In April 2017, the California State Legislature passed, and Governor Brown signed, Senate Bill 1 (SB 1), which increases the gas tax by $0.12 per gallon, increases the diesel fuel tax by $0.20 per gallon, increases the sales tax on diesel fuels by an additional 4 percentage points, indexes the taxes to inflation, creates an annual transportation improvement fee based on vehicle value, and creates an annual zero-emission vehicle fee, phased in over time.
The purpose of this measure was to keep up with the inflationary cost of improving California's transportation system over the last 24 years, and to make up for the lost of revenues due to increasing fuel efficiency of vehicles. The cost of these combined fees and taxes to the average California motorist is $8 per month. The Legislature agreed to focus this plan primarily on maintenance and safety repairs in recognition of the estimated $130 billion backlog of repair projects for California's crumbling highways, roads, bridges, and transit systems. In Monterey County alone, this backlog of unfunded maintenance and safety needs is estimated at $1 billion.
To date, Monterey County has secured the following funding from these new gas taxes and fees:
- $31 million for priority highway projects in the five-year State Transportation Improvement Program;
- $19 million for the Imjin Parkway Multimodal Corridor project;
- $21 million for local road repairs in fiscal year (FY) 2017-18;
- $1,510,000 in matching funds for Measure X projects in FY17-18 and FY18-19, including the Fort Ord Regional Trail and Greenway;
- $505,000 in matching funds for Monterey Salinas Transit (MST) Senior Citizens, Veterans and People with Disabilities transit projects in FY17-18 and FY18-19;
- $2.5 million to MST for bus services each year;
- $772,000 to MST to replace 14 mini buses; and,
- $10 million for the Salinas Rail Extension project.
Caltrans is also putting its share of the "fix it first" formula funds to work on highways across the state, including new repaving on Highways 68 and 101 in Monterey County. The next report on this agenda goes into detail on the Measure X funded projects that will leverage this gas tax funding. The adopted TAMC five-year integrated funding plan (see web attachment) counts on a matching rate of state and federal dollars at a 2-to-1 ratio, primarily counting on these state gas tax funds. Taken together, all of these projects will provide tangible, direct benefits to the traveling public in Monterey County with smoother roads, extended and improved transit service, and less congestion. It would be virtually impossible for Monterey County to construct large projects on that list without these new state transportation revenues.
The "California Voter Approval for Gas and Vehicle Taxes Initiative," the constitutional amendment measure to repeal SB 1 and require gas tax increases to be subject to voter approval, has qualified to appear on the November 6, 2018 ballot. The Secretary of State's title and summary of the measure, which will appear on the ballot, is as follows:
"Eliminates Recently Enacted Road Repair and Transportation Funding by Repealing Revenues Dedicated for those Purposes. Requires any Measure to Enact Certain Vehicle Fuel Taxes and Vehicle Fees be Submitted to and Approved by the Electorate. Initiative Constitutional Amendment.
"Repeals a 2017 transportation law’s tax and fee provisions that pay for repairs and improvements to local roads, state highways, and public transportation. Requires the Legislature to submit any measure enacting specified taxes or fees on gas or diesel fuel, or on the privilege to operate a vehicle on public highways, to the electorate for approval. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Reduced annual state transportation tax revenues of $2.9 billion in 2018-19, increasing to $4.9 billion annually by 2020-21. These revenues would primarily have supported state highway maintenance and rehabilitation, local streets and roads, and mass transit. In addition, potentially lower transportation tax revenues in the future from requiring voter approval of such tax increases, with the impact dependent on future actions by the Legislature and voters."
Additional information is online as a web attachment. The group backing the repeal effort points to a Republican transportation plan that relies on the General Fund for funding the transportation needs in the state, which would pit transportation against other, more popular, programs such as public safety, education and health care. Those supporting the measure are the California Republican Party and Congressional Republicans seeking election or re-election in November.
The "Fix Our Roads" coalition fighting the gas tax repeal effort includes the California State Association of Counties (CSAC), the League of California Cities, the California Transit Association (CTA), the California Association of Councils of Governments (CALCOG), the California Alliance for Jobs, the California Chamber of Commerce, the California Trucking Association, and the California Association of Highway Patrolmen.
Meanwhile, on June 5, voters approved Proposition 69, the constitutional amendment to protect the new vehicle registration fee and transit revenues, by a huge margin, with 81% of the vote.
Attached is a report on the recent hearing in Sacramento on the proposed gas tax/fee repeal, from TAMC Legislative Advocate Gus Khouri.