GOP Plan to Boost Road Funds Unveiled : Assembly Package Would Ask the Voters to Defer a Tax Refund

Assembly Republicans on Wednesday unveiled a proposal that they said would boost highway funding by $1.7 billion a year without raising taxes.

The GOP transportation package would send revenue from the existing sales taxes on gasoline, diesel fuel and vehicle purchases to a special account once the state’s revenues exceed the constitutional spending limit, which is expected to occur within the next year.

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

The Assembly Republicans’ proposal, unveiled at a Capitol news conference by Assemblyman Gil Ferguson (R-Newport Beach), 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.

Bond Package

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 also 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 by 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 raise the amount spent on transportation by about $600 million a year, Allen said.

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 has no position on the Assembly Republicans’ plan but has 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,” is the only equitable method of coming up with money to meet the state’s transportation needs. He said the plan is 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.”

Pushing Limit

The provisions in the caucus plan would be triggered once state revenues reach the constitutional spending limit 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 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 per cent of that money would be spent on state highways, and the rest would be used to match local government expenditures on roads and highways, according to the plan.