CALIFORNIA FUEL TAXES JUMP

The above two photos were taken one day apart at a nearby gas station.  The photo on the left depicts fuel prices yesterday, October 31st, and the one on the right is today’s, November 1st, fuel prices.  Why the steep increase? Because California’s legislature and governor approved SB1, The Road Repair & Accountability Act of 2017 increasing the state’s sales and excise taxes on fuel.

In a nutshell, the excise tax on gasoline rose from $0.18 to $0.30 while the excise tax on diesel spiked from $0.16 to $0.36 and the sales tax on diesel increased from 9% to 13%.

California’s infrastructure is woefully inadequate….failing freeways, bridges and surface streets.  We could on and on about how we got here by our lawmakers stealing from the transportation fund and putting the money into the general fund to pay for the latest pet project, but, we have been down that road before.

Oh, did we mention, this is not the last of the increases?  We will see more on January 1, 2018, July 1, 2019 and July 1, 2020.

ONLY IN CALIFORNIA

As part of his climate change agenda, California’s governor, Jerry Brown, has regulated cow farts.  Yep, cow farts.  Nope, we are not kidding.  Cow farts and manure cause methane, and methane, he contends, hastens global warming.  As a result, the state’s dairy farmers have been tasked with reducing their methane emissions by 40% by 2030.

 

The days of the “Happy California Cow” just might be numbered.

cows

CALIFORNIA…IT’S A DISFUNCTIONAL RELATIONSHIP

We love California, but we also appreciate we can be our own worst enemy.  Onerous regulations, California-only emission standards, over-zealous lawmakers, dilapidated roadways and labor strife continue to drive business away. Please take a moment to read economist Jock O’Connell’s report on the subject here.

Almond Bloom w Truck 004

 

While you’re reading, keep in mind there has been a slow attrition of cargo from the West Coast to the East and Gulf Coasts since the disastrous labor contract negotiations of 2002. Once handling over 90% of all import containers from Asia, the West Coast is now barely holding onto to 66% of the market share.

CAP & TRADE’S FUEL TAX

Fuel Island 009California’s Cap and Trade program, which is the buying of selling of pollution credits, will increase the price of gas and diesel in the state by $0.15/gallon starting next year. Those who created the plan see the increase as “unintended” while those of us who understand how business works saw it coming a mile away.

Read Richard Coyle’s, President Devine Intermodal, op’ed in the Sacramento Bee. Click here.

Oh, and did we mention, 25% of all Cap and Trade monies collected will go to build high-speed rail. Forget about our dilapidated roads and bridges…who needs goods movement anyway?

California’s Water Problems

DeathValley.ai[5]California always has to chart its own course.  While the rest of the country is inundated with snow, ice, rain and freezing temperatures, California is basking in dry, warm weather…but, it’s not a good thing.  We are in a serious drought.

Warm temperatures in the state are breaking records established decades ago, or longer.  San Francisco, which normally registers about 55 degrees this time of year, was 73 degrees last week, breaking a record previously established in 1878.

Snow pack in the mountains, 8” at Donner Summit, has not been this low since 1946.  At .20”, it is the third driest January on record since 1850, and the reservoirs in the state are at dangerously low levels.  Take a look at these striking before and after photos (click here).

We highlight these disturbing statics because California grows the majority of the nation’s produce.  Here is a short list of commodities and the percentage grown in California:

Almonds – 100%                   Artichokes – 99%.                 Carrots – 67%

Bell Peppers – 50%              Cauliflower – 89%                Broccoli – 94%

Leaf Lettuce – 90%               Spinach – 83%                      Avocado – 95%

Peaches – 84%                      Strawberries – 88%              Plums – 97%

California is Parched

DeathValley.ai[5]California just finished the driest year on record.  So dry, that Death Valley got more rain (2.17”) than the agricultural regions of Paso Robles (1.92”) and Hanford (1.99”).  After two straight years of dry weather, California’s reservoirs are below 40% of capacity with Folsom Lake in the Sacramento area being only 19% of capacity.  Unfortunately, 2014 is not shaping up well either.  There is a stubbornly strong atmospheric high-pressure system sitting over the eastern north Pacific Ocean, which is diverting the jet stream, and storm track, north into Canada.  Without wet weather during our rain and snow season of November – March, the draught will have a significant impact on the state’s agricultural growers.  It won’t just affect California…more than half of the nation’s fruits, vegetables and nuts are grown in California.

Read more about the draught and its affect on agriculture here.