Groups say new fuel, vehicle taxes disproportionately hit ag

Tim Hearden/Capital Press Cattle have just been unloaded from a trailer at the Shasta Livestock Auction Yard in Cottonwood, Calif., before a sale on April 7. Farm groups are protesting a package of fuel and vehicle tax increases passed by the Legislature to fund road improvements in California.

SACRAMENTO — Farm groups are displeased over the Legislature’s passage of $52 billion in new vehicle and fuel taxes over the next decade that they say will disproportionately impact growers.

Lawmakers late April 6 approved Gov. Jerry Brown’s more than $5-billion-a-year plan to fund major road repairs, which will hike vehicle registration fees while raising gas taxes by 12 cents a gallon and increasing diesel sales taxes from 16 cents to 36 cents per gallon.

Western Growers president and chief executive officer Tom Nassif argued the tax increases will add to the “staggering regulatory burdens and costs placed on California farmers” that “have already placed our industry at a competitive disadvantage relative to other states” and countries.

California Citrus Mutual leaders agreed.

“Any increase in transportation costs cannot be passed on to consumers,” CCM spokeswoman Alyssa Houtby told the Capital Press. “We are price takers, not price setters. Any time the government imposes fees or regulations … it directly impacts the bottom line to the grower.”

Western Growers and CCM were among more than two dozen agricultural groups that had urged lawmakers to oppose Senate Bill 1, the transportation bill by Sen. Jim Beall, D-San Jose. Other groups included the California Farm Bureau Federation, the California Fresh Fruit Association, the Almond Alliance and the California Cattlemen’s Association.

The groups asserted the new taxes will dramatically increase costs for farmers and ranchers who use large vehicles to manage their operations and bring their products to market, while a significant portion of the money will go to urban public transportation, trails and commuter corridors that are far removed from rural areas and won’t benefit the growers.

Trucks that producers use will likely be subject to the top tier for registration fees, while many agricultural vehicles are also subject to weight fees, the groups told lawmakers in an April 3 letter. New registration fees will range from $25 to $175 depending on the value of the vehicle, and the taxes and fees will rise each year with inflation.

The 20-cent-per-gallon increase for diesel fuel is “a pretty significant number,” said Justin Oldfield, the California Cattlemen’s Association’s vice president of government affairs.

“It’s a tax that everyone is going to have to pay for,” Oldfield said. “Whether you’re poor or in a business … you’re going to be required to pay it.”

However, the bill does restrict future regulations on greenhouse gas emissions for commercial trucks — a concession to the trucking industry that displeased environmentalists.

The bill passed the Senate and Assembly by the two-thirds majorities needed for tax increases after a week of campaigning by Brown, Assembly Speaker Anthony Rendon and Senate President Pro Tem Kevin de Leon.

Separately, lawmakers voted to put a constitutional amendment on the ballot next year to require that the money be spent on transportation projects. Critics have complained that existing gasoline taxes meant for roads have been diverted to balance the state’s budget.

Beall, the tax bill’s author, said in a statement the bill “updates an obsolete revenue system that fell behind the spiraling maintenance demands of more than 357,000 lane-miles” of local and state roads. The bill is based on a “user pays” model, placing the most responsibility on the shoulders of motorists who use the roads the most, he said.

Sen. Anthony Cannella of Ceres was the only Republican to support the bill, while Sen. Steve Glazer of Orinda was the only Democrat opposed. Cannella told The Associated Press he supported the bill after Brown and Democratic leaders agreed to spent $400 million to extend a commuter train from San Jose to his Central Valley district and $100 million to build a parkway linking the University of California-Merced to Highway 99.

The legislation aims to address a $59 billion backlog in deferred maintenance on state highways and $78 billion on local streets and roads, the AP reported.

Sen. Jim Nielsen of Gerber, a rancher who is the Republican caucus chairman, said California’s roads and bridges are in “third-world condition” but transportation hasn’t been a priority for Sacramento Democrats.

“This massive tax will not only impact Californians at the gas pump,” he said. “It will result in higher costs for food, clothes and other goods.”

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