Written by David Castellon
The Fresno Chamber of Commerce, the Fresno County Farm Bureau and the organizations’ Kern County counterparts scheduled a joint press conference in Fresno a couple of weeks ago to try to rally opposition to the new transportation bill being pushed by the governor through California’s legislature.
The event was abruptly cancelled when the state Assembly and Senate both passed Senate Bill 1 — the Road Repair and Accountability Act of 2917 — which is intended to raise more than $5 billion annually through a 12 cent-per gallon excise tax on regular gasoline, higher taxes on diesel fuel and new vehicle registration fees.
Supporters of the bill say the money is desperately needed to pay for the heavy backload of road repairs and upgrades needed in California, as the existing gas tax hasn’t been increased in 23 years.
As a result, California has about $6 billion in unfunded repairs and upgrades on its state highway system, and that doesn’t include the work needed on other roads.
Opposition is still vocal
But even though the new fee system is on track to start later this year, opponents of the SB 1 remain vocal in their opposition and concerned about its potential effects on consumers and businesses in the state.
“Last night I watched as the Democrats walked away from all Californians except the rich and voted for the largest, most regressive tax this state has seen in generations,” Assemblyman Devon Mathis, R-Visalia, said in a written statement the day after the vote.
“It’s not the wealthy, Tesla-driving, coastal Californians that will be hurt, it will be those struggling to put food on the table, pay their cell phone bill on time, and fill up the gas tank to get to school and work that will be devastated by this massive tax increase.”
And his fellow Republican in the Assembly, Jim Patterson of Fresno, said in his own press release that “There is already plenty of money to fix our roads and Governor Brown knows it. What he wanted was another blank check from California taxpayers, and now he’ll get it.
“Assembly Republicans put forward a plan to fix our roads and ease traffic congestion without one penny in new taxes. That’s what everyday Californians want — not huge tax increases and more empty promises.”
Not that there wasn’t support for the new transportation bill, and it wasn’t just from Democrats in Sacramento.
“Fixing our roads and improving transportation in the state is critical to California’s economy and our job climate,” officials with the California Chamber of Commerce said in a press release.
“The new revenue provided for in SB 1 will ensure that we do not continue down the path of further deterioration of our roads and bridges. Repairing roads now will be far cheaper than replacing them later.”
Mixed business reaction
Among people involved in business in the South Valley, the reaction to the new law was mixed.
For example, Rich Hosea, an independent truck driver who lives in both Fresno and Iowa, said he’s not looking forward to filling the 220-gallon fuel tank on his semi truck with the added cost of 20 cents per gallon for diesel.
“I have to eat it, because with the competition out here, it’s hard to get the [clients] to raise their rates. It could drive me out of business,” said Hosea, who added that he’ll try to avoid the extra costs by filling up as often as he can in other states, as most of his driving takes him out of California.
And while he sees that there is a need to fix California’s roads, Hosea said, “I can see them raising the taxes a little bit, [but] not 20 cents a gallon, and I think the cars should be at the same rate.”
“To our operation, it will increase our costs by $300,000 to $350,000 a year,” to fuel trucks hauling farm crops, cattle and processed beef, said Patrick Smith, corporate transportation manager for Coalinga-based Harris Farms.
That operation includes a Selma beef plant that processes about 1,150 head of cattle a day.
This new tax adds to the various fees, taxes and costs to comply with the various rules and laws that make California among the costliest places for businesses to operate, he said, adding “this state has escalated the cost of doing business at a more accelerated rate over the past four or five years.
“Eventually, the general public will bear the costs. As the cost of transportation goes up, that adds to the [costs of] goods produced,” he added.
“This is California. They have so many regulations, nobody want to come here any more — at least in the trucking industry,” said Kim Gust, co-owner of Gust Transportation in Clovis. “It’s hard to get trucks to come into California.
“And then you have to pay an arm and a leg to get them to come here,” assuming those out-of-state-trucks have emission-reduction devices required to operate in this state, Gust said.
Agriculture limited on price moves
As for SB 1’s effects on businesses, in the agricultural industry many producers can’t elevate their prices, so they’ll likely have to eat the added costs coming with the new gas taxes, Smith said. And while some can raise their prices, doing so comes with risk, as this may prompt buyers to look for cheaper prices from out-of-state producers, Smith warned.
Unfortunately, the new gas taxes and added registration fees — from $25 to $175, depending on the value of the vehicle, and $100 for electric cars with no emissions — resulting from SB 1 likely will hit Valley vehicle drivers harder than those in more urban parts of the state, as drivers here tend to drive farther to work, on average, said Nathan Alonzo, government affairs manage for the Fresno Chamber.
“We felt that our residents should not have to pay more than people in urban areas that don’t drive as much,” he said, adding that last week’s press conference was cancelled because both legislative houses got SB 1 through faster than expected.
But not all Valley business people see SB 1’s passage as a bad thing.
“I don’t like it, but overall I think it’s going to be a good thing,” said Steph Streeter, owner of S&S Helicopters, which operates out of the Madera Municipal Airport.
Although his business uses a lot of fuel, it’s mostly aviation fuel, which isn’t affected by SB 1, so the added costs he’ll have for operating ground vehicles should be minor, said Streeter, who is willing to incur that added costs if it leads to improved roads.
“You rattle down [Highway] 99, and it’s like taking your life in your hands. Going down 99 is more dangerous then riding on a crop duster,” he said, noting the need to repave large sections of that highway.
“I’m from the Midwest, and it amazes me how everyone here wants the good things, and is not willing to pay for it. If you want these good roads and infrastructure, somebody has to pay for it.”
Money should be accounted for
David C. Kunkel, chief operating officer for Svenhard’s Swedish Bakery, in Exeter — the nation’s top producer of packaged Danish pastry — said even though the new law will raise his transportation costs, he sees a bigger benefit in fixing California roads and reducing the damage bad stretches of highway are doing to his trucks.
“To be honest with you, if they use the funds for what they are supposed to use it for, I don’t have a problem with it,” said Kunkel, who plans to replace his fleet of 65 trucks for in-state transport with new ones later this year.
But his support of SB 1 comes only if state officials use the money earmarked for road work for for road work, as it appears to him that California isn’t using all the money it has received in the past for road work in the most efficient manner — doing more patch work than long-lasting repairs and upgrades.
And critics of the legislation have raised concerns that California lawmakers have borrowed from road funds in the past to shore up other part of the state’s budget without paying back those road dollars.
Smith is among the people questioning whether money intended for roads has gone elsewhere and whether that could happen again with the money collected through SB 1.
Clearly aware of some of these concerns, Brown’s office has said the new gas taxes are expected to cost average drivers about $10 a month, and in a press release stated that the new law “comes with strict new accountability provisions to ensure funds can only be spent on transportation.”