Here are two enduring certainties about California.
1. The roads are crumbling.
2. Californians hate taxes.
These points are going to be butting heads at the ballot box this year, if the opponents of the recent gas- and vehicle-tax hikes have their way. They’ve been collecting signatures to place a measure on November’s ballot repealing the tax increases, which were enacted last year and have been going into effect in stages. They’ve already succeeded in placing on the June 5 primary ballot an effort to recall one Democratic state senator who voted for the tax increases.
“This is a campaign to repeal a tax on working families that is laying the groundwork for fraud,” says Carl DiMaio, the San Diego Republican who is spearheading the repeal effort. “If we want to fix our roads, we don’t need to raise taxes to do it.”
DiMaio’s words reflect a couple of bedrock assumptions of the anti-tax movement. One is that any money placed in politicians’ hands will be stolen. Its corollary is that there always would be plenty of money available to do what the people want, if it weren’t squandered on “waste, fraud and abuse.”
Whether those assumptions apply to the transportation taxes targeted by the repeal campaign is questionable, however. It’s easy to be cynical about government spending, but there’s a point at which cynicism runs out its string and turns purely into resistance to public works.
The transportation program enacted last year aimed to add $5.2 billion a year to the state’s transportation construction and repair budget. It included a 12 cent-per-gallon hike in the gasoline tax, which went into effect last Nov. 1; the conversion of a floating excise tax on gas to a permanent tax of another 17.3 cents per gallon, which will happen on July 1, 2019; similar increases in taxes on diesel fuel; and a surcharge on the vehicle tax of $25 to $175 a year, pegged to the value of the vehicle. There’s also a separate $100 annual fee for zero-emission vehicles starting in 2020 because they don’t incur fuel taxes (but do use the roads).
State transportation officials point out that the gas tax hadn’t been raised since 1994. In that period inflation had robbed the tax of more than one third of its value. Increased fuel efficiency, moreover, meant that drivers on average were buying less gas per mile traveled. Altogether, the transportation taxes had lost their ability to keep up with the demand for maintenance and repair.
“We simply did not have enough revenue coming in every year, compared to what needed to be spent just to maintain our existing transportation system, let alone make any updates or improvement,” says Jacqueline Campion, deputy director for legislation and finance of the California Transportation Commission. As a result, “the infrastructure is crumbling.” By some estimates, the cost of deferred roadway maintenance comes to $130 billion.
Of the $5.2 billion in annual revenue expected from the new taxes, $1.9 billion will be spent on state highways, mostly for maintenance and rehabilitation. Another $1.7 billion will go to cities and counties for local streets and roads. About $133 million will be spent on increasing road capacity at all levels and more than $750 million for transit projects.
Smaller sums will be given to the University of California and California State University for transportation research; a share of revenues from off-road vehicles and boats will go to parks and recreation.
It’s a fair bet that transportation officials are worried about the repeal campaign; that may be why billboards linking ongoing or planned roadwork to SB1 funding have been sprouting on freeway shoulders like weeds. They’ve also hastened to get shovels in the ground. According to a list provided to me by CalTrans, the state Department of Transportation, 14 resurfacing and other maintenance projects totaling $44 million in SB1 funds already have been completed statewide.
Critics of SB1 rely on generic suspicion of public officials’ motivations and hostility to taxes to carry the day.
“We’ve suffered through three decades of diversion of transportation dollars,” says Jon Coupal, president of the Howard Jarvis Taxpayers Assn. “Having been told repeatedly that transportation dollars would be spent for transportation and not seeing that coming about, obviously we’re very skeptical.” He asserts that even without the SB1 levies, California would still be in the top five of states in gas and vehicle taxes. “It’s not like we’d be starving the state for revenue.”
Coupal has a point about the diversion of transportation revenue for other purposes. Even SB1’s supporters acknowledge that the intent expressed in a bill can be overridden by subsequent legislatures or governors.
But some of the levies will be protected by a constitutional amendment enacted by Proposition 22 in 2010, which placed limits on the state’s ability to reallocate transportation funds. Proposition 69, which will appear on the June ballot, would place similar limits on the use of some of the new levies via a constitutional amendment.
In any case, arguing that we don’t need new revenue for transportation infrastructure because we’ve spent past revenue on other projects just invites the question of how to pay for those other projects. Complaints about “waste, fraud and abuse” are generally aimed at programs that one doesn’t happen to agree with or use personally. Childless taxpayers will grouse about paying for schools, yacht owners about public beaches.
The most popular whipping boy at the moment is the high-speed rail project, which is beleaguered by doubts about its cost, fare, ridership and speed projections, as expertly chronicled by my colleague Ralph Vartabedian. Both DiMaio and Coupal pointed to the project as a fiscal sinkhole that would yield plenty of funds for road repair if it were canceled.
But that’s misleading. The proper way to redirect high-speed rail funding, if that were done, is toward mass-transit programs within the high-speed corridor — not to road repair.
The biggest problem in the repeal campaign may be that it’s motivated to a large extent by partisan politics. The adamantine anti-tax stance is more or less owned by the Republican Party; it’s hardly a stretch to reason that Republican strategists hope that the tax repeal measure will bring their dwindling population of faithful voters to the polls.
DiMaio denies that it’s “a Republican initiative,” but of the more than $750,000 raised for the initiative campaign so far, $200,000 has come from the California Republican Party and $400,000 from campaign committees associated with House Minority Leader Kevin McCarthy (R-Bakersfield), Rep. Devin Nunes (R-Tulare), and GOP gubernatorial candidate John Cox.