Ferguson Unveils Republicans’ $1.7-Billion Plan to Fund Roads

Assemblyman Gil Ferguson (R-Newport Beach) on Wednesday unveiled an Assembly Republican caucus proposal that he said could boost California’s highway construction funding $1.7 billion a year without raising taxes.

The package of legislation would funnel revenue from existing sales taxes on gasoline, diesel fuel and vehicle sales to a special account when the state’s overall tax revenue exceeds the constitutional spending limit on state government.

The Assembly Republicans’ proposal would require an election at which voters would be asked, in effect, whether they wanted the excess state funds returned to them in the form of a refund or used instead to build new roads and maintain older ones.

The proposal, unveiled by Ferguson at news conferences here and in Pasadena and Costa Mesa, is one of several that will be considered this year as the Legislature grapples with ways to improve a highway system that many experts agree is inadequate and deteriorating.

Deddeh’s Proposal

The Senate is already weighing a package by Sen. Wadie P. Deddeh (D-Chula Vista) that would enable the state to sell $1.8 billion in bonds and would allow local governments to ask voters to raise the sales tax by a penny on the dollar to fund transportation projects.

Another proposal--by Republican Assemblywoman Doris Allen of Cypress--would restrict the use of money raised through the sales tax on gasoline to the planning, construction and improvement of public streets and highways. That measure, endorsed by tax crusader Paul Gann, would increase the amount spent on transportation by about $600 million a year, Allen says.

Finally, Gov. George Deukmejian is expected to propose his own solution to the transportation problem soon. Deukmejian spokeswoman Donna Lipper said Wednesday that the governor had no position on the Assembly Republicans’ plan but had seen it and “may incorporate some of its ideas” into his own proposal.

Ferguson said the caucus proposal, which he dubbed the “Motorists’ Bill of Rights,” was the only equitable method of closing the shortfall in transportation spending. He said the plan was the product of two years of study by the GOP caucus.

“We think this is a fair way of doing it,” Ferguson said. “We think this is a necessary way of doing it.”

Deddeh’s plan, Ferguson said, is faulty because it calls for further indebtedness and increased taxes. He said Allen’s proposal could work in tandem with his own but would be insufficient by itself.

The provisions in the Assembly Republicans’ plan would be triggered once state revenues reach the constitutional spending limit enacted through a ballot measure authored by Gann and approved by the voters in 1979. The Legislature’s budget analyst has said that limit has already been reached, while Deukmejian Administration officials say state spending will probably hit the limit next year.

Unless the voters approve a constitutional amendment that says otherwise, any state revenues over the Gann limit must be returned to taxpayers through refunds or lowered tax rates.

The Assembly Republicans’ plan would ask voters to defer a tax refund due them under the Gann initiative and instead place the $600 million a year in sales tax now collected on gasoline and diesel fuel along with the $1.1 billion raised from taxes on vehicle sales into a special account that could be spent only on construction and maintenance of state and local roads.

Seventy-five percent of that money would be spent on state highways, and the rest would be used to match local government expenditures on roads and highways.

Although Ferguson said the plan has been endorsed by the caucus leadership and a majority of its members, Allen said Wednesday afternoon that she hadn’t seen the Ferguson plan.

Allen said she would review the proposal before deciding whether to support or oppose it, but she said it appeared that the caucus proposal would be vulnerable to economic changes that affect the state spending limit, which is tied to inflation and population growth. Allen said her plan, tied to the sale of gasoline, would provide a more stable source of funds for transportation.

“I don’t think (road funding) should be a guessing game,” Allen said.