Fuel tax hike in first gear
Political pressure on to repair roadways
SACRAMENTO — State lawmakers on Wednesday took the first steps toward raising taxes and fees on motorists and further restricting Californians’ tobacco use as the Legislature convened special sessions aimed at solving the state’s transportation and health care funding crises.
Members of a Senate committee tackling a huge backlog of roadway maintenance endorsed legislation that would
generate $4 billion annually for repairs by increasing the gas tax 12 cents a gallon and boosting vehicle registration fees up to $100. Another panel approved bills to hike the legal smoking age to 21, regulate e-cigarettes and allow counties to place local tobacco taxes on the ballot.
While significant, the party-line votes taken by the committees were merely an opening salvo in a battle between Democrats and Republicans that will play out over the next few weeks about the fairness of fixing California’s crumbling roads and improving health care for the poor by imposing new taxes.
“We don’t want to dump the cost of our horribly maintained infrastructure on the next generation — it will be too late to solve the problem if we delay,” said Sen. Jim Beall, D-Campbell, whose transportation tax bill passed the committee 9-2, with all the yes votes coming from Democrats. The two no votes came from Republicans; two other Republicans abstained.
Because tax and fee increases require the support of two-thirds of lawmakers in both houses of the Legislature, Democrats seeking to raise taxes will need help from their GOP colleagues, some of whom have indicated they’re open to hiking the gas tax for the first time in more than two decades — as long as the money is restricted to transportation improvements.
Speaking Wednesday at a news conference at the Port of Oakland, Gov. Jerry Brown urged bipartisan cooperation in repairing the state’s roads, bridges, ports and other infrastructure — yet studiously avoided saying how he wants to do it.
He wouldn’t say whether he supports Democratic moves to raise gas taxes or vehicle registration fees. And he wouldn’t say whether he supports Republican moves to cut jobs from Caltrans or to siphon money from the state’s high-speed rail and cap and-green house gas reduction programs.
“My approach to bringing people together is not to prematurely close the door,” Brown said. “I’m not going to put all my cards on the table this morning.
“This is a big challenge. How we’re going to get to the end of it isn’t exactly clear this morning.”
But he said he didn’t know how things would work out years ago when he delved into California’s water infrastructure bond or closing the state’s yawning budget deficit. Yet both ended up getting done with bipartisan support, he noted.
“I’m staying above the fray here,” he said. “What you’re getting here is the opening chapter in a longer novel.”
Current revenue from California’s 42.35-cent gas tax covers only a fraction of the state’s annual highway repair needs.
Last week, business organizations such as the California Chamber of Commerce and the Silicon Valley Leadership Group said any deal should seek to raise at least $6 billion annually by raising gas and diesel taxes and increasing vehicle registration and license fees.
Jim Wunderman, president and CEO of the Bay Area Council, said the world envies this region’s thriving economy, but “we can’t take it for granted” because the momentum is being threatened by inadequate infrastructure and housing. Taxes are unpopular, he agreed, but the major companies that are his organization’s members support whatever measures are needed to play catch-up after years of deferred maintenance.
Wunderman’s group on Wednesday proposed indefinitely extending the quarter-cent sales tax portion of Proposition 30, the 2012 measure that Brown championed to pay for the state’s oncecash-strapped schools, and dedicating all the revenue to transportation needs.
Reauthorizing the tax hike, now scheduled to expire in 2016, would provide about $1.5 billion a year for road repair.
Carl Guardino, CEO of the Silicon Valley Leadership Group, said his organization’s 390 CEOs agreed “how critical it is that we move forward with thoughtful transportation improvements.” It’s not a tax-and-spend issue, he said, but rather “an issue of invest and prosper.”
“We need a Butch and Sundance moment: ‘I’ll jump if you jump,’ ” Guardino said, evoking the image of Paul Newman’s and Robert Redford’s famed movie characters leaping from a cliff to escape.
Republicans, he said, must be willing to make the leap for new tax revenue, and Democrats must be willing to make the leap for administrative reforms.
“We can do it together if we jump together,” Guardino said.
Brown will also be instrumental in lining up Republican votes for a new tax on managed health care plans as well as a $2-per-pack cigarette tax, which has been floated but not yet formally introduced by Democrats.
In a health care financing committee hearing Wednesday afternoon, lawmakers approved a package of bills that aim to reduce the state’s health care costs by reducing Californians’ use of tobacco products.
The bill that regulates e-cigarettes like regular cigarettes, sponsored by Sen. Mark Leno, D-San Francisco, had stalled in an Assembly committee whose members had accepted more than $170,000 in campaign contributions from the nation’s two largest tobacco companies.
“We should be alarmed and infuriated that one of the fastest-growing segments of e-cigarette users is middle- and high-school students,” Leno said. “This is about protecting children and saving lives.”