The voluble Carl DeMaio on his gas tax revolt

Why Californians are not freeloaders

DeMaio: "Brown said he’d never increase taxes without a public vote."
  • DeMaio: "Brown said he’d never increase taxes without a public vote."
  • Capitol Media Partners

There’s a showdown looming down at the gas pump, and Carl DeMaio will be there on Election Day to confront the man he views as the chief bandit, Governor Jerry Brown. As for the preliminary pot-shots, the Wild West rhetoric is already flowing like a Kern County gusher, circa 1910.

DeMaio talks via Bluetooth

DeMaio talks via Bluetooth

During the week leading up to the high-octane extravaganza, I asked DeMaio about Brown’s recent commentary on what some pundits are calling California’s biggest grass-roots ballot-fest — not counting the recent cannabis imprimatur — since the days of Howard Jarvis and Proposition 13. Revisiting the widely-circulated epithets referred to by the Reader’s Ken Harrison on May 7, DeMaio recited the “Brown-out,” to wit: “He called us ‘freeloaders,’ ‘political terrorists,’ and just last Friday…‘losers.’” I pressed DeMaio, “Is it just hyperbole? How do you think the governor gets to that point?” Sounding as if he’d heard the question before, DeMaio responded, “I don’t know; you’d have to ask the governor.”

DeMaio: “The bike people hate cars and want you to be forced to sit in traffic until you finally cry ‘uncle.’”

DeMaio: “The bike people hate cars and want you to be forced to sit in traffic until you finally cry ‘uncle.’”

Capitol Media Partners

To DeMaio, the gas tax epitomizes ‘politics as usual’ in California, and presumably, the nation as a whole. “The reality is that he broke his promise, because he said he’d never increase taxes without a public vote. But with the gas tax and car tax, that’s exactly what he did. I think our measure, at the very basic level, is forcing the governor to keep his word. It’s unfortunate that we had to collect signatures to do this, but that’s just the reality of politicians who lie. That’s why I ask people, ‘How can you trust this governor when he promises not to steal the money that he’s always stolen?’ Politicians have always stolen the gas tax money; it’s never been going to the roads, and there isn’t a single sentence in the gas tax [provision] that requires that all the money goes to the roads. All we have are these ‘pinkie swear’ promises by politicians who, by their very nature, have lied to us by passing a tax without a public vote.”

Governor Brown: "With the language of Proposition 69, the governor has the ability to declare a ‘economic emergency’ and take all the gas tax money."

Governor Brown: "With the language of Proposition 69, the governor has the ability to declare a ‘economic emergency’ and take all the gas tax money."

DeMaio, nothing if not voluble, continued with passion. “Not only are the gas tax and the car tax a really big blow to working families in terms of much higher costs of living, but they’re such a fraudulent taking of money under the ruse that it’s going to the roads when it’s not.”

If allowed to stand, day-to-day impacts on San Diegans and others will be considerable, according to DeMaio. “We’ve published a report on our website which very carefully documents that a typical family of four will pay $779.28 more in car and gas taxes.”

[Per the Los Angeles Times, November 1, 2017: “State excise tax on gasoline increases today by 12 cents per gallon, going from 29.7 cents per gallon to 41.7 cents per gallon. The state sales tax on gasoline will remain at 2.25%….State excise tax on diesel fuel increases by 20 cents, going from 16 cents per gallon to 36 cents per gallon. The sales tax rate on diesel will increase from 9% to 13%. The gas tax legislation also creates an annual vehicle fee. Starting January 1, drivers will have to pay fees ranging from $25 for cars valued at under $5000 to $175 for cars worth $60,000 or more. In lieu of gas taxes, electric car owners will pay a $100 annual fee starting in 2020. ]

Touching again on the incendiary tones emanating from Sacramento, I asked DeMaio, “Freeloaders? What motivates that kind of political language?”

DeMaio, using a Bluetooth as he drove home from an undisclosed location, replied, “I think [Brown] has contempt for the taxpayers. His view is that politicians should be able to take as much of our money as they want and that they know better how to spend our money than we do. It’s a problem, because it reflects arrogance, and it’s something that’s fundamentally wrong with the mindset in Sacramento.

“Let me also point out that Californians aren’t freeloaders — by virtue of the fact that we already paid the second-highest gas tax in the country before this rate went into effect. But because the money’s been stolen and diverted from roads, we have the worst roads. We’re not freeloaders; we’re victims of fraud. In years where they say we have a budget deficit they steal all the money and put it in the general fund. Even with the language of Proposition 69, the governor has the ability to declare a ‘economic emergency’ and take all the gas tax money, and he doesn’t even need the vote of the legislature to do that; talk about a complete blank check. The gas tax money goes to the bureaucracy, and they use any sort of specious justification to call it an ‘infrastructure’ expense. Of the money that does go to ‘infrastructure,’ most of that is for staffing costs for projects that aren’t actually built. Last year, an audit found 3500 CalTrans employees who did not work on a single project; that’s a half-billion dollars in salaries and benefits.”

So, as we swerve around potholes on Miramar Road or stew in a standstill at the 5/805 interchange, we may wonder: where do those gas taxes go? Are they no more than ephemeral fumes dissipating like early-June cloud burn-off? DeMaio says he’s followed the funds. “It’s diverted to bike lanes, transit, light rail, inner-city rail and high-speed-rail; and some of it is specifically earmarked for parks and recreation. That money has nothing to do with roads.

“A California state senator did a study two years ago showing that even back then, only 20 percent of the gas tax was going to anything related to roads under even the broadest definition. Finally, the little money that does make its way into a road project is very inefficiently spent due to the union-only contracting rule and no-bid contracts. The Reason Foundation also has a study out, saying that for every dollar we do spend per mile of road — it’s the equivalent of the $4.70 average spent by all the other 49 states. So we have a 470 percent cost waste factor in California. Until those things are reformed, we should not be raising taxes.”

An important part of the equation, states DeMaio, is the influence that bicycle enthusiasts have had on roadway congestion. “The bike people hate cars and want you to be forced to sit in traffic until you finally cry ‘uncle,’” says DeMaio. “Gas tax money has been used to actually eliminate lanes for cars.” Noting that the net effect of bike-centric funding has been a reduction rather than addition to auto capacity, he quips, “It’s a terrible way to force your will on someone else.”

He’s quick to add that urging adherence to stated fund-allocations for roads is not tantamount to expressing a preference for one mode of transportation over another. “I have nothing against bike lanes as long as the people who want to ride their bikes pay for them; but they’re being built with money that should be going to support vehicular traffic. It’s absurd to embrace bikes instead of an ‘all of the above’ transportation strategy.”

DeMaio has his fair share of detractors, perhaps more. When I pointed out the barbed comments of Don Wood [posted online after Ken Harrison’s May 7 story], a San Diegan who’s been described, alternately, as a “community activist” or an “officious intermeddler,” he laughed, “Oh well. When you are actually getting stuff done, the people who don’t like change, the people who like the broken system we’re in and who benefit from it — will try to smear you and attack you, because they actually can’t argue against the points you’re making. I’ve learned over the years to ignore and not sweat the small stuff. If you’re not taking flak, you’re not over the target.”

DeMaio says he hasn’t read the Reader’s prior story, much less clicked Don Wood’s Facebook link. But I did, and directed DeMaio’s attention to Wood’s list of “friends,” among them Greg Cox, Tom Gable, Dianne Jacob, Jeff Marston, Ron Roberts and other venerable San Diego insiders, including not a few GOP stalwarts. As to whether he’s pissed off the local movers, shakers and status-quo takers, DeMaio demurred by saying, “I think my prior comment [re ‘flak’] covered that. But I think the establishment doesn’t like the fact that we’re trying to give people a chance to undo [politicians’] decisions.”

With fervor, DeMaio compared the current dust-up to San Diego’s pension reform tussle a few years back. “The people who benefitted from the pension system — the government union bosses — didn’t like the idea that I was going to fix the financial crisis and end their little gravy train, so they made me ‘public enemy number one.’ They couldn’t argue with pension reform, so they had to try to shoot the messenger. At the end of the day, San Diego voters saw through the attacks and voted for pension reform.”

As for the specifics, I asked DeMaio to refresh my recollection. “It closed the pension system and moved people into 401K’s benchmarked against the private sector; capped pensions; required existing pensioners pay a 50-50 match; and eliminated pensions for politicians.”

But, I asked, “What about employees who contended that — having paid into the then-extant system — they rightfully expected a certain level of income and were now being deprived?”

DeMaio’s not sympathetic. “People who pay into Ponzi schemes also make that argument that they were duped. The real fault lies with the union bosses who lied to their members and the politicians who lied to the voters. A lot of victims were hurt in the pension scandal, and my job was to clean it up.

“Y’know, look — politics is a rough ’n’ tumble business; when they can’t argue with your ideas, they try to attack you personally, they lie about you. But I’m not gonna’ be deterred.”

DeMaio is reluctant to compare the response to his windmill-tilting to that generated by better-known statewide or national political “outsiders.” “I’m myself; I don’t need to benchmark myself against someone else.”

He contends that it’s a battle between entrenched interests and the common man. “People are sick and tired of the infighting and the smear jobs and the lies; they want a candid discussion of what our problems are and what possible solutions we can enact. Ultimately, our political system has been broken. They haven’t addressed these problems, and all the political establishment is willing to do is raise the cost of living for Californians. They don’t want reform. When you come along and point out, ‘Hey, stop passing the buck, stop raising the cost of living with higher taxes, mandates and fees — why not fix the broken system that you are propping up? — they don’t take to kindly to that. And so I say, ‘Whatever.’ My goal is to give voters the chance to impose reform from outside the political system; that’s where I’ve been most effective, and that’s what I’m continuing to do. It’s tough work, but I see a lot of people are willing to join in that effort; that’s why we got almost a million signatures on the gas tax repeal and got 150,000 signatures on the pension reform initiative.”

I asked DeMaio what issues he thinks should be at the top of San Diego’s list.

“Cost of living and homelessness: The fact that taxes and mandates continue to be imposed by government officials who think that we are made of money and who don’t understand that people are being crushed right now by the skyrocketing cost of living. It’s really hard to live in California, and that’s forcing people to move out of the state, people who’ve lived here for years. Taxes and mandates are one element, but another element is the refusal of politicians to actually deal with the affordable housing crisis.”

When it comes to the homeless, DeMaio takes on a different tone. “You have a homeless crisis that’s just obscene, because we don’t enforce our laws. If I parked my car on the 15 Freeway and got out and started barbecuing, I’d be arrested, but if a homeless person decides to live on a sidewalk in the middle of the right-of-way, well — that’s O.K. I think we’ve gotten to a point where people who abide by the law and follow the rules are fined for the littlest matter, but homeless people who break the law [are treated differently]; we need to treat people fairly.

“The homeless explosion is really a symptom not of the economy, not an issue of housing, but of lawlessness, because we’ve decided not to enforce our laws.”

As for California-wide issues, DeMaio opines, “There’s a philosophy of the lawlessness in this State. We are no longer enforcing our laws regarding basic crimes. I worry about the ‘catch ’n release’ that Prop 47 created, where all these crimes were reclassified from felonies to misdemeanors, and we no longer no hold people accountable. We have lost sight of victim justice and we’re now more concerned about criminal justice in California.”

DeMaio also believes that crime has contributed to population outflow. “If you don’t have safe streets and you can’t afford to live in a state, people very quickly move.”

As strongly as DeMaio feels about certain issues, he stakes out an intrinsically neutral position on others. As he arrived home and switched off his Bluetooth, I asked him to express his views on a handful of topics quick to push buttons across the Pyrite State:

The private-prison industry?

“I’m pretty agnostic about it. You can have government doing it, you can have private industry doing it. As long as you actually have competition. If the government workers win, fine; if the contractors win, fine. What I want is fair and open competition.”

Legal recreational cannabis?

“I have no problem with it; I’m a libertarian. But I would like to see, however, the federal government finally change its system so you can have full financial disclosure. Right now, with marijuana, there’s no banking system; it’s all cash. These companies can’t get financing. You can’t come out of the dark unless you have a banking system. And frankly, if the federal government wants to make a profit through tax revenues, they need to embrace the idea of finally coming up with some sort of clear regulatory regime. I think it’s an issue that both Democrats and Republicans should work on. I’d also like to see more research on cannabis side effects as well as tests to see if someone is intoxicated, high. We have tests for alcohol, but we don’t have very good tests for marijuana, and I think that even the industry would be willing to see that issue addressed.

Border security?

“You can’t be a nation unless you have a secure border. And there are all sorts of other issues other than illegal immigration going on, in terms of sex trafficking and drug trafficking. Securing the border needs to be the foundational discussion. Sanctuary states? Give me a break. What you’re doing is prioritizing protecting criminals over protecting community members [including] ‘dreamers’ and legal immigrants. It’s just an appalling example of extremism by Democrats who say, ‘We’re OK with releasing criminals.’ And these aren’t small crimes that they’ve committed: These are criminals who’ve been serial inebriates; domestic violence perpetrators; gang-bangers; sex-traffickers; drug dealers, and burglars. These are people who have committed gun crimes, assault. Those are the folks who will then come out and re-offend, and if you talk to Latinos, they also oppose sanctuary cities — because they don’t want these criminals in their neighborhoods.”

Finally, I asked DeMaio: “Ultimately, why have certain politicians promoted ‘sanctuaries’ for illegal aliens?

“Because they want to play the racial card, they want to divide us. Here’s the deal. You know what? One side raises your cost of living, the other side — I’m not saying that Republicans are good in the state of California — they’re not; they’re sitting in the corner doing nothing, they’re not fighting the fight. But the Democrats are out there raising our cost of living, taking our freedoms away from us, regulating our job base, and all they have to say to stay in office is, ‘Yeah, but the other guy is a racist.’ Really? Is that gonna’ pay your mortgage? Is that gonna’ pay your rent? Is that gonna’ make sure your kid is safe at night? I think people are waking up to that; it’s just a really hollow argument.”

Continuing, DeMaio vocalizes a dialogue, a libretto of sorts that might have accompanied the tragic opera of Kate Steinle’s murder by an illegal alien in San Francisco on July 1, 2015.

“And is this what you’re going to tell someone whose child is killed by a criminal who was shielded by the sanctuary state law? ‘Oh — but the other side is racist?’” ‘Yeah, but my child is dead! I’ve lost my home because I can’t afford to live here anymore.’ “What are you gonna’ tell that parent — that the other side is homophobic, racist, sexist? Oh — give me a break!”

Speculation abounds that DeMaio is contemplating a 2020 mayoral run, but he says, “I don’t know where that came from. My focus right now is on the gas tax.”

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Comments

The bias of the progressive READER reporter shines through with this question he poses to DeMaio: But, I asked, “What about employees who contended that — having paid into the then-extant system — they rightfully expected a certain level of income and were now being deprived?”

The city employees who started with the city when defined benefit (opulent guaranteed) pensions were legal did NOT lose their pensions, or their pension formulas. They were grandfathered, though they now have to pay a more reasonable percentage of the cost of their pensions. Because of competition for cops, the San Diego police still get those "90% at 30 years" pensions -- about double the percentage of income that a 30 year military person would get.

Except for police, the NEW employees don't get these pensions. Instead they get an EXTREMELY generous full matching 401k plan -- far better than any 401k plan found in the private sector. They knew of the retirement plan offered when they signed on (or shortly thereafter). It's a two tier system -- very common when pension plans are reformed.

For instance, in about 2006 the state of Alaska changed their retirement plan so that all NEW state employees get 401k plans rather than guaranteed pensions. The federal government long ago REDUCED their guaranteed pensions for NEW employees – providing a low pension plan combined with a matching 401k plan. In each case, these governments have two-tiered plans. This tier switch for NEW hires is also common among those PRIVATE companies that phased out guaranteed pensions.

Yet the reporter repeats the standard labor union canard that people are LOSING some of their promised pensions. It's not true. But this article (and its tone) IS a fine example of both the journalistic liberal bias and economic illiteracy of modern reporters.

Hey Moss, thanks for the mention. I always knew this story needed more space than I could give. Carl D is a force to be reckoned with now.

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