Falling gas revenue sharpens CA infrastructure fight

Road constructionAs revenues from the statewide gasoline tax tanked amid low prices, lawmakers in Sacramento faced a fiercer debate over how to fund California’s much-needed infrastructure improvements.

In the meanwhile, Gov. Jerry Brown’s administration went ahead with huge cuts to the infrastructure budget. According to the Los Angeles Times, “state transportation officials have announced plans to cut funding for road and transit projects by $754 million over the next five years, the greatest reduction in two decades.” The drop, cutting more than a third into last year’s sum, cleared the California Transportation Commission as Brown “used his State of the State address to call on the Legislature to end the gridlock in negotiations over new taxes and fees for transportation projects,” the Times noted.

While gas taxes raked in 18 cents on the gallon in the recent past, the Times added, last year receipts plunged to 12 cents a gallon — with analysts predicting another drop this summer to just 10 cents:

“Each penny reduction in the gas tax decreases funding for state transportation projects by some $140 million a year. Because of the funding cut, the state for the first time in a decade was asking counties to terminate some of the 200-plus projects previously offered funding, according to Susan Bransen, chief deputy director for the commission.”

Skittish Dems

Election-year politics, however, have cast serious doubt on prospects for a new deal that would somehow replace the disappearing outlays. “In fact,” the Sacramento Bee noted, relative to last year, “the timing appears less favorable. Enacting a tax increase would require the support of at least some legislative Republicans, always difficult but likely more so amid the rancor of an election year. Nor is it clear that every Democrat in the Legislature will vote for a tax.” Since breaking the Democrats’ supermajority in Sacramento, Republicans have gained the ability to block legislative tax increases. “Although Democrats control both houses of the Legislature, Republican votes are needed to enact any tax measures, giving them leverage on the issue. If all Democrats were supportive” of an infrastructure hike, “a deal would need two Republican votes in the Assembly and one in the Senate,” according to the Associated Press.

While some Democrats fear they’ll be thrown out in a populist election season if they make the wrong move on taxes, Republicans have reiterated their concern that largesse elsewhere in the budget has put Californians in an untenable situation when it comes to government’s basic roads-and-repairs function. State Sen. Bob Huff, R-San Dimas, said Brown “did nothing except create an extraordinary session where he says you’ve got to raise taxes” last year, as the AP reported. “Here we are again with another $10-plus billion of revenue and once again, it’s ‘We need to bite the bullet and raise taxes to cover this,'” Huff said.

Shifting realities

Yet infrastructure policy analysts have raised the concern that Republicans have little choice but to find an alternative tax scheme and implement it fast. “For one, the gas tax isn’t a viable funding source any more,” Hoover Institution fellow Carson Bruno recently argued. “And secondly, a mileage tax, even with its downsides, presents a more efficient and effective alternative, especially with the rise of electric vehicles.”

Analysts noted that California has found itself in its current position because of failed efforts to raise cash for infrastructure spending in the past. “The state’s gas tax last went up in 1994, and more recent efforts to increase transportation funding have faltered,” the Bee recalled. “In 2014, transportation advocates proposed — then abandoned — a ballot initiative to more than double the vehicle license fee for road improvements. The last statewide transportation bond was approved during Gov. Arnold Schwarzenegger’s administration, in 2006.”

17 comments

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  1. Spurwing Plover
    Spurwing Plover 31 January, 2016, 06:39

    they can all be put on budgets and be barred from spending over that budget and no stupid taxes on soda pop or rifle ammo

    Reply this comment
  2. Ronald
    Ronald 31 January, 2016, 06:48

    The vehicle mileage tax (VMT) may be imminent as it allows the users of our highway systems to fund our transportation system. As fuel efficiencies continue to improve, there are fewer taxes to fund the federal Highway Transportation system. However, the VMT will hit the financially challenged harder than those that are well off.

    For those that can afford to live close to work, they will obviously pay the least VMT. For those that cannot afford homes close to work, they choose homes further away and thus will pay more VMT to get back and forth from work.

    An efficient transportation system is critical for California’s economy and quality of life. However, the current gas tax system is NOT working to fund the repairs and maintenance of our roads. The roads get the same wear and tear regardless of a vehicle being an SUV, hybrid, electric, or alternative fuel vehicle.

    California’s 100,000 electric vehicles are the most electric vehicles in any state, however, the other 97% of California’s 30 million vehicles that DO NOT run on electricity or other alternative fuels are consuming more than 40 million gallons of transportation fuels, gasoline and diesel, excluding jet fuel, EVERY DAY. Sounds like a lot of fuel, but it equates to just more than 1 gallon per day per vehicle.

    Even though there is a both projected growth in population from our current 38 million citizens, AND an increase in vehicle registrations from our current 30 million, the fuel demand is projected to decline slightly from the current 40 million gallons per DAY of gasoline and diesel, mostly as a result of continuous improvements in fuel efficiencies, and a slight impact by the 3% of vehicles that run on electricity or other alternative fuels.

    The fair taxation methodology to maintain the roads is to have the users of those roads pay for maintaining them, thus the vehicle mileage-based user tax system (VMT) seems to be an easy decision, even though it will hit the financially challenged harder.

    Reply this comment
    • Rex the Wonder Dog!
      Rex the Wonder Dog! 31 January, 2016, 08:20

      “An efficient transportation system is critical for California’s economy and quality of life. However, the current gas tax system is NOT working to fund the repairs and maintenance of our roads.”
      Nice public trough feeder “talking points”!!!

      “The roads get the same wear and tear regardless of a vehicle being an SUV, hybrid, electric, or alternative fuel vehicle.”
      Really, so a 250cc motorcycle has the exact same wear and tear on the highways as a 7 axle double trailer, or a 10 axle Hauling Double????

      Hmmm..

      Reply this comment
    • Bill - San Jose
      Bill - San Jose 31 January, 2016, 08:23

      I would support such a tax, although it would squeeze those who live in the central Valey and drive to the Bay Area for work everyday. But if the state is going to do that, the income tax has to take from every pocket. Poor and rich alike, at the same rate and not 13.3% for the highest rate.

      Everyone treated the same or this is another case of extortion by the state on how broke we are when they’re handing out pensions and retirement packages like candy (200K per former employee in some cases).

      Reply this comment
    • fred mangels
      fred mangels 31 January, 2016, 11:07

      The problem with choosing between the two two taxes is we may well .end up with both of them- the sales tax and mileage tax.

      Reply this comment
    • Donkey
      Donkey 31 January, 2016, 21:02

      Sorry Ronald, but the taxpayer pay plenty for the roads. The problem lies with the public trough feeders. Most cities are now paying half as much of their budgets into pensions and medical funds, leaving less and less every year for infrastructure. Don’t lecture the informed people of CWD about our poor government not having enough, we know better. After Obamacare I will never the government at any level! 🙂

      Reply this comment
      • Donkey
        Donkey 31 January, 2016, 21:04

        After Obamacare I will never trust the government at any level! 🙂

        Reply this comment
        • Ulysses Uhaul
          Ulysses Uhaul 1 February, 2016, 08:24

          Are you posting from Dennys near your gated abode in tacky Sunset Beach?

          Reply this comment
          • Dude
            Dude 1 February, 2016, 08:38

            So, if he does live in Sunset Beach then he isn’t allowed to complain about a would-be dictator who lied through his teeth to get this pos in place? Go back to China. It better suits you.

        • NTHEOC
          NTHEOC 1 February, 2016, 15:14

          Donkey used to live in Sunset Beach and thats what they like to call it still, but Sunset Beach was annexed a few years ago by Huntington Beach! Donkey is still bitter they cannot leech off the County services for free anymore. The City of HB has really been doing a good job of cleaning that area if Sunset up. No more unregulated weed shops and illegal business practices among other things and Sunset was introduced into the world of paying taxes, especially the property pension tax!!!! poor Donkey.

          Reply this comment
  3. Dude
    Dude 31 January, 2016, 09:58

    “if they make the wrong move on taxes, ….”
    Here’s a big clueless for you Moonbeam, the wrong move is to add new or increase existing taxes….period. California is already overtaxed. Instead, reduce spending. Tell the Mafioso SEIU to take a flying leap and send all the illegal aliens that are sucking up our resources back to Mexico. Problem solved…..

    Reply this comment
  4. steve
    steve 31 January, 2016, 12:20

    Have not we been paying an 80 cent a gallon tax to the State since Jan. 01, 2015?
    What we are now paying for gas is 80 cents more than any other State in the Union.
    Our money problem is Sacrament, not the gas or the cars or the roads.

    Reply this comment
  5. SmartMike
    SmartMike 31 January, 2016, 16:20

    All private salaries should be forwarded to the govt. Then it can be allocated fairly between do good organizations like SEIU and other govt services(all of them). What is left can be distributed at $2500 per month for anyone working 50 hours a week in a private company, and then the balance is secondary allowance money for govt workers, and undocumented supplement income.

    Reply this comment
  6. Queeg
    Queeg 1 February, 2016, 08:22

    Comrades Comrades

    Surly…..shocked…..we all know to run a decent “village” we collectively need public investment.

    Reply this comment
  7. Spurwing Plover
    Spurwing Plover 2 February, 2016, 12:50

    Stop wasting gas revenues on fancy art projects for their parks and start spending on improoving our highywars and intersates as well as the contry roads

    Reply this comment

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