Business Backs Governor’s Gas Tax Effort

Gov. George Deukmejian, who is personally leading a campaign to win voter approval of a 9-cents-per-gallon gasoline tax increase, won commitments from business interests Wednesday to raise most of the $5 million needed to finance the effort.

After a closed-door meeting with his campaign steering committee, the governor’s office said Deukmejian had obtained pledges from state Chamber of Commerce leaders that manufacturing, retailing, agricultural and banking interests will contribute $3 million and the construction industry another $1 million to the endeavor.

The commitments came two hours after Deukmejian--whose Administration until now has been characterized by its adamant opposition to general tax increases--promised business leaders attending a California Taxpayers’ Assn. meeting that his support for the tax increases and proposed modifications in the state spending limit is “100%.”

“I am giving it my all-out support and will continue to do so throughout the campaign,” Deukmejian said.

To emphasize his point, his office announced a short time later that the governor has directed his chief of staff, Michael Frost, to devote 25% of his time to the campaign beginning in January. Assistant Press Secretary Tom Beermann said Frost would forgo one-quarter of his state salary during that time.

The proposal to increase the gasoline tax is part of a compromise plan devised by Deukmejian and legislative leaders in both parties to finance a 10-year, $18.5-billion transportation improvement program. The tax increase--along with a 50% hike in truck weight fees--cannot go into effect, however, unless voters approve modifications in the spending limit also adopted as part of the compromise.

Under the modifications, which will be voted on next June, the calculations to determine state spending limits will recognize economic growth so that government spending can grow in relation to per-capita personal income.

Deukmejian said part of the campaign strategy will be to focus on the changes in the spending limit to help offset what is certain to be news media attention to the gas tax increase.

“If the economy is growing (the ballot measure) will allow government to increase governmental spending on essential services but at the same time it doesn’t leave future governors or future legislatures a blank check,” he said.

With the passage last year of Propositions 98 and 99, Deukmejian said the state spending limit was “virtually eliminated.” Proposition 98, the school finance initiative, requires that about 40% of the state general fund budget be spent on public education. Proposition 99 significantly increased taxes on tobacco products and directed that the new revenue be devoted to programs aimed at reducing tobacco use.

So far the strongest potential opposition to the ballot measure and the tax increase has come from the California Teachers Assn., which has complained that the spending-limit modifications will erase some of the gains schools achieved by the passage of Proposition 98. The organization has threatened to finance a campaign to defeat the proposal if it is not altered to provide more revenues for schools.

Deukmejian said he hopes that the CTA leadership can be persuaded to change its mind, but if it remains adamant in its opposition he predicted that his campaign would still be successful.

“I’ve never been involved in a campaign where I have seen such a strong coalition of support. . . . I think that we’re going to win it regardless of whether CTA opposes it or not,” he said.

Earlier, State Supt. of Public Instruction Bill Honig acknowledged that education had been forced to give up some of its gains from Proposition 98 in order to achieve the compromise. But, he said, the changes in the spending limit will still permit schools to get enough revenue to meet their needs in the next decade and provide a slight cushion to finance new programs.

For the last decade, Honig said, the state has been living off the investments in roads, schools, colleges, the water system and other kinds of social infrastructures that were made in the 1960s.

“We’re not making those investments now and 10 years from now, 15 years from now, this state’s going to pay a huge price unless we do,” he said.