How California’s gas tax impacted Nevada County prices at the pump | TheUnion.com

How California’s gas tax impacted Nevada County prices at the pump

Drivers are digging a bit deeper into their pockets now that California's new gas tax has added 12 cents a gallon to their fill-ups.

But Nevada County officials say funding from the Road Repair and Accountability Act, geared to generate more than $5 billion statewide annually, amounts to pennies on the dollar in terms of cost and benefits as needed maintenance work won't have to be kicked down the road.

Nevada County's state representatives, and some local business owners, don't see it that way.

Both Senator Ted Gaines and Assemblyman Brian Dahle opposed the tax when it was approved in April as part of Senate Bill 1, saying the state already has the funding it needs for such work.

"We don't need to raise taxes to fix our roads," Dahle said in a statement. "California simply needs to take the vehicle weight fees that truckers like me already pay and put them towards roads as they were originally intended.

"In case after case, the money designated for roads has been stolen by the state and spent on other things. I voted against this tax because we are already taxed enough for transportation."

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Dahle, who now serves at the Assembly Republican leader, is among those who supports repealing the tax.

POSTED PUMP PRICES

Within 24 hours of the new tax taking effect, the price of regular unleaded gas in western Nevada County increased by an average of 10 cents per gallon at 17 area gas stations surveyed.

The highest advertised price for unleaded gas was $3.29 per gallon, an increase of 10 cents over Tuesday's price, at the Chevron station on Sacramento Street in Nevada City. The lowest price, $2.85 per gallon, was posted at the Quik Stop station on Hughes Road in Grass Valley, which did not raise its price in the first 24 hours of the new tax.

The largest increase for regular unleaded, at the stations surveyed, was a 20-cent increase at Chevron on McKnight Way in Grass Valley, which raised its price per gallon from $2.99 on Tuesday to $3.19, as of Thursday morning.

Several gas stations offer discounts for cash transactions, including a 10-cent per gallon discount for both Flyers gas stations in the Glenbrook Basin. Best Gas, off Wolf Road in South County, advertised a price of $2.49 per gallon — a 50-cent discount per gallon from its posted $2.99 price — for cash payments on Thursday.

The fact that some stations didn't increase the price per gallon to the full 12 cents of the new tax, could be due to the time of year. The Nov. 1 price increase coincided with the annual shift to a winter blend of gasoline, which generally reduces prices by about 6 cents per gallon, Marie Montgomery, a spokeswoman for AAA of Southern California, told the Associated Press.

California's Oct. 31 statewide average of $3.04 per gallon was about 57 cents higher than the national average and the highest in the continental U.S., according to AAA. Wednesday's increase puts the state gasoline tax at 41.7 cents on top of the unchanged federal gas tax of 18.3 cents.

Gas prices prior to the tax taking effect are also nowhere near the prices California motorists paid in October 2012, when the average price per gallon reached $4.61 across the state. At the time, oil was trading at nearly $100 a barrel. Crude oil currently trading at nearly half that, at $55 per barrel on Friday.

"Even with the fuel tax, it's not as bad as it was then," said Jeff Pardini, co-owner of Hills Flat Lumber Co. in Grass Valley. "The problem now is that all fuel taxes are basically one-third of what we spend on fuel. So when the cost of fuel goes up, and people across the rest of the country are paying $3-$4 a gallon, we could be paying $5-$6 a gallon."

COST OF BUSINESS

Along with the 12-cent increase for unleaded gasoline, state diesel taxes were increased by 20 cents a gallon and diesel sales taxes rose by 4 points to 13 percent.

That's certain to leave a mark in the ledger for local businesses, particularly those that make deliveries with a fleet of diesel trucks or depend on them for goods and products they sell.

"It's not all about what you're putting in your tank," said Pardini. "Raising the price of diesel means you're raising the price of everything we consume in California, because everything comes here in trucks. The raw cost of products and goods will go up."

Pardini said the gas tax increase is just the latest in a long line of state legislation pinching small businesses, pointing to California Air Resources Board requiring diesel trucks to be upgraded to reduce emissions. By Jan. 1, 2023, nearly all trucks will need to have 2010 model year engines or equivalent.

To that end, Hills Flat has spent nearly $90,000 outfitting several of its trucks with particulate matter filters to meet those standards. But those truck engines weren't geared to operate with those filters, Pardini said, which has led to additional costs.

"We put them in the trucks to make sure we're not impacting the environment," he said. "But you see a reduction in horsepower and fuel economy, and we're not able to run our trucks as many miles a day. Then we have engines blowing up on the trucks — we replaced one for $35,000-$40,000 — and, believe it or not, we end up getting fined by the CHP because the engine blows and leaks oil on the road."

"We need this economy to pick up, not slow down," Pardini said. "And we certainly don't need to drive another nail in its coffin."

ROADWORK AHEAD

With more than 400 vehicles in its fleet, Nevada County no doubt expects to see a surge in its fuel expenses, which could amount to a $30,000 increase annually, according to Martin Polt, deputy county executive officer.

"The actual road repairs the county is going to be able to fund with the dollars, for us is probably much bigger I'd say than the additional cost," Polt said. "Although we will have additional cost for our fleet vehicles due to the gas tax and resulting increases in gas prices and mileage costs.

"But that's really far outweighed by the dollars that are going to come in to help us do … some overlays, just maintaining our roads and keeping our pavement index where it is right now, which is a pretty healthy level of quality."

Prior to the passage of SB-1 in April, Nevada County had announced a decision to perform no preventative road maintenance over the next five years. Decreased tax revenue led to that decision.

But the gas tax is expected to provide almost $13 million over the next five years for Nevada County roads. The tax, which also includes vehicle fee increases, expects to bring $980,000 to the county in fiscal year 2017-18. That number would jump to $2.7 million in fiscal year 2018-19 and slowly climb each following year, through fiscal year 2021-22, county records state.

The taxes are projected to raise about $5 billion a year to be split between state and local governments. Much of it will pay for fixing potholes and rebuilding crumbling roads and bridges. Some will also pay for public transportation, biking and walking trails, and other projects.

STILL MORE TO COME

Californians will also have to pay a fee of $25 to $175, depending on the value of their vehicle, when they renew their registration next year. Zero-emission vehicle owners will pay $100 per year starting in 2020 since they don't pay gas taxes.

It's the first of several tax and fee hikes that will take effect after Democratic lawmakers approved them earlier this year, a vote that Republicans see as a key issue in the 2018 election.

"More and more people cannot afford to live here," said Assemblyman Dahle, R-Bieber. "This is essentially a tax increase on everything from a gallon of milk to a pair of running shoes. California industry runs on diesel and an extra 20 cents a gallon is going to have far-reaching effects on people's jobs."

Two ballot initiatives have been filed to repeal the tax. Assemblyman Travis Allen, R-Huntington Beach, led the charge in June to launch a repeal effort. And former San Diego City Council member Carl DeMaio filed a second ballot initiative in September. Both still need to gather the requisite signatures to be placed on the ballot.

"California already has some of the highest gas taxes and worst roads in the country," state Senator Ted Gaines, R-El Dorado, said in a statement. "Starting today, our gas taxes are second to none. The frustrating thing is that we didn't have to take a single penny from Californians in new taxes to fix our roads. But after years of diverting billions of transportation dollars to ridiculous pet projects like the High Speed Rail, we're now left paying for the same service twice."

In an interview with the San Jose Mercury News, Allen blasted Gov. Brown for passing the tax without voter approval. The state should be using existing revenue for the road repair and maintenance, rather than asking taxpayers to bail them out, he said.

"This tax hits the poorest and hardworking Californians the most," Allen said. "The repeal very simply puts the power back where it belongs — in the hands of the people of California and actually gives them the power to decide if they want the tax."

— The Associated Press contributed to this report.

Contact Editor Brian Hamilton at bhamilton@theunion.com or 530-477-4249.

BY THE NUMBERS

California’s increase in the state’s gas tax took effect Nov. 1. The tax on regular unleaded gasoline increased by 12 cents — 20 cents for diesel — per gallon. Here’s how prices were impacted at 17 western Nevada County gas stations surveyed within the first 24 hours of the additional tax:

STATION 10/31 11/2

Quik Stop (Hughes Rd.) $2.85 $2.85

ARCO (Nevada City Hwy) $2.85 $2.99

Gold Flat station $2.88 $2.99

Alta Sierra station $2.89 $2.99

Best Gas (Wolf Rd) $2.89 $2.99

Robinson’s (Main St.) $2.91 $3.03

Flyers (Sutton Way) $2.97 $3.09

Chevron (Auburn St.) $3.09 $3.09

76 (Auburn St.) $3.01 $3.09

Flyers (Nevada City Hwy) $2.99 $3.11

76 (roundabout) $2.99 $3.11

Shell (Main St.) $2.99 $3.11

Mobil (Main St.) $2.99 $3.14

Chevron (Combie Rd) $2.99 $3.15

Chevron (McKnight) $2.99 $3.19

Nevada City Gas $3.09 $3.21

Chevron (Sacramento St.) $3.19 $3.29

(Advertised retail price for regular unleaded gasoline.)