Apparently the sixth highest state & local tax burden, 3rd highest state marginal income tax rate, highest sales tax in the nation, highest corporate tax rate in the west, second to worst business tax climate, and a structural government overspending problem isn't enough for California lawmakers, who, in the last week of the legislative session, are scurrying to round up the votes to extend a tax on every Californian's utility bill that is slated to expire at the end of this year.

AB 724 and SBx1 28, which would extend the "temporary" utility tax enacted in 1996 and known as the Public Goods Charge, amounts to a $3 billion plus tax increase on Golden State families and businesses over the next decade. Sacramento politicians think taxpayers should be willing to pay articificially increased utility bills, despite the fact that Californians already foot the bill for one of the most bloated state governments in the country and have electricity costs that are 50% higher than the national average. Worse, the money from this tax goes into a slush fund that is doled out to politically connected green boondoggles like Solyndra.

AB 724 and SBx1 28 require at 2/3rds majority vote to pass, so two Republican votes in each chamber will be required to enact this $400 million per year tax hike. Below is the letter that ATR president Grover Norquist sent to all members of the California legislature this morning:

Dear Members of the California Legislature,

I strongly urge you to oppose and vote against AB 724 and SBx1 28, which authorize the extension of a “temporary” utility tax that pilfers approximately $400 million from Golden State households every year.  The extension of the public goods charge (PGC) program would impose an extra and unnecessary burden on California taxpayers struggling to get by in this tough economy.

One fact about the public goods charge is undeniable; voting to extend it is a vote for higher taxes. For lawmakers who have signed the Taxpayer Protection Pledge, a vote in favor of AB 724 and SBx1 28 is a violation of your commitment to constituents to “oppose and vote against any and all efforts to increase taxes.”

Just last week the grim news was received that there was no monthly net increase in American jobs for the first time since the 1940s. Yet in California, the reality is even gloomier when it comes to jobs, with unemployment hovering at 12%, over 1/3rd higher than the national average. Gov. Jerry Brown gave a speech on the need for job creation two weeks ago. One easy way for lawmakers to incentivize job creation would be to allow the PGC to expire, reducing the cost of living and doing business, thereby increasing job-creating capacity for employers, especially those in energy intensive industries.

The public goods charge was first put into place in 1996 in order to stimulate the production of energy from renewable (read: expensive) sources. Yet many additional renewable energy mandates, regulations, and programs have been implemented since the PGC program was first enacted. Simply put, the PGC program has become superfluous, redundant, and unneeded.

Californians worked from January 1st until August 18th this year just to pay for the cost of government. At 230 days, that’s well over half the year and far too heavy a burden. Voting against AB 724 and SBx1 28 will provide needed relief to overly-burdened Golden State taxpayers. On behalf of our California members, Americans for Tax Reform urges you to reject AB 724 and SBx1 28 in its entirety. The outdated utility tax should be left to expire, granting Californians relief that they direly need.


Grover G. Norquist

President, Americans for Tax Reform