California Gas Taxes: Existing & SB1 $$$

(L) Jackson 10 4-6-2017 (4 of 1)
Can Californians afford an extra $10 a month? Apparently, we can according to a majority of our state legislators. Both Senate and Assembly passed SB1 yesterday in dual marathon sessions which lasted late into the night, despite impassioned opposition on both sides of the aisle.

(S) Senate Floor SB1 4-6-2017 (10 of 1)
CA Senator Jim Nielsen – Photographer: Steven Styles/ Belator Media

As of this morning, SB1 was on the governor’s desk… awaiting signature.

The bill was introduced by Senator Beall, with principal coauthor Assembly Member Frazier, coauthors: Senators Atkins, Dodd, Hertzberg, Hill, McGuire, Mendoza, Monning, Skinner, Wieckowski, and Wiener and Assembly Members Low, Mullin, and Santiago.

(S) Senate Floor SB1 4-6-2017 (12 of 1)
CA Senators Beall & Weiner, Senate floor (SB1) – Photographer: Steven Styles/ Belator Media

Governor Brown–as well as several California legislators–have been campaigning hard for Senate Bill 1 a 10-year plan which would boost gasoline excise taxes for the first time in more than two decades, an increase of 43% (or, about .12 cents per gallon) a percentage which is slated to rise automatically with inflation. The aforementioned plan estimates that the average motorist will pay less than $10 per month more than they already do.

(S) Gopv Brown SB1 rally 4-5-2017 (105 of 1)
Governor Brown  & CA Senate Pro-Tem DeLeon campaigning for SB1

The plan also includes a ‘sliding fee’ on vehicles, with owners of cheaper vehicles paying less. The fee which is separate from annual vehicle registration fees will range from $25 a year–for vehicles worth less than $5,000–to $175, for cars worth $60,000 & higher.

Minority state senators aren’t the only ones who think the gas tax is unnecessary. According to Jon Coupal, president of the Howard Jarvis Taxpayers Association, the state has plenty of money that could be “redirected to transportation funding” without the need for raising state-level taxes, which are already among the highest in the nation.

(S) Senate Floor SB1 4-6-2017 (4 of 1)
4-6-2017 on the floor of the California Senate (SB1) – Photographer: Steven Styles/ Belator Media

Jon Coupal suggested that the state “redirect money” from various floundering projects, as well as reduce department staffing.

It is unnecessary and insulting to the taxpayers of the state of California… there is so much money sloshing around in California that could pay for this, we don’t need another tax.  – Jon Coupal, Howard Jarvis Taxpayers Association

(S) Senate Floor SB1 4-6-2017 (6 of 1)
4-6-2017 CA State Assembly floor (SB1) – Photographer: Steven Styles/ Belator Media

In a 2015 San Jose Mercury News Q&A article, traffic & transportation journalist Gary Richards answered a reader’s question regarding how much of California’s gas taxes actually go to roads:

… Most gas tax money is earmarked for transportation. The state has been diverting $100 million of the $5 billion raised annually to the general fund, according to the Howard Jarvis Taxpayers Association, along with $1 billion in annual truck weight fees to pay debt on general obligation bonds.

  • About 85 percent of the federal gas tax of 18.4 cents a gallon goes to highways, and the remaining 15 percent goes for transit.
  • On the state side, our 48.6 cents-a-gallon tax brings in around $5 billion a year. Of the total, about 57 percent goes to highways, 36 percent for cities and counties (for various needs, mostly streets and roads) and 7 percent for transit. Put it together, and you get a 90/10 split between roads and streets versus transit. (Source: Gary Richards, San Jose Mercury News)

According to the most recent statistical data available on the Board of Equalization website (for fiscal year 2014-2015) California took in over $5.3 Billion in Fuel (Excise) Taxes. There are several mentions of the “Fuel Tax Swap” in the report, which comes to us care of a former governor:

(S) Global Warming Solutions Act commemoration 10-5-2016 (16 of 1)
Photographer: Steven Styles/ Belator Media

In March 2010, Governor Arnold Schwarzenegger signed two fuel tax measures (AB x8 6 and SB 70), commonly referred to as the fuel tax swap, which adjusted the rates of the sales and excise tax on gasoline, effective July 1, 2010. The fuel tax swap legislation was designed to be revenue neutral, ensuring overall state taxes paid by consumers at the pump are the same as they would have paid under the prior tax structure.

Thus, the fuel tax swap legislation does not produce a net revenue gain in overall state taxes paid at the pump. The legislation mandated the Board of Equalization adjust the excise tax rate every year by March 1. The new rate is effective July 1 of each year.

(S) Senate Floor SB1 4-6-2017 (8 of 1)
4-6-2017 CA Senators Leyva & Weiner on Floor (SB1) – Photographer: Steven Styles/ Belator Media

So, how much of the money “earmarked” for transportation actually goes to fixing roads? According to the Legislative Analysts Office website, under 1/3 of the money generated by existing gas taxes. For the 2016-2017 budget only $1.6 billion was budgeted  to “maintain and rehabilitate core aspects of the state highway system—pavement, bridges, and culverts—as well as local roads.”

(S) Gov Brown Infastructure Press Conference 2017 (6 of 2)
Governor Brown, 2017 infrastructure press conf. Photographer: Steven Styles/ Belator Media

So, where’s the other $3.8 billion in existing gas tax revenues going, if they’re not being spent on road, highway, bridge & culvert maintenance?

Gas tax revenue aside, let’s talk about where our vehicle registration fees go. Again, the Legislative Analyst’s office supplied the most concise answer that I could find:

The MVA (Motor Vehicle Account), which receives most of its revenues from vehicle registration and driver license fees, primarily supports CHP and DMV. Due to expenditures outpacing revenues, the MVA has faced an operational shortfall in recent years and will continue to experience a shortfall in 2016–17, absent corrective actions. (Source: Legislative Analyst’s Office website)

In order to address the above-mentioned “shortfall”–and to support “proposed new expenditures” the Governor proposed to raise the vehicle registration fee by $10 for the 2016-2017 budget and index the “fee” to inflation. Even with these corrective measures, in the same report the LAO predicts that the MVA will be “barely balanced” and is “likely face an operational shortfall” in the tens of millions by 2019–20.

Asking taxpayers to pay hundreds of dollars a year in more taxes when we’ve not spent one dime more on transportation from the general fund in years makes no sense. We have plenty of money … we just need to spend it on the right priorities.                      State Sen. Jeff Stone, R-Temecula

(S) Senate Floor SB1 4-6-2017 (13 of 1)
4-6-2017 CA Senator Jeff Stone – Photographer: Steven Styles/ Belator Media

There is a silver lining in the loss of all this green: under SB1 “zero-emission” vehicles will now have to pay an annual fee of $100 to help pay to maintain the roads they shared alongside gasoline-fueled vehicles.

Article by L. R. Styles. Photographer: Steven Styles/ Belator Media

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