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March 23, 2023                                                                                        916.553.4093

SBX1-2 TAX INCREASE PROPOSAL WILL REDUCE LEGISLATIVE ACCOUNTABILITY AND DRIVE UP THE PRICE OF GAS AT THE PUMP

SACRAMENTO— Today, the California State Senate took an aggressive step toward allowing unelected state bureaucrats to regulate business profits and drive up costs on working families, all while removing accountability and oversight by elected officials whose constituents will end up paying the higher prices.

“SBX1-2 is bad policy, bad precedence, and simply a bad solution to a problem the governor and Legislature created themselves. High gas prices in California are a direct result of policies and regulations pushed by the governor and the bureaucrats he appointed,” said Rob Lapsley, president of the California Business Roundtable, one of many in a broad and diverse coalition of state, regional, and local business advocacy associations strongly opposing the bill.

“The governor’s proposal to shift responsibility for the windfall profits tax to a new entity in the California Energy Commission doesn’t change the fact that this is a tax that will be paid by all Californians—whether through higher prices at the pump or higher costs for essentials like groceries,” Lapsley continued. “This approach is completely unnecessary and costly. The Attorney General already has subpoena power, the ability to investigate price gouging, and the authority to prosecute alleged violations. In fact, every Attorney General in the last decade has begun price gouging investigations on gas prices, but none of these investigations have uncovered any wrongdoing. Currently, they can coordinate these efforts with the California Energy Commission, as needed.

“This new proposal is just a plan to limit legislative accountability and oversight, shifting taxing authority to unelected bureaucrats, without addressing the inconvenient truth that California-specific regulations and policies that have driven up the cost of gasoline for working families. With the affordability crisis only getting worse for working families across the state, the governor and Legislature should be focused on ways to reduce costs and increase bureaucratic accountability, not expand it at the expense of California families and businesses.”

THE FACTS:

• California gasoline prices are consistently the highest or second highest in the nation because an unelected bureaucracy already has been increasing the costs without legislative oversight.
   
• Of the six factors driving gas prices on the Energy Commission’s website, four are the direct result of California policies and regulations:
  • An isolated refinery market
  • California-specific cleaner fuels blend
  • California-specific environmental program costs
  • California taxes

• The governor’s proposal just repeats the same bad policy that has been in place for the California Air Resources Board, which has directly created or contributed to the factors cited by the Energy Commission.

• If the governor’s proposal is passed, two separate unelected bureaucracies would have the authority to raise the cost of gasoline unchecked by the Legislature or governor.

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