California Government Is the Real ‘Junk Fee’ Offender

D emocrats are still trying to get political traction for President Joe Biden’s remarkable claim that among the gravest threats facing America — gasoline, police, Marjorie Taylor Greene — is the specter of hidden fees in commercial transactions.

But the president’s message doesn’t seem to have landed, perhaps because most of us get the irony: Democrats are silent on the myriad ways in which government acts like an exotic, multi-armed religious god, an omnipresent deity with at least one hand in every pocket.

The Democrats’ latest campaign kicked off February 7, when Biden took up precious headspace — ours, not his — with his State of the Union assertion that hidden fees are a national threat. Banks, resorts, concert ticketing, airlines, and other businesses add surcharges and hidden fees on innumerable transactions. Biden claimed the nickel-and-diming had become so exorbitant as to “matter to most folks in homes like the one I grew up in” because “they add up to hundreds of dollars a month” and “make it harder for you to pay the bills or afford that family trip.”

Rousing himself to something like outrage, the president concluded, “I know how unfair it feels when a company overcharges you and gets away with it. Not anymore.”

Biden’s solution is the Junk Fee Prevention Act now before Congress.

California’s political class responded with such alacrity to Biden’s flugelhorn call to revolution that it was almost as if it had, you know, coordinated with the administration. On February 14, California attorney general Rob Bonta joined with progressive state lawmakers to introduce Senate Bill 478 – “landmark legislation,” they cock-a-doodled, that will “prohibit in California the practice of hiding mandatory fees, also known as junk fees.”

But in California, the greatest practitioner of the junk-fee dark arts is government itself, and neither Biden’s nor Bonta’s bills will do anything about that problem.

California state and local government agencies hit consumers with scores of hidden fees every day. Electronics consumers pay $5 to $7 to fund the “education” of Californians on proper electronics disposal. All lumber purchases (defined in the law as “building products used in construction that contain at least 10 percent wood”) are subject to a 1 percent fee. Every tire Californians purchase comes with a $1.75 surcharge.

Proposition 65 is the California law responsible for the cancer-warning signs so ubiquitous that most Californians know it’s better just to ignore them. In bars and restaurants, on playground equipment, shoes, umbrellas, and golf-club covers, even around Disneyland, consumers are warned that a product — even a place itself — “is known to the state of California to cause cancer or reproductive harm.” What California regulators “know” is that even “one excess case of cancer in 100,000 individuals exposed to the chemical over a 70-year lifetime” requires a warning. And if a suspicious product or place does not include a Prop. 65 warning, the state deputizes private trial lawyers to litigate. Their targets are generally small businesses, which tend not to have the resources to fight costly legal battles, and therefore often settle. Because the penalties for failure to warn are so steep, businesses paid $35 million in Prop. 65 settlements in 2018, with more than three-quarters of this total going to attorney fees. Consumers ultimately pick up the tab for higher prices. Talk about “junk.”

The entire state is like this. Every Californian runs daily through a gauntlet of regulators more handsy than the pickpockets of Florence’s Santa Maria Novella train station.

Take government unions. Until 2018, California’s government employees were forced to pay union dues and fees in exchange for their jobs. On June 27 of that year, the Supreme Court in Janus v. AFSCME famously declared that requirement was illegal. The Court’s simple and constitutionally sound judgment might have saved California’s millions of government employees a total of $1 billion annually. But it ran headlong into a number of new state laws designed to maintain the flow of union dues into political campaigns. So, on the very day of the Supreme Court decision in Janus, then-governor Jerry Brown signed into law a bill making it illegal for any government official in California — from City Hall to Sacramento — to say anything that “might deter or discourage membership” in a government union.

A Californian’s cellphone bill is, moreover, a document of imperial Ottoman complexity. You’re not just paying for phone service. You’re also paying fees to support the California Advanced Service Fund, the California Emergency Telephone Users Surcharge, the California High-Cost Fund Surcharge, the California Public Utilities Commission. There’s a new 911 surcharge, and fees to support disabled and low-income users. My favorite: a fee to cover the government’s failed attempts to collect fees from people who don’t pay them. These fees add as much as 25 percent to the cost of a cellphone bill.

California’s highest-in-the-nation gasoline prices are a product of junk fees — and not just state and federal taxes that add $1.21 to the price per gallon. There’s also hidden cost-boosting state regulation. Over decades, California has crafted a boutique gasoline market in which drivers can choose only from unique, state-curated fuel blends — aimed, of course, at reducing harmful emissions. Such regulatory interventions have blocked from California’s gasoline marketplace anyone who can’t compete in this rarefied bazaar; they have destroyed business competition among refiners and retail distributors; and they have concentrated market share in fewer hands.

While the rest of the nation’s consumers pay less for their fuel in a competitive, national market — one with more producers and distributors — Californians wrestle with fewer and fewer of each. But California is like the obsessive-compulsive drink order from your least-favorite Starbucks customer, who demands more but complains about the price. So, shocked into action by angry consumers, Governor Newsom has settled on a commission that will fine oil companies and others for “price-gouging.” Consumers will pay for that, too.

In California, government fees associated with misdemeanors are often more punishing than the fines themselves. In Amador County, in the Sierra Nevada just east of Sacramento, the superior court notes that its practice is to hit the guilty with a “penalty assessment” — $26 “for every $10 of the base fine amount or portion thereof as set forth by the California State Legislature.” The court helpfully directs unbelievers to Penal Code 1464 and Government Codes 76000, 70372, 76104.6, 76104.7 and 76000.5. Along with a range of other surcharges, the Amador court shows you how, through the magic of government fees, your $25 jaywalking ticket becomes a $193 fine.

None of this is accidental. It’s not rare. It’s what government does.

These government junk fees are more pernicious than the president’s catalogue of First World fees — truly annoying fees at resorts, on airlines, and for Taylor Swift concert tickets. I can opt out of resorts, airlines, and pop concerts. But no one can avoid government junk fees. Everybody relies on fuel. Everyone uses a cellphone. Everyone can be shaken down for hundreds of dollars in junk fees — merely because you were caught (as I once was) doing 72 in a 65 on a wide-open stretch of the 5 as it rolls through silent forests toward the Oregon border.

The political establishment’s eagerness to beat up businesses while remaining silent on the far greater threat of government junk fees is remindful of a timeless joke: If politicians didn’t have double standards, they’d have no standards at all.