California’s falling gas tax revenue leads to massive cut in transit project funding
Faced with plummeting gasoline tax revenue, state transportation officials have announced plans to cut funding for road and transit projects by $754 million over the next five years, the greatest reduction in two decades.
The 38% decrease was approved by the California Transportation Commission on Thursday, the same day that Gov. Jerry Brown used his State of the State address to call on the Legislature to end the gridlock in negotiations over new taxes and fees for transportation projects.
“What this means is that almost every county in California that relies on this source of funding for projects that improve traffic and air quality will have to cut or delay projects indefinitely,” said Lucy Dunn, chairwoman of the commission.
She warned of “even more draconian cuts next year” if funding sources under consideration by lawmakers do not improve transportation finances.
The rate of the tax is tied to gas prices, which have been dropping. It was set at 18 cents a gallon just a few years ago, but fell to 12 cents a gallon last year and is expected to decline to 10 cents in July.
Each penny reduction in the gas tax decreases funding for state transportation projects by some $140 million a year.
Because of the funding cut, the state for the first time in a decade was asking counties to terminate some of the 200-plus projects previously offered funding, according to Susan Bransen, chief deputy director for the commission. Past cuts have resulted only in projects being delayed, she said.
Local agencies, including the Los Angeles County Metropolitan Transportation Authority, have until next month to come up with a list of projects to be deleted or delayed, Bransen said.
The state panel’s action — combined with Brown’s challenge — ratchets up the pressure on legislators who have been unable to agree on new transportation funding during a special session called by the governor last year.
“We have no choice but to maintain our transportation infrastructure,” Brown told lawmakers Thursday. “Yet, doing so without an expanded and permanent revenue source is impossible. That means at some point, sooner rather than later, we have to bite the bullet and enact new fees and taxes for this purpose.’'
One idea put forward by Assemblyman Jim Frazier (D-Oakley) would increase money for transportation projects by $8 billion annually through changes that include a 22.5-cents-a-gallon excise tax increase.
Frazier, chairman of the Assembly Transportation Committee, said the commission’s action was “another sign that funding is not only inadequate, but continues to be taken away by past deals.”
“This is our call to take the issue seriously and commit to protecting our infrastructure.”
Because many counties match state funds with revenue raised by local transit taxes and federal dollars, the cuts could have a large negative effect on the state’s economy, according to Jim Earp, a commissioner and member of the California Alliance for Jobs, a business-labor group representing the construction industry.
“We’re talking about projects in the billions of dollars, which is tens of thousands of construction jobs, let alone how it filters down into other aspects of the economy,” Earp said.
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