Deukmejian Stands Pat in Opposition to Gas Tax Hike

Despite a reduction in gasoline tax revenues that threatens rapid transit projects throughout California, Gov. George Deukmejian remains steadfast in his opposition to raising the gas tax.

Instead, the Republican governor favors allowing counties to hold elections to raise local sales tax rates. And he has suggested that the loss could be made up by diverting some of the $400 million in state funds earmarked for the beleaguered Metro Rail project in Los Angeles.

“The taxpayers now are paying about 25 cents a gallon for taxes, state and federal taxes, and we feel that is a very significant amount,” the governor told reporters here late Thursday night. “And now that there has been a reduction in the overall price and they are getting some relief in terms of their transportation costs, we’re certainly not going to propose a state increase.”

Tax Now 9 Cents

Motorists in California pay a flat rate tax of 9 cents a gallon for gasoline as well as a sales tax based on the purchase price. While revenues from the 9-cent tax are likely to increase slightly in the face of increased sales from the worldwide drop in oil prices, the sales tax revenues are expected to plummet.

Mass transit programs are likely to be the biggest losers, Deukmejian said, because they are the most dependent on the sales tax revenues.

A recent revision of the state’s proposed budget for the fiscal year that begins July 1 forecasts a loss in gasoline tax revenues of as much as $110 million.

Could Mean Cutbacks

That could mean cutbacks of $12.8 million for the Southern California Rapid Transit District, $2 million for other bus systems in Los Angeles County and $8 million for the extension of the San Diego Trolley. Safety improvements along the San Diego-Los Angeles Amtrak passenger line and new transit projects elsewhere in the state could also suffer cutbacks.

“It will probably mean there will have to be, in effect, some delays in some of these projects,” the governor said. “It doesn’t mean that we are in any way lessening our commitment.”

Deukmejian, who has never been a strong supporter of mass transit projects, said he does not expect to take money from non-transportation programs to make up for the loss.

“If you try to make it up, the question is where do you get it from,” he said. “You don’t take it out of education. You don’t take it out of health and welfare. The only thing I see you continue to look at is within the entire transportation budget.”

Deukmejian said he is willing to sign legislation allowing local jurisdictions to raise their general sales tax rate. Over the last several years, he has approved such elections in Orange, San Diego and Santa Clara counties.

“If the taxpayers in a local area want to vote to increase the sales tax on gasoline, then we have no objection to that,” he said.

Two years ago, a Deukmejian task force that included nine members of his cabinet recommended a 5-cent hike in the gasoline tax to help finance a variety of public works improvements. But Deukmejian quickly squelched the idea, saying that the cost of transportation was already high enough.