July 2002

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Cal-Tax Commentary 

Larry McCarthy is president of the California Taxpayers’ Association (Cal-Tax).

The Legislature’s rushed – some say “sneaky” – passage of AB 1493 (Pavley), the anti-SUV and minivan bill, should alarm Californians as the beginning of a very high-risk time.

AB 1493 came from virtually nowhere on Saturday, June 29, when the Senate was meeting in an unsuccessful effort to resolve the 2002-03 budget impasse. Without public notice, AB 1493 was gutted and amended to become substantially the same “greenhouse gas” bill (AB 1058) that was stalled in the Assembly. So many Californians had responded to a massive media blitz with calls and letters to legislators about the potential impact of the measure that AB 1058 was simply too hot to handle politically.

Backers – environmentalist groups and their allies – rightly figured that any movement of AB 1058 wouldn’t go very far. The number had been made synonymous with “bad” legislation that would make driving more expensive in this state.

While the Senate was in a rare weekend floor session because of the state budget impasse, Senate President Pro Tem John Burton slipped the amendments into AB 1493, and, before opposition could mobilize, gained enough Democrat votes to get it to the Assembly.

On Monday, July 1, the bill was rushed through the Assembly to the governor’s desk, with only a quickie “public” hearing in a cramped and crowded room without normal public notice. Thus there was no real opportunity for open debate with public participation. In fact, the hush and rush applied to this bill were calculated to minimize public input. This is an abject abuse of the legislative process.

The bill, as amended, says the California Air Resources Board (CARB), while coming up with aggressive regulations to reduce carbon dioxide emissions, cannot impose a tax or a fee, or ban a particular vehicle. The board cannot do any of these things – but it is required to adopt regulations that might not work without them. The Legislature would be empowered to ratify the board's plan of action. What is to prevent the Legislature of the near future from holding a midnight Saturday session to make it more expensive to own and drive an SUB or minivan, or other vehicle?

That's why what happened in the dark of the Sacramento night on June 29 should be of concern to Californians. It was excessive violation of an open democratic process. Taxpayers deserve better.

Governor Davis has vetoed legislation for violations of the legislative process that shut out public input. We think he should do the same with this egregious bill.

AB 1493 would:

• Establish a substantial new tax-funded bureaucracy in California.

• Raise taxes paid by Californians to register their cars. Few dispute that the bill will increase the cost of automobile ownership in California. The vehicle license fee (property tax on cars) paid when cars are registered is based on the value of the car. AB 1493 will force higher taxes on Californians from higher VLF taxes that automatically go up as the costs of automobiles increase. A similar pattern was seen in the 1970s when costs of homes increased property taxes. The public's reaction was Proposition 13, which limited the amount of property tax homeowners could be forced to pay.

• Threaten a substantial and possible illegal delegation of authority to state bureaucrats and set a damaging precedent for other pass-the-buck moves that will have damaging impacts for California taxpayers and the state's economy.

While the bill prevents CARB from imposing other new taxes or fees, it is a provision of the bill that could be changed by a majority vote of the Legislature.

At a time when California is facing major financial problems, the Legislature and governor are about to create a vast new bureaucracy of unelected, unaccountable bureaucrats to tell Californians what kind of cars we drive. California taxpayers pay more than $250 million annually to finance the Legislature in its law-making, oversight and budget-making authority. Californians deserve a more careful and deliberative process than what was rendered with AB 1493.

The lack of policy review of AB 1493 again distinguishes California as a place where state government can radically increase the costs of living and operating businesses, underscoring that the state is an unpredictable place and can spin out of control virtually overnight. To have any hope for sustaining economic investment in the state, California must avoid this kind of precipitous action.