, on June 11, the national average for gasoline was $3.124 per gallon, whereas in California, it was $4.674, a difference of $1.55. The high gasoline prices in California are attributed to factors such as state taxes, environmental regulations, special material requirements, and the isolated California oil market, as reported by the US Energy Information Administration in early May.
The breakdown of retail gasoline prices in California includes taxes, distribution and marketing costs, refining expenses, and crude oil prices. Drivers in California pay the highest gasoline taxes in the country, including a federal tax of $0.18 per gallon that is the same for all states, in addition to $0.6 in excise tax, $0.1 in sales tax, and $0.02 in underground storage tank fee; whereas the average tax in other states is $0.28 per gallon. Additionally, there are fees for the Fuel Under the Cap (FUC) and Low Carbon Fuel Standard (LCFS) that need to be factored in.
According to the California Department of Tax and Fee Administration, the excise tax will increase from $0.596 per gallon to $0.612 per gallon by July 1 of this year, compared to $0.36 per gallon back in 2015.
As highlighted in Gallagher’s press release, California’s overregulation isn’t limited to gasoline production and sales. Republicans believe that streamlining building procedures and reducing red tape can lower residents’ housing affordability burden; offering insurance rate reductions can restore functionality in the homeowner market; reforming punitive energy policies can reduce utility costs; and implementing middle-class tax cuts can help families retain more income.