The ‘myth’ about gas tax funds has some drivers upset

QYour recent rah-rah piece on the crushing backlog of repairs needed on our roads (and the new 12-cent a gallon tax) will start some of the fixes, lacked one component of honest reporting.

You neglected to remind your loyal readers that money from previous gas taxes was diverted (stolen) to fund other items, causing the current billions shortfall.

Did you conveniently overlook that part so as to not ruffle the feathers of the bureaucrats who feed you much of the info that you need for your column? — Mike Cook, Fremont

ANo, and Randy-the-MTC-Man calls this a myth.

It’s not all that surprising that Mr. Cook is reacting to a falsehood; the myth that transportation funds have been diverted. The facts are quite the opposite.

Over many years, transportation interests have been able to transfer general fund monies into transportation in two ways.

One was the issuance of state General Fund Obligation bonds specified for transportation purposes to be repaid from the state General Fund.

“Instead of, for example, an increase in the gas tax, which is a way better policy and is traditionally how transportation projects are funded with public transit sometimes being an exception,” Randy-the-MTC-Man said. “These General Fund bonds are now being repaid from weight fees as part of a larger deal, including the deal to pass SB 1 (the gas tax bill) to try to settle this whole mess.

“The second way, and more to the point of your reader’s confusion, has to do with the sales tax on gasoline.

“The California legislature, in 1990, given the large surpluses generated by the economy, eventually adopted a Republican idea, later championed by Gov. Gray Davis, to transfer a portion of the revenues generated by the sales tax of gas to transportation under certain state budget conditions. Of course, and in very short order, the dot.com bubble broke and the state budget was a wreck and this transfer was ended by the legislature.”

This is the origin moment of the myth that transportation dollars have been diverted to General Fund purposes when the opposite is without a doubt the actual truth.

To sum it up. Transportation interests over about a 20-year-period were able to transfer a significant revenue source, this being the revenue equivalent to the sales tax on gasoline, from the General Fund to Transportation.

Myth busted. Coming Monday, more on the gas tax.

Look for Gary Richards at Facebook.com/ mr.roadshow or contact him at mrroadshow@ bayareanewsgroup.com.