Wednesday, March 26, 2008

Gas Tax

Yesterday's San Francisco Chronicle informed us that the skyrocketing price of gasoline is driving up the income the state gets from the gasoline tax; no surprise there. However, the state legislature is squabbling over how to spend this "windfall," given that the economy is in a major recession and the state is facing a whacking deficit, which the Governator has managed to bring down to "only" $8 billion.

But they have a problem: gas tax revenues are legally earmarked to be spent on - surprise! - transportation issues. The Lege, however, sees an opportunity to plug some financial holes without having to do any actual work - all they have to do is suspend the transportation requirement, or "borrow" the funds.

I have a suggestion for our brilliant legislators: you have a surplus in transportation funds. How about fixing some roads? Upgrading some bridges? How many bridges and overpasses in California are in the same bad state as the one that collapsed last year in Minneapolis? Do you even know how many??

We need the infrastructure repairs - many roads are in a disastrous condition. Fixing roads involves hiring people for construction jobs, which would put money back into local economies.

The Assembly's position on this is pretty much summed up by this quote:

"This will be a huge issue because there aren't many moving parts of the budget that are moving up in revenue," said Assemblyman John Laird, D-Santa Cruz, chairman of the Budget Committee.

While as a matter of public policy it makes most sense to keep gasoline sales tax receipts for transportation projects, "we have an $8 billion hole. And if the governor is proposing cutting dental care for adults in California, how does that weigh?" Laird said.

Well, Mr. Laird, I thought that was why we paid all you legislators the big bucks. You're expected to make difficult decisions, and frankly, I thought you were expected to run the state on the money you know will come in, not on the money you think might come in if everything goes well and the economy keeps going up.

If the California Legislature will quit playing prima donna and devote some actual energy and thought to the process called "budgeting" (which most of us mortals have to do all the time), maybe we can get to a point where
a drop in the economy won't cause the state to leap immediately to cut health care for poor people and their children. We might have to make do with a lower level of services in general, but if that level were stable, it would be a whole lot better than we have now.

1 comment:

  1. April 02, right around the corner.

    Our local roads are literally crumbling under our tires.

    I grew up during a building boom. Booming housing. Booming office buildings. Booming schools. Booming new highways, super highways. Dams, bridges and airports.

    Sometime during the 1980's-'90's, the engine began to slow down. Frankly, the "infrastructure" in the U.S. has been decaying steadily for about 30 years.

    One of the symptoms of a decadent society is the gradual breakdown of its grid. You don't notice it right away, perhaps, but over time things begin to change. Money has steadily been flowing OUT of America now for three decades. What that means is that there's less money for government at all levels. When big business moves overseas, that has real consequences. Moving almost the entire automobile manufacturing economy away has consequences: Thousands and thousands of people no longer pull down middle-class salaries, and that has a "ripple effect" throughout the economy at large. Then, the profit derived from the overseas business is moved offshore so the taxmen can't get their mitts on it.

    The state legislature may seem like they're spendthrifts, but that's an illusion. The fact is that the revenues in inflation-adjusted dollars have been falling for a long time.

    America moved from an agrarian economy in the 19th Century, to a manufacturing economy in the 20th Century, to a "service" (non-manufacturing) economy. What that means in practical terms is that most people--the blue collar, white collar and laboring classes--earn between 1/5th and 1/4th what they did 50 years ago. It becomes clearer when you factor in just what these new "service" jobs carry in the way of "benefits." A man who might have worked at GM in the 1950's and 1960's for an adjusted annual salary of perhaps $75,000, with full benefits and pension, now may expect to find a job paying $30,000, with NO job security, no health plan, no pension. And in some cases he'll be treated as an "independent" contractor, so he won't even get disability, worker's comp or social security coverage.

    So, yes, roads. The larger question is how to generate home-grown investment. Obviously the Republicans mantra of "tax cuts! tax cuts!" won't do the trick. The rich are smart; they know domestic investment isn't encouraging, so they put their money where the growth is. Even if high tech looks attractive, and thrives, most of the cash flows overseas, where all that "stuff" is produced, much of it sold back to us at inflated prices.

    Roads are a symptom. Look around, folks. The evidence is everywhere. We're watching the beginning stages of a long term decline. The public purse is shrinking. That means less money for all the things a democracy depends upon, like schools, police & fire, judicial and prison system, public works, infrastructure, welfare, parks & rec--everything. The rich are making sure that shrinking pie is cut their way. That's why lobbying has become so important to our political life: Capital is playing to win. Are we?