By Dave Roberts

Assembly Democrats, many of whom see themselves as champions of the downtrodden, instead became reverse Robin Hoods recently, robbing from the poor and middle class to give to the rich. Nearly every Democrat along with two Republicans approved AB 8 on June 27, which extends until 2024 a variety of vehicle fees that were due to expire next year.

Some of those fees, which are the same whether they are imposed on a $500 clunker or a $387,000 Lamborghini, subsidize the purchase of electric vehicles -– the kind of cars that tend to be purchased by the wealthy. The typical recipient of the state’s clean vehicle rebate earns more than $150,000 per year, according to the legislative analysis for AB 8.

Purchasers of Nissan Leafs receive a $7,500 federal tax credit and a $2,500 rebate from California taxpayers. More than 6,700 rebates had been dispensed as of Dec. 31, 2012. Nearly 450 rebates were also handed out to buyers of the Tesla Model S, which costs $70,000 for the base model and can exceed $100,000 with upgrades. As an added bonus, electric vehicle owners don’t have to pay the smog abatement fee that funds their rebate.

Subsidizing infrastructure for $200k cars

In addition, AB 8 authorizes spending $220 million from vehicle registration fees to fund the development of up to 100 hydrogen fueling stations. You’ll need to shell out nearly $200,000 to buy a hydrogen-powered car.

Sticking poor and middle class Californians with the tab in order to give hundreds of millions of dollars to benefit rich Californians was one of the concerns raised by Assemblyman Tim Donnelly, R-Twin Peaks, before the floor vote:

“This bill is going to cost taxpayers $2.3 billion over the next eight years. What are we doing creating a hydrogen highway that a handful of Californians are going to use, but we’re taxing every single driver? Every single Californian that is on their way to work right now is going to have to pay for something they may never use, may never be able to afford to use it. And we don’t have enough money in California to subsidize hydrogen vehicles for everybody. Maybe I shouldn’t give you any ideas.

“This is a terrible idea. It is a regressive tax. It is a tax that is going to hit the hardest working, most vulnerable, lowest income people where it hurts the most. The cost of fuel is continually going up. And every time we pile more taxes on those who drive an automobile, we are taxing progress. We are taxing the people who say, ‘Hey, I’m not just going to sit around and collect a check. I want to go to work.’ And we are creating an obstacle to them bettering themselves by their own efforts.”

Several Democrats defended the extension of the vehicle fees, arguing that the money is necessary to reduce air pollution.

“Californians suffer from the worst air pollution in the nation with over 90 percent of residents living in counties with unhealthy air,” said the bill’s author, Henry Perea, D-Fresno. “While great progress has been made in improving air quality, California has two of the most polluted regions in the nation: the South Coast air basin and the San Joaquin Valley. AB 8 seeks to expand California’s clean air and clean vehicle incentive programs in order to meet clean air, public health, climate and economic development goals.”

“Let’s not burden our constituents again and again and again”

Don Wagner, R-Irvine, acknowledged “that there are some good things to like in this bill.” But he argued that the cost is too high.

“What we are doing here is raising $250-$275 million each year on your constituents,” said Wagner. “And there’s no good reason for that. You can’t keep going back to the tax well over and over and over again. At some point we’re going to have the cleanest air in the world because we will have driven everybody out of the state. This is not the way to go. Let’s not burden our constituents again and again and again.”

A Senate version of the bill, SB 11, has been referred to the Senate Committee on Natural Resources and Water. SB 1455, which was nearly identical to AB 8, passed the Assembly last year but failed to gain the necessary two-thirds support in the Senate.

By John Hrabe

With a Democratic supermajority, Republican votes no longer are needed to increase taxes in the California Senate. Yet in a strange development, five GOP senators backed a tax increase anyway.

SB 11 is a $2.3 billion tax “extension” co-authored by a Democratic state senator, Fran Pavley of Calabasas; and by a Republican state senator, Anthony Cannella of Ceres. It passed the full Senate, 32-5, with two not voting and one vacancy.

Of the votes, 27 were from Democrats, or 67.5 percent, which was above the two-thirds supermajority threshold in the 40-seat Senate to raise taxes.

Yet in addition to Cannella, Republicans voting for it were Senate Republican Leader Bob Huff of Brea and Sens. Bill Emmerson of Redlands, Jean Fuller of Bakersfield and Mimi Walters of Irvine. Although Cannella did not, the latter four all signed the Americans for Tax Reform’s Taxpayer Protection Pledge, a solemn promise never to raise taxes.

Total: Out of the Senate Republican Caucus’ small membership of 11, five voted for SB 11.

The Senate Republican Caucus’ own analysis identified the bill as “the continuation of billions of dollars of vehicle registration fees and tire taxes for eight years.” Yet not a single Senator, Republican or Democrat, spoke against the bill.

None of the Republican senators who signed the anti-tax pledge responded to CalWatchdog.com’s request for comment on their tax flip-flop. A spokesman for Huff referred comment to a YouTube video (provided below), in which Huff referenced his vote.

“What we did this week was we extended fees for smog abatement, registrations, tire purchases,” Huff said in a 40-second explanation of his tax extension vote. “I wouldn’t normaly do that. But the bill was tied to easing regulations, burdens imposed on gas stations, truckers, ag equipment. And so it was one of those situations where you were taking a bad situation and making it better. ”

GOP analysis: Tax extension is “hefty price to pay” 

Huff’s argument that industry incentives are worth a multi-billion-dollar tax increase is disputed by his own caucus.  An internal Senate Republican Caucus bill analysis obtained by CalWatchdog.com found:

“The continuation of billions of dollars of vehicle registration fees and tire taxes for eight years is a hefty price to pay. This bill would result in fee extensions of $8 in smog abatement, $18 for vehicle registrations, $10 on boat registrations, and $0.75 per tire on consumers annually until the year 2024.

The analysis included an all-caps warning that the bill imposed “VERY MAJOR STATE COSTS AND REVENUE INCREASES.” And it quoted this analysis from the Howard Jarvis Taxpayer Association:

“SB 11 has been keyed as a two-thirds vote tax increase. The cumulative impact of these exactions will result in a $2.3 billion tax extension.”

GOP Caucus: Not a tax increase

Bill Bird, a spokesman for Huff, denied the bill is a tax increase. “The pledge states the legislator will not vote to RAISE taxes. He didn’t,” Bird said of Huff’s vote.

This nuanced interpretation of what constitutes a tax increase is contradicted by none other than Huff himself. In 2011, when Senate Democrats proposed legislation to grant local governments the authority to raise taxes, Huff gave a fiery speech against what he dubbed the “I Love More Taxes Bill of 2011.”

“Our staff believe it’s in violation of Prop. 26, which reads, ‘Any change in state statute which results in any taxpayer paying a higher tax must be imposed by an act passed by not less than two thirds of all members elected to each of the two houses of the legislature,’” Huff said. “What are we doing? We’re creating something on a majority vote that will facilitate raising taxes.”

Huff even took time to acknowledge the nuance of the “I Love More Taxes Bill of 2011.”

“This in itself doesn’t raise taxes,” Huff said. “Local government already has the ability to raise taxes, but it gives them more taxes they can raise on a majority vote.”

Just a month ago, Huff was warning that high tax rates hurt the economy. “Higher tax rates and continuing high unemployment mean less money in people’s pockets and less money to propel the economy,” he said in a press release in response to the Gov. Jerry Brown’s May Revision budget proposal for fiscal year 2013-14, which begins on July 1. “The Legislature should spend less time on a growing list of additional tax proposals.”

Taxpayer groups: A tax extension is a tax increase

Patrick Gleason, the director of state affairs at Americans for Tax Reform, which organizes the “Taxpayer Protection Pledge,” said his group considers a tax extension a violation of the pledge that Huff, Emmerson, Fuller and Walters signed.

“Legislation that would extend a tax scheduled to sunset is a tax increase,” Gleason said in an email.

The Howard Jarvis Taxpayer Association adds that Republican legislators could face a backlash for breaking their promise to their constituents.

“We’re not sure legislators fully grasp how this vote will be perceived by all the drivers — most of whom are voters — in their districts,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “The backlash will be severe.”

Huff is no stranger to taxpayers’ backlash for halfhearted promises. In 2009, some taxpayers launched a failed recall for what they considered Huff’s failure of leadership to protect taxpayers from the largest tax increase in California history. That was the $13 billion signed into law that year by Gov. Arnold Schwarzenegger, with the help of two Republican state senators and two Assembly members. In his rebuttal to the 2009 recall attempt, Huff clarified that he never voted for the tax extension, and therefore had not violated his tax pledge.

Huff also opposed Proposition 1A, a May 2009 initiative pushed by Schwazenegger that would have extended the tax increases. It was defeated heartily by voters, 65-35.

“While these reforms became linked to a two-year extension of taxes and packaged as Proposition 1A, Huff didn’t vote for the budget, the tax increase or the extension,” Huff’s recall rebuttal stated. “Bob Huff has not violated his pledge to not raise taxes!”

Huff vs. Huff: “Doesn’t Fix the Real Problem”

SB 11, Huff argues, is a compromise to offer temporary relief to struggling industries.

“I wouldn’t normally do that, but the bill was tied to easing regulations of burdens imposed on gas stations, truckers, ag equipment,” Huff said in his May 31 Capitol Comment. “It was one of those things where you’re taking a bad situation and making it better.”

In April 2011, for the same reason Huff opposed a tax extension proposed by Democrats during budget negotiations. He said, “I have often said an extension of the taxes doesn’t fix the real problem.”