More Taxes: $52.4 Billion Gas-Tax Plan Advances In California

The California Legislature this week approved a $52.4 billion, 10-year gas tax and new annual vehicle fee increase intended to fix the state's roads and make other transit improvements. The legislation, dubbed the "Road Repair and Accountability Act of 2017," passed the Assembly with a vote of 54 to 46 and the Senate with a vote of 25 to 11.

Gov. Jerry Brown, one of the bill's main champions, is expected to sign it into law soon. Once signed, the new fuel tax increases will take effect on Nov. 1, and the vehicle fees will take effect in January 2018, according to the text of Senate Bill 1.

"Roads are a fundamental of a civilization," Brown said at an event in Southern California this week, while touting the bill. "And every civilization has got to pay some money.... roads are the key to a nation's greatness. Our roads are falling apart. We can fix them. And we will fix them with SB-1."

The billions raised by the law will primarily come from a 12-cent-per-gallon hike in the gas tax, a 20 cent hike in the per gallon tax on diesel fuel and a new annual vehicle fee called the "Transportation Improvement Fee," or TIF, according to the bill's language.

The TIF charges include:

• $25 annually for every vehicle with a value of up to $4,999
• $50 for every vehicle worth between $5,000 and $24,999
• $100 for vehicles worth between $25,000 and $34,999
• $150 for vehicles worth $35,000 and $59,999
• $175 for vehicles worth $60,000 and more

The bill also requires a $706 million repayment of transportation loans to the state's general fund over the next three years, and it earmarks $26.6 billion for local projects and $25.8 billion for state projects.

According to the governor's office, the bill will cost "most drivers" less than $10 a month.

The money is intended to fix potholes, repave roadways, reduce congestion and improve public transportation, among other things. Brown's office said in a news release that the following funds will be split equally between state and local investments over a 10-year horizon:

• Fix Local Streets and Transportation Infrastructure (50 percent):
  • $15 billion in "Fix-It-First" local road repairs, including fixing potholes
  • $7.5 billion to improve local public transportation
  • $2 billion to support local "self-help" communities that are making their own investments in transportation improvements
  • $1 billion to improve infrastructure that promotes walking and bicycling
  • $825 million for the State Transportation Improvement Program local contribution
  • $250 million in local transportation planning grants.
• Fix State Highways and Transportation Infrastructure (50 percent):
  • $15 billion in "Fix-it-First" highway repairs, including smoother pavement
  • $4 billion in bridge and culvert repairs
  • $3 billion to improve trade corridors
  • $2.5 billion to reduce congestion on major commute corridors
  • $1.4 billion in other transportation investments, including $275 million for highway and intercity-transit improvements.

The bill is supported by organized labor groups, chambers of commerce, the state's associations of cities and counties as well as local and regional transportation agencies, including the Bay Area's Metropolitan Transportation Commission.

Many business groups, including the Bay Area Council, also support the bill.

"This historic vote will help reverse decades of decline in California's transportation system," said Bay Area Council President Jim Wunderman.

The bill is not without its detractors, however.

Democratic Sen. Steve Glazer, whose East Bay District includes Walnut Creek, Concord, Antioch, Pleasanton and Livermore, voted against it.

"Sentiment in my district ran two-to-one opposing these new gas taxes and car registration fees," Glazer said in a statement. "This bill... failed to ensure that any new transportation funding given to local transportation agencies be used only for the purposes intended and not diverted to other uses."

It also included "last-minute amendments" that "will unwisely limit our ability to control diesel pollution from trucks," Glazer said.

The amendments prevent the state from requiring truckers to retire or replace trucks before they're 13 years old and were opposed by some environmental groups.

The higher pump costs will put California at or near No. 1 in fuel excise taxes nationwide, according to figures published by the American Petroleum Institute. Washington state will run a closed second, figures showed.

California routinely has the highest pump prices in the continental U.S. due partly to stricter petrol formulations and cap-and-trade costs.

"When are we going to learn?" said Sen. Jeff Stone, a Republican from Palm Desert. "Senate Bill 1 hurts the working poor and middle class families -- the very people Democrats in the Legislature always say they are trying to protect. Asking taxpayers to pay hundreds of dollars a year in more taxes when we've not spent one dime more on transportation from the general fund in years makes no sense."

"If we need more money for transportation projects ... why do we continue to divert $1 billion every year in transportation dollars to bail out the general fund?" he said.

Assemblywoman Melissa Melendez, a Republican from Lake Elsinore, called the tax hikes "obscene."

"The recent U.S. Census: Supplemental Poverty Measure found California to have the highest poverty rate in the nation, and the Democrats' response is to raise the gas tax by 70 percent," she said. "Democrats ... don't see their constituents as people; they see them as an ATM."

During a news briefing in Riverside Tuesday, the governor called SB 1 a "helluva good deal," insisting there was no alternative but to raise taxes to pay for infrastructure improvements.

He dismissed several Republican lawmakers' calls for an end to the over-budget High Speed Rail Project and cutting 3,500 reportedly redundant positions in Caltrans to save money that could be used for road repairs.

Patch wants to know, what do YOU think of this plan? Let us know in the comments below!

– With reporting by Bay City News Service and City News Service / Image via Shutterstock