Valley Ag groups critical of diesel tax hike included in plan to fix CA roads

TULARE, Calif. (KFSN) -- The talk of California's new gas tax has largely revolved around what it will mean for everyday drivers and how much they will pay at the pump. But the Transportation Funding Bill, designed to fix California's deteriorating roads, also includes tax hikes on diesel.

Starting in November, the diesel excise tax will be raised by 20 cents per gallon and the diesel sales tax will increase by four-percent.

Various agriculture industry groups, such as California Citrus Mutual, fought the bill. They know their farmers rely on diesel, from equipment in the fields to the trucks that transport the product.

"And what this did is it placed us in a much more vulnerable position relative to our ability to compete with offshore product," said Citrus Mutual President Joel Nelsen.

Nelsen said the cost of growing citrus in California has been on the rise for years. That's meant fewer family farms and packing houses and a loss of jobs and product.

For those who have stayed in business, Nelsen said the regulatory costs are passed on to the consumer who will pay more for a California product than one from the southern hemisphere.

"There is money allocated for roads that we already pay through gas tax that was reallocated in a different direction. That was wrong-- and as a result, we've got to pay more now? That's not fair," said Nelsen.

"There's always the talk of is this really going to be used on roads, which are in desperate need of repair, or is it a possible way that the High-Speed Rail could be funded-- you know I've heard that from several people," said Marilyn Kinoshita, Tulare County Agricultural Commissioner.

Kinoshita said Valley growers are concerned about the ever-increasing cost of producing food for the state, and the country.

Nelsen said his organization will do what they can to fight future regulations-- and that means supporting proposed legislation that holds government agencies accountable for how they spend the money they receive.

These taxes, on gas and diesel, go into effect November first.