Gas-tax repeal headed to the ballot — the battle is on!
Governor Brown says, ‘I will do everything in my pwer to defeat any repeal effort’
Setting the stage for a major statewide battle over how to pay for an estimated $67 billion backlog in highway, bridge and road repairs, a ballot measure to repeal California’s recently enacted gas tax and registration fee increases officially qualified Monday for the November ballot.
Already, Gov. Jerry Brown and a powerful coalition of chambers of commerce, law enforcement, unions, firefighters, local transportation agencies and cities and counties have vowed to fight it.
“I will do everything in my power to defeat any repeal effort,” Brown said in a statement shortly after the Secretary of State’s Office announced that the effort had qualified for the ballot. “You can count on that.”
John Cox, the Republican candidate for governor, didn’t waste any time either to voice his support for the repeal.
“This is a message to the millions of for-
gotten Californians ignored by the Sacramento political elite, help is on the way,” Cox said. “Let this also be a message to every special interest in Sacramento, we’re coming for you.”
The new taxes and fees have strong support in the Bay Area, according to a recent USC and Los Angeles Times poll, where a booming economy has driven up the price of housing, forcing workers to commute longer distances through maddening traffic, and where 72 percent of likely voters said they would keep the gas tax.
But that enthusiasm would not be enough to retain the gas tax, the poll found, because support is weak nearly everywhere else. Only 38 percent of Los Angeles-area voters, 29 percent of voters elsewhere in Southern California and 30 percent of Central Valley voters support it.
Without the new taxes and fees, California residents will be stuck right back where they started, with not enough money to fund needed highway maintenance, road repairs or public transit upgrades, said repeal opponent Carl Guardino, the CEO of the business-focused Silicon Valley Leadership Group and a member of the California Transportation Commission.
“Those stating we can fund those improvements without the funds generated from California’s first gas tax increase in 25 years are either mistaken or are flat-out misleading California voters,” he said via email. “If this misleading repeal is successful in November, more than half of those improvements grind to a halt, along with our region’s economy and quality of life.”
Already, more than 5,000 state and local transportation projects are underway using money generated from the new taxes and fees, according to the
California Transportation Commission. State transportation officials estimate roughly half of those projects would be delayed or indefinitely deferred if the repeal succeeds, including $3.1 billion for transit and highway projects in the Bay Area alone.
Approved by the Legislature and signed into law last year, SB 1, which went into effect in November, raised the tax on gasoline by 12 cents per gallon and increased the tax on diesel by 20 cents per gallon. It also raised registration fees this year by $25 to $175, depending on the value of the vehicle, and imposed a $100 registration fee for zero-emission vehicles, which will go into effect in 2020.
The taxes and fees are expected to generate roughly $54 billion over the next 10 years to chip away at the state’s deferred maintenance backlog and help pay for upgrades to public transit. The increases nearly double the amount cities and counties receive
annually to repair local streets and roads.
Opponents of the gas tax say the state has poorly managed the transportation money it already has. Too often over the past 20 years, they say, politicians raided transportation funding to balance the state’s budget, limiting the state’s ability to pay for highway and road maintenance, which only made the eventual repairs more expensive.
It’s hard to get a good accounting of how much money was diverted and how much has been repaid, said David Wolfe, the legislative director at the Howard Jarvis Taxpayers Association, which opposes the taxes and fees. A 2016 UCLA report cited at least three times in the mid1990s and 2000s when the state used money to balance the budget that was supposed to repair highways and roads or upgrade public transit.
Changes to the state constitution now prohibit such transfers in most cases.
Wolfe highlighted another redirection of transportation funding: Voters approved several general obligation bonds over the years to pay for large transportation projects with the expectation that the principal would be paid from the general fund. But a complicated funding measure called the “Gas Tax Swap” enabled legislators to use truck weight fees, which previously paid for highway and road maintenance, to pay off transportation-related debt instead. That amounts to about $7 billion since the swap went into effect.
“The roads will not get fixed because the politicians will continue to divert the funds as they always have in the past,” Carl DeMaio, who is leading the repeal effort, said in a statement Monday.
The Legislative Analyst’s Office estimates that, with the new taxes, the average driver will pay $750 per year in taxes and fees.
But proponents note that the last time the gas tax was raised was in 1994, when it increased from 9 cents to 18 cents, and they argue that it’s due for an increase.
It’s not hard to see how the backlog of deferred maintenance grew, said Martin Wachs, an urban planning professor emeritus at UCLA, when you consider seismic retrofit projects that lengthened the list of needed repairs statewide and several recessions that reduced the money the state anticipated collecting.
Even if money dedicated to transportation was diverted to the general fund, for the most part, it’s been repaid, he said.
“It’s also true that the occasions when that has been done have been really rare and have occurred in times of fiscal emergency,” Wachs said. “The main problem is the lack of buying power of the gas tax, unless it is raised, to keep up with inflation.”