Nevada City’s Economy and Hidden Gas Taxes

Yes, I know that gas prices are coming down and some on the left are hoping they stay down to offset the AB-32 increase slated for 1 Jan 2015. Why are gas prices coming down. Simple, there is an excess supply. Why is there an excess supply? The refiners over estimated how much of the summer blend that California’s drivers would use this summer.

After a certain date this fall they cannot sell the summer blend, and must switch to the winter blend, thus they are shoving that summer blend surplus into the market place, lowering gas prices. Why did they over estimate the summer use?

The California economy has been just bumping along the bottom of the growth curve, and there were a lot families in the state that did not have the spare cash for a summer vacation or day trips to places like Nevada City.

This lack of tourist travel is begininning to show up in the declining Nevada City revenue stream, as shown in an excerpt from an article in the Mountain Messenger and reprinted at YubaNet.

And though they seem to predict a renewed vigor for downtown Nevada City, sales taxes on tourism and other day-to-day local business the city government needs for survival are dropping. Estimated at 26 percent of the city’s revenue, sales taxes are perhaps the most volatile and easily influenced of incomes. An outside tax consultant has told Nevada City its sales tax income will drop again, as it has in the past two fiscal years.

After the summer blend dump is over, you will see fuel back to $4 a gallon plus whatever the AB-32 does to prices. Estimate range from 16 cents to 79 cents a gallon. This increase is fuel prices is not going to help Nevada City reboot their economy using tourism as the means. It will have to be something else that is not dependent on fossil fuel transportation.

There is one other fuel price escalator that the press and some local economic planer have over looked. Last year the Governor signed SB54 which made all refinery workers essentially union labors. The bill requires refiners to pay prevailing wages to contract workers and restricts their ability to hire qualified employees to a limited pool of applicants. Government induced labor shortages drive up the price of labor, and those prices increases are reflected in the price of the product, in this case the fuel in your vehicle and the fuel in the trucks that bring the products to our stores. This just raises the price of food and energy across the board.

The urban elites have no idea, or concern, for the economic pain they are exerting on the rural economies with their socialist policies and policies based on unproven science.

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About Russ Steele

Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.
This entry was posted in AB-32, California, Climate Change, Economics, Local. Bookmark the permalink.

2 Responses to Nevada City’s Economy and Hidden Gas Taxes

  1. RL Crabb says:

    No one has “run” for city government in NC in four years. Due to a lack of candidates, they just appoint council members nowadays.

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  2. Stu says:

    Ah, I see you are infected with the same local government that can not perform the job they ran for and need the obligatory “An outside tax consultant has told Nevada City its sales tax income will drop again, as it has in the past two fiscal years.”

    Our local Board recently hired a “outside consultant” to advise on how to raise water rates when everyone (almost) is using less…

    There are times that I think that anyone who voluntarily runs for public office should be automatically disqualified

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