Gas Tax Measure Drives the Ballot

When Californians go to the polls in November to consider the largest public works projects in 40 years, their first decision won’t be whether to borrow $20 billion for transportation or $2.8 billion for affordable housing.

The first proposition they’ll see is a measure that would limit lawmakers’ ability to use gasoline taxes -- meant for transportation projects -- to bail the state out in tight times.

The proposition’s enviable placement atop the ballot is due to an alliance of construction companies, engineers and unionized contractors -- a group with strong pull in the Capitol. These interests played a critical role in cementing the biggest legislative deal of the year, a $116-billion public works package that lawmakers portrayed in a statewide tour Monday as a triumph of bipartisan deal-making by elected officials.

After foundering in March, that deal came together early Friday -- just in time to halt an initiative the transportation lobby was threatening to place on the November ballot. The initiative was replaced with a compromise struck by the Legislature.

“It is clear that it got done Friday morning because of our measure, and I think our measure did a public service because of that reason,” said Jim Earp, executive director of the California Alliance for Jobs, which represents 1,700 heavy-construction companies and 50,000 union construction workers in the northern part of the state.

Voters passed a law in 2002 to protect the sales tax collected on gasoline, about $1.4 billion annually. But lawmakers have used a loophole to siphon $2.5 billion from those funds in recent years to pay for school operations, healthcare and other expenses.

The coalition initiative would have prohibited lawmakers from ever doing so again and would have required them to pay back to the transportation fund what they took out.

Legislative leaders had been trying to ward off the coalition’s measure with their own less restrictive one, which would allow them to borrow gas tax money in tough fiscal times as long as they paid it back within three years. They would also agree to repay the transportation money they borrowed earlier this decade.

But the powerful California Teachers Assn. and other school lobbies -- major campaign donors to the Democrats who dominate the Legislature -- balked at limiting a potential source of money that could be directed to education.

The only way lawmakers saw to get their compromise through the Legislature was as part of the public works package they had been negotiating for months. It was big enough to include bits for every interest group, thus ensuring that none would stand in the way of the others. Along with the money for transportation and housing, the package includes $10.4 billion for school construction and $4.1 billion for flood control.

“I saw it as an opportunity to bring all the parties together and get this done,” said Assembly Speaker Fabian Nunez (D-Los Angeles). “The initiative made this a good time to do that.”

Senate President Pro Tem Don Perata (D-Oakland) said the initiative issue ran “like a little dog alongside the car.”

While lawmakers were furiously trying to make an infrastructure deal, private, parallel negotiations were going on between Earp and Joe Nunez, the political director of the teachers union. Just hours before the Legislature voted, the union dropped its opposition to the lawmakers’ gas-tax compromise.

“We still do believe that schools should have the same protections as transportation and local government should have,” said Sandra Jackson, a teachers union spokeswoman. “But we thought it was more important to let this go through.”

The transportation lobby won other major concessions -- the top spot on the ballot for the gas tax measure, and approval of its title: “Transportation Funding Protection, Legislative Constitutional Amendment.” Ballot measure titles are considered critical, because one with a negative connotation can turn off voters.

The contractors and their lobbyists were involved in crafting the infrastructure bond package from the beginning. Their support was crucial; the industry is expected to help pay for the campaign to get the ballot measures passed in the fall.

This year, the transportation lobby has given significant donations to Rebuild California, a campaign committee that Perata created to help him advertise the package to voters through television commercials. The state Council of Laborers and Albert D. Seeno Construction gave $50,000 each, while the California Trucking Assn., Desilva & Gates Construction of Dublin and the Northern California Carpenters Regional Council gave $25,000 each.

The contractors lobby spent about $2.3 million collecting signatures for its initiative. That included $10,000 paid to Perata’s pollster and political consultant, Sandra Polka, whom the lobby hired to oversee the petition process.

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Rau reported from Sacramento, Mathews from Los Angeles.