Capitol Alert

AM Alert: California set to lower gas tax by 2.2 cents

As California gas prices plummet, so must the California gas tax.
As California gas prices plummet, so must the California gas tax. The Associated Press

As California gas prices plummet, so must the California gas tax.

Because of a strange bit of budget finagling in 2010 to pay off billions of dollars in transportation-related bonds without touching the struggling general fund, then-Gov. Arnold Schwarzenegger and lawmakers swapped the state’s sales tax on transportation fuel for an equivalent “gallonage tax.” As a result, the State Board of Equalization must annually adjust a per-gallon fee charged at the pump so that it rakes in what the sales tax otherwise would have.

Confused? It’s odd. But what it means this year – as the average price of gasoline drops under $2 per gallon in many parts of the state – is that the tax will be lowered by 2.2 cents, to 27.8 cents per gallon. The board will vote on the adjustment during its meeting today, which starts at 9:30 a.m. in Culver City.

Californians consumed 14.921 billion gallons of gasoline last year, according to the board, which means each 1-cent adjustment to the tax is worth about $149.2 million. So the state is looking at approximately $328.3 million less for public roads and mass transit next year.

VIDEO OF THE DAY: Assemblyman Ken Cooley, D-Rancho Cordova, has introduced legislation to ban concessionaires at state parks if they trademark iconic names. He discussed his deeply personal connection to the dispute currently unfolding in Yosemite National Park.

LOWE PROFILE: In other weird happenings at the Board of Equalization: Is Rob Lowe’s tax dispute finally, finally coming to a resolution? The actor has spent years battling with the state over how much he owes for the $25 million-sale of his Montecito home in 2005; while officials wanted him to pay taxes on $18 million in capital gains on the property, Lowe said he should be given credit for extensive remodeling, though many of the records were missing. In November, the board ultimately settled on a $13 million tax calculation...and then reversed itself only weeks later because of confusion among members about whether Lowe should be granted an additional $1.3 million in credit for interest he paid on the house. Members will take up his case again for another vote at today’s meeting.

UP IN SMOKE: Renewing a battle to deter tobacco use among young people that the industry largely won last session, Sen. Richard Pan, D-Sacramento, is pursuing a bill that would ban cigarettes, chewing tobacco, e-cigarettes and other tobacco products within 250 feet of a youth sports event. It’s a collaboration with an eighth-grade class in Elk Grove that pitched the idea to Pan as part of an election-year project. Pan will join the students, 10:30 a.m. at St. Elizabeth Ann Seton Catholic School, to introduce the bill.

BREAST OFFER: All eyes at the Capitol are on the long-awaited MCO tax deal, which could finally get a vote this week, but until then, there is some other business to attend to. In the Senate, the Human Services Committee and the Budget Subcommittee on Health and Human Services will jointly explore the impact of closing California’s developmental centers, 1:30 p.m. in Room 4203 of the Capitol, while the Assembly Select Committee on Women In the Workplace has the provocatively-titled hearing “Establishing the Evidence-Based Value of Women's Breasts in California Workers' Compensation” at 9 a.m. in Room 127. The Senate Natural Resources and Water Committee will also join with the Assembly Water, Parks and Wildlife Committee to review implementation of the state’s historic groundwater management regulations, 9:30 a.m. in Room 4203.

FUTURE FIGHT: By various measurements, nearly a quarter of California children live in poverty, the nation’s highest rate. The Children’s Defense Fund will unveil its 2016 policy agenda to reverse that trend and expand educational equality, health care and access to the justice system for vulnerable youth, 10 a.m. in Room 317 of the Capitol. Assembly members Tony Thurmond, D-Richmond, Rob Bonta, D-Alameda, and Nora Campos, D-San Jose, and Sen. Bob Hertzberg, D-Los Angeles, are expected to join.

Alexei Koseff: 916-321-5236, @akoseff

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