CommentsLA WATCHDOG--We are being asked to repeal the regressive $5.2 billion gas tax that was approved in April 2017 by two thirds of the Legislature and the Governor, but only after much arm twisting and unsavory side deals to buy votes.
If Prop 6 is approved by the voters, we have the added benefit that any future increases in gas or car taxes will require the approval of the voters.
The Road Repair and Accountability Act was designed to raise $5.2 billion to fund the repair and maintenance of state highways and local roads and streets.
But this tax is a reward for bad behavior because the State, despite record revenues of $200 billion, has failed to allocate resources for our transportation infrastructure despite billions in existing highway and related taxes. Rather, it has devoted its resources to pet projects like the not so High-Speed Rail as well as to ever increasing pension contributions and raises for the campaign funding prison guards. The State has also failed to address the documented inefficiencies at bloated California Department of Transportation (“CalTrans”).
The 12 cents per gallon increase will raise the gas tax to 30 cents a gallon (a 67% bump), one of the highest rates in the country. This increase is expected to raise $2.5 billion and will also be adjusted for inflation.
This is addition to federal excise tax of 18 cents per gallon.
The gas tax also does not include the impact of the State’s cap-and-trade program that is expected to add 24 to 73 cents to the gas tax over the next 12 years.
The 20 cents per gallon increase in the diesel fuel tax will raise the tax to 36 cents a gallon (a 125% bump) and is expected to raise $1.1 billion, again subject to adjustments for inflation.
This does not include a federal excise tax of 24.4 cents.
The legislation also calls for higher vehicle taxes that total $1.7 billion, with the hit ranging from $25 for cars valued at less than $5,000 to $175 for cars valued at more than $60,000.
However, of the $5.2 billion in new taxes, over 50% ($2.8 billion) is being redirected by the State, including $1.8 billion to local governments (including the City of Los Angeles). Another $750 million is being diverted to transit programs while $270 million is going to other programs, including $100 million for bicycle and pedestrian improvement projects.
[For the upcoming year, the City is expecting to receive $67 million from these new taxes, a portion of which will no doubt be diverted to the General Fund to help fund a portion of the $83 million increase in pension contributions.]
The State is making a big deal about appointing an Inspector General to ensure that CalTrans spends the new tax proceeds “efficiently, economically, and in compliance with state and federal requirements.” But without any powers of enforcement, the politically appointed IG is nothing more than hot air bloviator as he/she delivers an annual report to the Governor and Legislature.
There is no doubt that the State’s highways and bridges need funding. But if the state devoted the 100% of the gas, vehicle, and other related taxes and fees to repairing and maintaining our highways and bridges, there would be adequate funding. Furthermore, the State has the flexibility to restore funding that has been diverted from CalTrans because of its budget surplus that exceeds $10 billion.
The State could also save almost $2 billion by ending the handouts to the cities and counties, a price that had to be paid to corral the votes necessary to pass the gas and vehicle tax.
Furthermore, the State could implement the recommendations of the Legislative Analyst Office to overhaul CalTrans by eliminating excess staff and bureaucracy, saving an estimated $500 million a year.
In addition, the State could ditch the not so High-Speed Rail project and devote the freed up revenue from the cap-and-trade program to the repair and maintenance of its highways and bridges.
The net is that the State has enough money to fund the repair and maintenance of its highway and bridges without resorting to higher taxes as we are already the highest taxed people in the country.
Unfortunately, the odds are against the Prop 6.
Attorney General Xavier Becerra developed a misleading official title for the Ballot measure, “Eliminates certain road repair and transportation funding. Requires certain fuel taxes and vehicle fees to be approved by the electorate.”
The opposition has also raised over $30 million to fight Prop 6 from the Governor, construction firms, trade unions, public sector unions, the Democratic Party, and all the special interests, vastly out raising the Prop 6’s underfunded, grass roots proponents. This is turning into a David versus Goliath contest as the opponents will bombard us with television ads for the next month.
By approving Prop 6 and repealing the regressive $5.2 billion gas tax, it will force Sacramento to develop a fiscally responsible plan that does not smack the lower- and middle-income drivers with a highly regressive tax.
Repeal the gas tax. Save $600 or more a year. Vote Yes on Proposition 6.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council. He is a Neighborhood Council Budget Advocate. He can be reached at: [email protected].)
-cw
