$18 million state deficit solution coming; prepare for the gas "fee"

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A Sacramento source has sent down a plan that legislators are expected to vote on tonight. Basically it increases cuts some taxes, raises other taxes, and takes on more long-term revenue in return for more short-term revenue. The idea is to get the state to be solvent enough to borrow again so that the state does not become insolvent in February. Desperate times, desperate measures, etc. etc.

The questionable part for me though, is that Democrats plan to pass this plan without Republican support, claiming they don't need 2/3 support because in the long run, there is not a net increase in taxes. That might be true- this plan is pretty complicated to read- but I can certainly decipher that the legislature is planning a gas "fee" that will ultimately, even after some other gas taxes are reduced, lead to consumers paying an extra 13 cents per gallon at the pump. How can that be legal without a 2/3 vote? I'm waiting on the answer for that.

UPDATE: Capitol Alert, the Sacramento Bee's blog seems to have about the same information I do in terms of the gas fee legality:

In a single bill, Democrats will eliminate the sales and excise taxes on gasoline and replace those taxes with higher income taxes, sales tax and an oil severance tax.

The total revenues collected will turn out the same in that bill.
But the Democrats will then vote on a different piece of legislation to replace the old gas sales and excise taxes (which only went to transportation needs) with a gasoline "fee," to be set at 39 cents per gallon.
Because they are raising a "fee" and not a "tax," Democrats believe (and they say their lawyers have approved) they can do this will a majority vote.

In other words, it is legal because we say it is legal. It sounds like this issue may end up being resolved in a court, if it passes through the governor, that is.

Btw, Capitol Alert has an extremely extensive breakdown on all the taxes and cuts and is well worth looking at.

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UNDER THE DOME

Dan Abenschein
Pasadena -- news, politics and gossip. Send tips, rumors, rants to Dan Abendschein dan.abendschein@sgvn.com.

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This page contains a single entry by Dan Abendschein published on December 17, 2008 4:11 PM.

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