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California Gas Tax Increase Hits Partisan Impasse

SB 16, Sen. Jim Beall's transportation funding bill that would hike gas taxes by 10 cents, diesel taxes by 12, and increase other fees, is stuck in the Senate, lacking one vote to pass.
July 10, 2015, 11am PDT | Irvin Dawid
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Unlike the nine states which have passed gas tax increases this year, tax hikes for the most part are a strictly partisan matter in this very blue state. Republicans in the legislature oppose any new tax increases—not like their counterparts in AlaskaGeorgia, Idaho, Iowa, Kentucky, Nebraska, North Carolina, South Dakota, and Utah, where gas tax legislation has already passed this year. Republicans control the legislature in all the aforementioned states except Iowa and Kentucky where, legislatures split with Democrats. [Also see Transportation for America, "States raising transportation revenue."] 

"There is broad agreement on the problem," writes political columnist Dan Walters in the Sacramento Bee. "California’s highway system, once the envy of the world, has fallen into disrepair, with spending on maintenance only a third of what’s needed."

But there’s no agreement on how to raise an additional $6 billion a year for the state’s 10-year restoration plan, the equivalent of hiking gas taxes by 40 cents per gallon.

That 10-year plan refers to meeting the first of three infrastructure goals highlighted in the inauguration speech given in January by Gov. Jerry Brown.

SB 16 (or SB 1 during the special legislative session), written by Sen. Jim Beall (D-San Jose), with its numerous tax and fee hikes (specified here), would only raise $3.5 billion a year, according to Walters. The Republican counter proposal is largely based on diversions, i.e., it raises no additional revenue but diverts existing revenue streams into the highway users tax fund

  • Use Greenhouse Gas Reduction Fund from cap-and-trade. "(B)etter roads means better fuel efficiency, which leads to a clear reduction in greenhouse gas emissions,” according to the GOP fact sheet, writes Steven Greenhut for The San Diego Union Tribune. "This nets another $1 billion."
  • "(R)ecapture $1 billion in truck weight fees now servicing 2006-vintage transportation bonds," writes Walters.
  • "(T)ake another $1 billion from the state general fund.
  • (L)ay off more than 3,000 Caltrans employees identified by the Legislature’s budget analyst as redundant."

For the complete plan, see See Republican Assembly Caucus press release: "Fixing Our Roads #MakeGovWork."

"While Republicans oppose new taxes, Democrats, including Brown, are equally adamant about not tapping the general fund, so, superficially, it’s a stalemate," writes Walters. However, he adds that "compromise is not impossible. At least a few Republicans might support temporary user tax and fee increases, and Democrats might be willing to streamline project handling to get that support."

That last part might include considering public-private partnerships which Republicans want but unions oppose and relaxing California Environmental Quality Act (CEQA) requirements which environmentalists would strongly object to.

But it’s uncertain how far either party’s members could stray from orthodoxy to find the magic recipe that could generate perhaps $4 billion to $5 billion year in new revenues...

Walters ends his column by giving an implicit plug for the Road Usage Charge - the basis of the funding program that began July 1 in Oregon and will become a pilot program in California on January 1, 2017 according to the "Senate Bill 1077—California Road Charge Technical Advisory Committee and Pilot Program."

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Published on Monday, July 6, 2015 in The Sacramento Bee
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