A new analysis, Nickel and Dimed: Cell Phone Fees to Mattress Fees – How Californians’ Money is Really Being Spent, examines the high costs residents pay for government services, offers solutions for reform, and suggests eliminating such fees could help with economic recovery.
Michael Thom, Ph.D., Pacific Research Institute adjunct fellow in public finance and the study’s author, told the Northern California Record by email that the project was prompted by a curiosity about why Californians pay so many fees in addition to high income, sales, and business taxes – and where the revenue from those fees actually goes.
“Fees raise the cost to live in California, and they are often regressive, meaning that they take a bigger ‘bite’ out of low-income families' already-strained budgets,” Thom said.
While the study does not assess the degree to which fees affect outmigration, it's clear that California's existing taxes and fees aren’t a draw for people to move to the Golden State.
Population loss has a direct impact on the state’s economy.
“When a person or family leaves the state, they take their spending and taxes elsewhere,” Thom said. “Quite literally, every person that leaves California takes a piece of the state's economy with them. The more that happens, the worse things get for those who remain.”
Among the data that stands out among the study’s findings, Thom noted:
- Complicated and anti-consumer vehicle registration fees.
- Due to some of the nation's worst infrastructure – from surface roads to airports – California residents don’t receive what they pay for.
- Concerns persist about the efficacy of the half dozen programs funded by cell phone fees.
- Most of the state’s recycling fees don't actually pay for recycling – they fund programs that attempt to make it easier to recycle things like mattresses – which often present a high level of inconvenience for consumers.
“Most state fees could vanish overnight without any real consequences,” Thom said. “Consumers would save money immediately. And that's what they deserve.”