California isn’t waiting on Trump — Gov. Brown wants $5.2 billion a year in new taxes and fees to fix roads
Acknowledging the transportation system has been neglected, Gov. Jerry Brown and legislative leaders on Wednesday announced a proposal to raise gas taxes and vehicle fees to generate more than $5 billion annually for repairing California’s crumbling system of streets, highways and bridges, as well as to increase mass transit.
It remains uncertain whether Brown will be able to muster the two-thirds vote in both houses of the Legislature needed to approve the new revenue sources, which include a 12-cent-per-gallon increase in current gas excise taxes on Nov. 1. Future increases would be made through a new tax calculating methodology and annual inflation adjustments. Those changes would begin in 2019 and would be fully implemented in 2020.
The package also includes a new, annual vehicle fee that would average about $51 based on the value of the car.
It was announced at a news conference on the Capitol steps attended by Brown, Assembly Speaker Anthony Rendon (D-Paramount) and Senate President Pro Tem Kevin de León (D-Los Angeles).
“This is a milestone. For a long time the state has not been doing what it has to do,” Brown said, standing with more than 100 lawmakers, labor leaders and construction workers wearing hard hats.
California has not approved an increase in the base excise tax on gas for 23 years, according to Brian Kelly, secretary of the California State Transportation Agency. As a result, the state faces a $130-billion backlog of repairs to state highways and bridges and local streets.
Brown said the plan is a pay-as-you-go proposal that would not burden future generations with debt.
“It improves the quality of our life. It’s good for the environment. It’s good for public transit. This is a good program, it’s the best we can figure out. And now there will be some critics who will say, ‘Oh, it costs money.’ Yes, it costs money, and if the roof on your house is leaking you better fix it because it gets worse all the time.”
De León said the proposal was long overdue.
“When it comes to funding transportation safety and road repairs, 14 legislatures have kicked the can down the crumbling and pothole-ridden road,” De León said. “California has become known for our brutal traffic jams and congestion.”
But Assembly and Senate Republicans released a joint statement opposing the plan. Assembly Republican leader Chad Mayes of Yucca Valley said the state should use existing funds to pay for the work.
“Californians deserve better,” he told reporters. “State government has mismanaged our transportation system for decades and the only response to that is that the Democrats, the ruling party here in California, want to raise taxes.”
Brown and legislative leaders have set a deadline of April 6, the day before the Legislature leaves on its spring break, to have the new package voted on by lawmakers.
De León and Rendon said they would get the votes needed for the bill, although the Senate leader said it might take weeks to get the bill to the governor’s desk.
Brown agreed that making the proposal is just the first step.
“We’ve got work to do,” he said. “Nothing is assured. Nothing is in the bag.”
Because Republicans have generally opposed the tax increases, the package may need the vote of every Democrat to get the two-thirds majority for passage. Three Democratic senators had been holding off their support before the new plan was released.
Sen. Richard Roth (D-Riverside) had indicated concerns that his district has not gotten its fair share of previous funding. To address that, much of the new funding is proposed to be allocated based on a formula aimed at making sure every part of the state gets its fair share. Roth and Sen. Steve Glazer (D-Concord) said through representatives that they want to review the details of the plan before deciding whether they can give it their support.
Kelly’s office planned Wednesday to give each legislator a customized estimate of how much the package would bring to his or her district.
Although the taxes and fees would be raised in perpetuity, the new revenue would be phased in, with $2.8 billion in new transportation revenues being collected through the early summer of 2018.
The average yearly revenue during the first 10 years would be $5.2 billion, and revenue would exceed $5.5 billion in 2022, according to H.D. Palmer, a spokesman for the state Department of Finance.
The proposal to raise taxes and fees drew opposition Wednesday from Republican lawmakers including state Sen. John Moorlach of Costa Mesa, who said it would especially hurt low-income people.
“These people need to get to work,” Moorlach said. “So we’re going to put the fixing of our roads on the backs of the poor. They are going to decide do they buy gas or do they buy food. I see it as an onerous and unfair proposal.”
Brown initially proposed a flat, $65 annual fee on all vehicles, but the new proposal lowers the burden on low-income residents, Kelly said. The Value Based Transportation Improvement Fee, which is charged annually in addition to the current vehicle registration fee, would be $25 for cars valued at less than $5,000, increasing gradually to $175 for cars worth $60,000 or more.
Half the cars in California are valued at less than $5,000, Kelly said. The fee “is more progressive now,” he said.
Brown had also initially proposed to use revenue from the state’s cap-and-trade program, in which businesses are charged to pollute, but auctions for credits have not generated the money expected so far, so that idea was scrapped.
“There are a lot of questions now with the instability of that market,” Kelly said. “Until that is locked down, people can’t necessarily rely on the revenue source.”
The money was found by adjusting other taxes and fees.
The sales tax on diesel would increase four percentage points from the current 5.75% to 9.75%. Also, the diesel excise tax would go up 20 cents, from 16 cents per gallon to 36 cents per gallon.
Reforms are also included in the package, including regular audits, creation of a new inspector general post and a ballot measure that would guarantee all the new money would go to transportation.
The plan also includes a $100 annual fee on electric cars that don’t pay gas taxes.
The tax and fee increases are unnecessary, said David Wolfe, legislative director for the Howard Jarvis Taxpayers Assn.
He noted that the state general fund has risen by $36 billion during the last six years and suggested some of that money should be spent on fixing the transportation system.
“The answer to solve this problem is not with new taxes that voters don’t want,” Wolfe said. “In order to restore trust with the voters, some effort should be spent on diverting other general fund monies to transportation that should have gone and historically have gone to transportation. The question is one of priorities.”
Some environmentalists objected to a provision inserted in the proposal that exempts the trucking industry from some air pollution regulations.
“It throws disadvantaged communities under the bus,” said Joshua Stark, a director for the transportation policy group TransForm. “We can’t support a deal that sacrifices public health for public transportation — California needs both.”
Of the $52 billion to be raised the first 10 years, $30 billion would be evenly divided between state and local jurisdictions and used to fix and upgrade roads and highways.
An additional $4 billion over the decade would go to repairing state highway bridges and culverts.
In all, the money would enable the repair of 17,000 lane-miles of pavement, 500 bridges and 55,000 culverts during the first 10 years, Kelly said.
An additional $2.5 billion would be set aside during the first 10 years for solutions to congested commuting corridors, which Kelly said probably would include the 405 Freeway in Los Angeles County and the 101 Freeway in the Bay Area. Those funds would be awarded as competitive grants.
The same mechanism would apply to $3 billion proposed for improvements to trade corridors such as the truck-battered roads serving the ports of Los Angeles and Long Beach.
Some lawmakers had complained that too much money was being proposed earlier for road repairs and not enough for improving mass transit.
The new package dedicates $7 billion during the first 10 years divided evenly between expansion of local public transit systems and operations of mass transit systems, with an additional $1 billion going to bicycle and pedestrian projects.
4:35 p.m.: This article was updated with additional details and comments about the proposal.
This article was originally published at 2:50 p.m.
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