A Professor's Proposal to Reduce the California Deficit (Sacramento: crime rates, how much)

[NewToCA]

Offering this up for possible discussion concerning reducing the state deficit:


California is faced with an unprecedented budget crisis. The state is also committed to significant reductions in greenhouse gases that cause climate change...The state can take a big step toward solving the budget crisis, and avoid a giant step backward on climate change, by putting a floor under the price of gasoline. There's no doubt that the $4-plus prices we experienced last summer caused a painful crunch for many households, but the economy has adjusted to prices substantially above the low-$2 range where they are now heading.

If the state were to put in a sliding-scale gasoline surcharge, it could stabilize gasoline prices at levels that a few months ago would have been celebrated by consumers and still go a long way toward filling the state's budget crater. It would also head off the return to gas-guzzling SUVs that will no doubt result if prices stay at current levels.

Here's how it would work: The state would set a gasoline surcharge that moves inversely with the price of oil. Targeting an oil price of $85 per barrel would mean that gasoline prices would stabilize around $3 per gallon. If the price of oil increased, the surcharge would automatically decline so that gas prices would stay about constant. If the price of oil went above $85, the surcharge would automatically disappear...

What can the state get out of this? More than $10 billion. That's how much the surcharge would likely raise in the first year, which would greatly reduce the deficit.


My View: Gas surcharge could help deficit, environment - Sacramento Opinion - Sacramento Editorial | Sacramento Bee (http://www.sacbee.com/opinion/story/1402967.html - broken link)

[hsw]

Moronic proposal...

Any idiot can try to raise taxes (w/some absurd excuse for new taxes) to eliminate deficits....

But top 1% of taxpayers pay some ?40% of taxes....and those taxpayers and businesses (and their jobs) can easily move out of CA if taxes become too onerous....

IL has a ~3% state income tax vs CA's ~10% state income tax....clearly, CA is already over-taxing vs peers like Chicago....CA's brilliant coastal weather and topography only goes so far to explain the higher taxes...

Pollution is a global issue....lots of overpopulation from economically underachieving countries...air pollution drifts around globe...solve overpopulation and dramatically tax leisure air travel...who the hell wants to fly to 3rdWorld countries for anything but business, to oversee low-wage sweatshops and outsourcing ops??

Prob 40%+ of any government spending is wasted paying inept/corrupt government workers and/or welfare recipients, not fixing the damn potholes in the roads; reducing violent crime rates in middle-income suburban areas...and providing competent, safe public schools to those who actually want their kids to learn to read/count....any government in world has vast room to cut costs by more efficiently using taxpayer dollars....they don't hand out government jobs and welfare money to just anyone...

[EscapeCalifornia]

Maybe we should put a tax on idiotic professors who've never had to earn a living in the real world instead. These kinds of people think they have all the answers and are capable of micro managing an economy. The last group of people that thought that way ran the Soviet Union into the ground.

[sav858]

I've actually thought about that before and felt it was a good idea. BUT the money has to be used to fund public and alternative forms of transit though so people have an affordable alternative to driving. I don't think it should be used JUST to shore up deficits but to improve the crumbling infrastructure and crappy PT in the state.

[bhcompy]

i believe taxing gas at its own rate(which is a sin/excise tax) for more than transporation related use is plain unfair taxation

[Orchardcounty]

Originally Posted by NewToCA

Offering this up for possible discussion concerning reducing the state deficit:


California is faced with an unprecedented budget crisis. The state is also committed to significant reductions in greenhouse gases that cause climate change...The state can take a big step toward solving the budget crisis, and avoid a giant step backward on climate change, by putting a floor under the price of gasoline. There's no doubt that the $4-plus prices we experienced last summer caused a painful crunch for many households, but the economy has adjusted to prices substantially above the low-$2 range where they are now heading.

If the state were to put in a sliding-scale gasoline surcharge, it could stabilize gasoline prices at levels that a few months ago would have been celebrated by consumers and still go a long way toward filling the state's budget crater. It would also head off the return to gas-guzzling SUVs that will no doubt result if prices stay at current levels.

Here's how it would work: The state would set a gasoline surcharge that moves inversely with the price of oil. Targeting an oil price of $85 per barrel would mean that gasoline prices would stabilize around $3 per gallon. If the price of oil increased, the surcharge would automatically decline so that gas prices would stay about constant. If the price of oil went above $85, the surcharge would automatically disappear...

What can the state get out of this? More than $10 billion. That's how much the surcharge would likely raise in the first year, which would greatly reduce the deficit.


My View: Gas surcharge could help deficit, environment - Sacramento Opinion - Sacramento Editorial | Sacramento Bee (http://www.sacbee.com/opinion/story/1402967.html - broken link)

Firstly, thank you for sharing this, I didnt expect to find such a gem on this forum, I normally use this site for travel advice etc, not work.

This is an excellent proposal and will certainly save billions of dollars. However, the biggest plus in the proposal is probably the trigger affect on changing consumer buying behaviour of the masses. The SUV gas guzzlers are unsustainable, it is time that meaningful initiatives were taken to try and wean the masses off these type of vehicles in preparation of the launch of next generation technologies that will progress the whole sustainability agenda. The obvious common denominator is cost. The energy efficiency agenda and green agenda are the future of the US technological and economic surge, and silicon valley is already leading the way with the impressive advancements in electronic cars etc. I think the type of thinking behind your proposal can help influence the climate of public opinion in your state, and make people question their 'real need' for gas guzzling vehicles etc. And perhaps even revise this $3 rate in the next period.

It takes a very long time to bring the masses with you for big changes to the way they live, whether that is trying to implement assistive technologies in the home, or energy efficiency solutions. Ask Nokia how long it took the consumer to actually use SMS or ask healthcare companies and systems why they are failing to implement the next wave of new technologies. I think in each area, whether it is energy efficiency, healthcare or e-services, there is common problems, technology deficit of the consumer and the consumer wanting to engage and change their lifestyle habits. Hence, the gasoline surcharge in the medium to long term would be a great facilitator. It will not only save the state billions of dollars but start to prepare the ground for the next wave of innovation from silicon valley. That is where the new jobs or going to come, that is what is going to revitalise the automobile industry and that is why the US will still be the world leader for blockbuster technological innovations. It will just take the laggards a little longer to understand and appreciate this

[NewToCA]

I see a few issues here, for and against the proposal.

As the author states, it is a means of potentially accomplishing two goals. This would be especially helpful if it helps encourage folks to provide more consideration to higher mileage vehicles, which would really assist in helping stabilize oil prices if done on a very large scale nationally. California has had a budget problem for an extended period of time now, and it isn't being resolved though our current political discussions.

The risks that I see involve a couple of things, starting with the oil market itself. We have seen how rapidly the oil prices per barrel can rise and fall, and depending upon this proposed tax would be a bit precarious if oil prices suddenly rose again. Where would the replacement revenue come from if oil rapidly hit the $80 to $85 dollar range again? I'm concerned that the politicians would simply "up the target" to a higher price range based upon their desire to maintain the revenue stream and a lack of willingness to commit to alternative backup revenue sources.

My second concern is that this might make it too easy to exclude a good critical evaluation of expenditues, since the assumption would be that this proposal would generate sufficient revenue to cover the current cost of programs.

Overall, I think it is an interesting item to evaluate, both in terms of potential benefits and risk.

[VLWH]

California has already the highest tax on gas, by all means lets add more.

Originally Posted by NewToCA

Offering this up for possible discussion concerning reducing the state deficit:


California is faced with an unprecedented budget crisis. The state is also committed to significant reductions in greenhouse gases that cause climate change...The state can take a big step toward solving the budget crisis, and avoid a giant step backward on climate change, by putting a floor under the price of gasoline. There's no doubt that the $4-plus prices we experienced last summer caused a painful crunch for many households, but the economy has adjusted to prices substantially above the low-$2 range where they are now heading.

If the state were to put in a sliding-scale gasoline surcharge, it could stabilize gasoline prices at levels that a few months ago would have been celebrated by consumers and still go a long way toward filling the state's budget crater. It would also head off the return to gas-guzzling SUVs that will no doubt result if prices stay at current levels.

Here's how it would work: The state would set a gasoline surcharge that moves inversely with the price of oil. Targeting an oil price of $85 per barrel would mean that gasoline prices would stabilize around $3 per gallon. If the price of oil increased, the surcharge would automatically decline so that gas prices would stay about constant. If the price of oil went above $85, the surcharge would automatically disappear...

What can the state get out of this? More than $10 billion. That's how much the surcharge would likely raise in the first year, which would greatly reduce the deficit.


My View: Gas surcharge could help deficit, environment - Sacramento Opinion - Sacramento Editorial | Sacramento Bee (http://www.sacbee.com/opinion/story/1402967.html - broken link)

[Orchardcounty]

I think it is a much broader policy issue than simply saving a lot of money, which will, as you say carry market risks. I see this type of policy as being a part of a wider economic strategy, rather than a standalone intervention. If it is a standalone intervention, it will likely deliver the inefficiencies that you mention, especially, at the behest of politicians. I think there are issues of technology readiness, synergy of energy policies and budgeting that need some kind of alignment. That said, there is always a danger that government will get in the way, they normally do, but they are key stakeholders, so their involvement is unavoidable.

[Lafferty Daniel]

For starters, they should think about taxing medicinal marijuana to help get our state out of the red. Marijuana is our nation's largest cash crop, and it's headquatered in CA.