Written by John Kabateck
Energy prices are no small matter to small businesses, which listed them as their sixth biggest worry in National Federation of Independent Business’ latest Small Business Problems & Priorities report, a 13-place jump from their 2020 ranking of 19th. The report ranks a total of 75 issues.
Small business owners are doubtful from experience about the efficacy of government intervention in the day-to-day operations of any business. If the Legislature really wanted to do something substantive to battle inflation, it should have reduced the gas tax.
ABX2-1 — signed into law by Gov. Gavin Newsom Monday — aside, every Californian who drives a vehicle for any reason is staring down the barrel of a half-dollar-per-gallon increase in their gas taxes when the California Air Resources Board votes on its Low Carbon Fuel Standard regulation next month. How much more will ABX2-1 exacerbate the problem? It’s no wonder that when NFIB last surveyed its small-business-owning membership, uncertainty was at a historic high.
Newsom recently called a special legislative session to consider controversial new controls on state oil refineries, and the California Air Resources Board — the state agency tasked with regulating planet-warming emissions — soon will consider stricter limits on the carbon intensity of fuels.
In September of last year, CARB estimated that the change could lift gasoline prices 47 cents a gallon, or $6.4 billion a year. Other analysts put the price even higher — 65 cents a gallon, or $8.8 billion a year.
Now, as CARB nears a November vote on its low carbon fuel standard, or LCFS, the agency is backing away from its price hike forecast. Recently, an air board official told legislators that the 47-cents-a-gallon estimate was just a ‘snapshot’ based on a forecasting model that ‘can never capture real world conditions.’ However, the agency has refused to offer a revised estimate to the public.
Enough is enough. Struggling California small businesses, workers, and families deserve better than government leaders advancing dark-of-night policies that will raise prices and shut more doors on Main Street.
John Kabateck is the California state director for the National Federation of Independent Business.