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Oct 17, 2007 - 04:00 PM

Two Faces On The Car Tax

by Judy Dugan
Just because Gov. Arnold Schwarzenegger has signed into law AB118, an oil-friendly bill disguised as an environmental bill, that doesn't mean the questions will end.

For instance, how does he explain why he opposes clean air projects if they're funded by an oil company fee, as with last year's Proposition 87, but approves of a car tax on motorists to fund industry projects?

Why is Arnold saying it will improve California's air quality, when the Legislature's own analysts say there's no such guarantee in the bill, and the new taxes/fees could even be handed to oil companies?

What will Arnold say if environmental groups who endorsed the original bill demand a new bill -- to clean up the rewrite that turned it into a slush fund?

How can he defend his actions with $4.3 million in contributions from oil and energy companies filling his various war chests, including $665,000 from Chevron alone?

Here's some of the record that's keeping the questions alive.

What Schwarzenegger said:

- The day after he won his recall election to become governor in 2003, saying his first act would be to repeal an increase in the "car tax":

"I campaigned that I will not raise taxes and I say this again: I will not raise taxes."

- In July 2006, as oil companies poured tens of millions of dollars toward defeating Proposition 87, the clean-air measure to fund renewable fuel development with a fee on oil extraction:

"The governor is opposed to new taxes. Personally, he opposes the initiative, but he strongly supports the goals of the initiative -- increased investment in renewable and alternative energy sources."
-- Katie Levinson, communications director for Schwarzenegger's re-election campaign.

- On Oct. 14, as he signed a controversial bill to increase fees on motorists to fund his administration's industry grants for "alternative and renewable fuels":

The governor denied through a representative that he was being inconsistent in approving increases in the smog abatement and vehicle registration fees after initially winning election on a vow to kill an increase in the vehicle license fee. 'AB 118 provides significant funding for air-quality improvements... by investing in alternative fuels and technologies,' said Gena Grebitus, a spokeswoman for Schwarzenegger, who confirmed that the bill was signed."

What Schwarzenegger didn't say about AB118:

- The funds taken from motorists' pockets ostensibly for "renewable energy development" will be awarded as noncompetitive sole-source grants through the California Energy Commission, which is overseen by Schwarzenegger appointees.

- According to a Senate committee staff analysis of the final and heavily rewritten version of the bill, the funds could well go to a company like Chevron to pay for legally required refinery upgrades. Grants could fund "alternative" petroleum projects as well as biofuels, and projects that only marginally involve clean fuels.

- The staff report, written by salaried experts, not politicians, strongly urged that the bill be held until revised to at least define the bill's goals and tighten grant rules.

- AB 118 was opposed for the same reasons by Sen. Alan Lowenthal, the state Senate's chief expert on environmental issues.

- Chevron alone has given at least $665,000 to Schwarzenegger and his committees.

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