Arnold Schwarzenegger proposes to slash spending on health care for children, the developmentally disabled, elderly shut-ins and many others.
The governor himself denounced the cuts he proposes as "draconian." But in the budget Schwarzenegger unveiled on Friday, one group stands to receive a $158 million boost: gas station owners and marketers to help pay to clean up storage tanks that have leaked.
The biggest beneficiaries ultimately will be big oil companies, which have bankrolled campaigns for decades.
As the budget drama unfolds in the coming months, Democrats will squawk about cuts to social services and health care. Republicans will throw themselves in front of any effort to raise taxes. But few if any of them will rise up to denounce the gift for gasoline retailers.
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Why? With virtually no opposition, Republicans and Democrats in October quietly approved a gasoline tax increase that will provide the $158 million. The tax hike took effect immediately after Schwarzenegger signed the bill into law in November.
Bipartisanship is laudable. But in the case of this law,
AB 1188, one has to wonder why legislators were so eager to join hands.
Perhaps the oil industry's influence had something to do with this warm and fuzzy moment.
The tax bump is minor. It increased to 2 cents per gallon of gasoline, up from 1.4 cents. On a 20-gallon fill-up, we're all paying 40 cents to owners of underground storage tanks rather than 28 cents.
Say you drive 20,000 miles and get 20 miles to the gallon. Your annual bill for leaking underground storage tanks will be $20, rather than $14. Not much. But given the number of drivers in the state, the tax is expected to bring in more than $250 million.
In the Assembly, there was one no vote, cast by Joel Anderson, R- Alpine. In the upper house, Sen. Dennis Hollingsworth, R-Murrieta, and Sen. Lou Correa, D-Santa Ana, voted no.
"It amounts to an increase in gas prices to consumers," Hollingsworth said in a statement.
"It was a Band-Aid," Correa said, adding that the program ought to be overhauled. "When you can solve an issue like this with regulatory reform rather than a tax, you should."
The original idea behind the tax was fine. The program, which dates to 1991, was intended to help individuals and owners of one or two gas stations pay to clean up storage tanks that were leaking and fouling groundwater.
But from the start, big oil retailers, led by Western States Petroleum Association, used their influence to lay claim to part of the fund.
The California Independent Oil Marketers sponsored the latest legislation on the topic, AB 1188 by Assemblyman Ira Ruskin, D-Redwood City. The measure emerged Sept. 2 during a session focused on an array of last-minute deals.
On Sept. 14, the independent oil marketers' political action committee donated $24,150 to three dozen legislators.
To be sure, the independents will benefit most directly. They are first in line to collect payment, and the program had run short of money in 2009, largely because the recession had led to lower tax collections.
The big guys will win, too. Under the law, major gasoline retailers cannot collect reimbursements for the money they have spent to clean up their leaking underground storage tanks until the state pays smaller owners.
Based on their third quarter 2009 lobbying reports, the big oil companies were not directly involved in the latest legislative effort. But the industry was behind legislation in 2008 and in 2004 to extend the tax. Lawmakers readily approved the bills, and Schwarzenegger signed them.
There are roughly 4,400 pending claims from businesses seeking $1.1 billion in reimbursement for replacing tanks.
Union Oil, Chevron, Shell, Conoco, Exxon, BP and 7-Eleven have roughly
$900 million in pending claims, according to the State Water Resources Control Board.
Big campaign contributions have been known to create "Kumbaya" moments in the Legislature. In the decade just ended, the oil industry spent more than $100 million on California campaigns. Chevron alone spent $49.6 million in the decade, including $1.3 million in 2009.
Oil and water may not mix. But oil and campaign money, and the access it buys, flow together well.
THE SACRAMENTO BEE