If there’s one idea the re-election campaign of Gov. Arnold
Schwarzenegger has tried to establish in voters’ minds more than
any other, it is the sense that Democratic challenger Phil
Angelides will raise taxes, while Arnold will not. Never. Ever. He
says it repeatedly.
If there’s one idea the re-election campaign of Gov. Arnold Schwarzenegger has tried to establish in voters’ minds more than any other, it is the sense that Democratic challenger Phil Angelides will raise taxes, while Arnold will not. Never. Ever. He says it repeatedly.
If there’s one idea Angelides has stressed in response, it’s that any new taxes he backs would apply only to the very rich (income of $500,000 per year and up) or to giant corporations like banks and oil companies.
There’s nothing unique in these messages. They have keynoted almost all major state and national campaigns for the last 22 years, ever since Democrat Walter Mondale promised to raise taxes a tad while trying to unseat Republican President Ronald Reagan in 1984 – and got creamed for his honesty.
Something else that’s not unique: The claims of both candidates this fall are deceptive. For taxes – including natural gas and electric bills, gasoline prices and other fees every Californian has to pay, whether they are formally called taxes or not – will rise no matter who wins in November.
One indicator of this reality got a little bit of exposure on a warm day last summer when state legislators staged a hearing on ways to develop alternative fuels and significantly lower California’s oil and gas consumption.
On hand was Michael Smith, director of governmental affairs for the state Energy Commission, whose members all are appointed by the governor. By 2025, he said, California will need 5.8 billion gallons more gasoline each year than current refineries can produce.
“This means we need to reduce demand for gasoline. We need 20 percent of our fuel to be alternate fuels like ethanol or biodiesel or the like by 2020,” he said. “So the commission is recommending a public goods charge to establish a long-term, secure source of funding for alternative fuel development.”
“Public goods charge?” Sounds a lot like a tax, someone pointed out to Smith. “I don’t know the accounting situation, but we recommend this be levied on every gallon of gasoline or diesel,” he responded.
Does that mean the Schwarzenegger administration is pushing a gas tax increase? Not exactly, Smith said. This is only Schwarzenegger’s appointees calling for a new charge, not him.
In the meantime, as his commission plumps for an added per-gallon charge (not called a tax, mind you, but a “public goods charge”), the governor firmly opposes Proposition 87, which would set up precisely the kind of fund the commission seeks, but raise the money via a royalty on oil drilled in California. Schwarzenegger doesn’t like this because it’s a tax, but has yet to oppose the “charge” his commissioners want.
Angelides, meanwhile, wholeheartedly endorses Proposition 87, saying it could make California the world’s alternative fuels leader. The difference: Oil companies would pay under Proposition 87, all drivers under the Energy Commission scheme.
Either way, consumers will pay more, or does anyone really believe the Proposition 87 provision forbidding oil companies to pass the new royalty charge on to consumers can be enforced?
No one wants to call this a tax, but is there any doubt about what it really is or that it’s coming, no matter who wins?
Similarly, Schwarzenegger has plumped this fall for setting up health clinics in hundreds of public elementary schools, while Angelides wants universal health coverage for every child in the state. Schwarzenegger says there can be new health clinics without any new tax, but he doesn’t say where money for them will come from. Angelides says he’d tax the rich.
Either way, it’s inevitable someone will pay, somehow, whether the cost is formally called a tax or not.
Both Schwarzenegger and Angelides want more power plants built in California. They differ mainly in that Schwarzenegger wants them built by unregulated generating companies, while Angelides would rather see regulated utilities construct them, as they always did before deregulation arrived in the late 1990s.
Electric consumers have already seen several rate increases over the last two years, amounting to a total of almost 20 percent of previous bills. No one doubts new power plants are needed, but anyone who says rates won’t rise to pay for them is deluded. This is a charge everyone must pay. Politicians won’t call it a tax, but it might as well be.
Both Schwarzenegger and Angelides back the $38 billion in construction and repair bonds on the November ballot as Propositions 1A to 1E, along with the more than $30 billion in interest the state would pay to finance them over 30 years. That money would be added to the state budget each year, which may force tax increases no one even dreams of today.
It’s pretty simple: Both Schwarzenegger and Angelides want improvements in California and neither wants to admit the bulk of citizens will have to pay for them. But someone will pay. And if not us, who?
Tom Elias is author of the bestselling book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It.” His e-mail address is
td*****@ao*.com
