Allen, Gann Seek Tighter Limits on Use of Gas Tax

Orange County Assemblywoman Doris Allen teamed up with veteran tax crusader Paul Gann Monday to launch an effort for a state ballot measure that would forbid the state from using more than $500 million a year in gasoline sales tax revenue for anything other than road projects.

Gann and Allen (R-Cypress) told reporters that if voters pass the measure in the June, 1988, primary, the state’s entire share of gasoline sales tax revenue--almost $700 million last year--would have to be earmarked specifically for highway and road construction and repair. The state is not now obligated to spend any more than $110 million of the money on highway construction, Allen said.

Specifically, the proposed measure would wipe out the state’s discretion to use nearly 80% of the sales tax revenues from gasoline for any purpose it chooses. The rest of the gasoline sales tax money is passed on to cities and counties. The Allen-Gann proposal would not affect the 9-cents-per-gallon excise tax, which the state collects in addition to the sales tax and which is specifically earmarked for transportation.

Legislative Action

While the signature drive to qualify the proposed measure for the ballot proceeds, Allen said she will make a parallel effort to win backing of two-thirds of the Legislature to place the issue on the ballot. Allen said she sponsored similar legislation last year that died in committee.

Stan Oftelie, executive director of the Orange County Transportation Commission, offered a word of caution later Monday. He noted that the money diverted from gasoline sales tax revenues from road projects to the state is ultimately given back to local governments for mass transit. Oftelie said the Legislature would probably eliminate that source of funding for mass transit if the Allen-Gann measure becomes law.

“That’s always been the problem with this kind of proposal in the past,” Oftelie said. “Bay Area legislators have always said they would not allow this kind of thing to happen and still fund mass transit projects out of the state’s general fund.”

Oftelie said Orange County could expect to receive 8% to 10% of the gasoline sales-tax revenue now diverted to the state general fund, based on the county’s proportional share of state tax revenues. But he cautioned that he is not aware of a specific funding formula attached to the Allen-Gann measure and said local officials would need more time to study the issue before opposing or supporting it.

Orange County lawmakers have consistently supported previous legislative efforts aimed at restricting the use of sales tax revenue from gasoline purchases to street and highway projects, without success.

Assemblyman Richard Longshore (R-Santa Ana) raised the issue during his successful campaign last year for the Assembly seat formerly held by Garden Grove Democrat Richard Robinson.

Longshore argued that the Legislature was raiding the sales tax revenue from gasoline purchases to pay for welfare programs even though the money was intended for highways. But state officials replied that Longshore was incorrect and that the sales tax on gasoline was set up specifically to help fund, in part, items besides highways.

Gann’s support of Allen’s measure is significant because the tax fighter’s grass-roots network would stand a good chance of qualifying a ballot issue through a signature drive. With the exception of an unsuccessful attempt to qualify a pay-capping measure in 1976, Gann has been involved in five signature drives that led to statewide ballot initiative measures, four of which were passed by voters.

Proposition Rejected

The most recent Gann-sponsored attempt, Proposition 61, was rejected by a 2-to-1 ratio last November. That measure would have placed a ceiling on the salaries of state and local government officials.

Gann said at a Los Angeles news conference that the latest measure, in addition to earmarking gasoline-tax revenues, also would head off what he sees as attempts by state lawmakers to circumvent a government spending limit he authored in 1979. That law, passed overwhelmingly by voters as Proposition 4, establishes a formula based on population growth and inflation that limits the amount state and local government spending can increase each year.

“The Legislature has had seven years to prepare for implementation of my Proposition 4,” Gann said. “This year, the cap on spending becomes operative and we intend to see that the Legislature abides by the people’s mandate.”

To qualify the measure, Gann said he would need to collect more than 600,000 signatures of registered voters.

Times staff writer Jeffrey A. Perlman contributed to this story.