Gas tax, fees will boost road repairs statewide
Bill includes some fundamental changes in road, infrastructure support
Bad roads are old news to Sonoma County citizens. Vocal groups like SOSRoads have successfully pushed county government to increase repair funding for the past four years, but there has never been enough money to fix the miserable condition of the county’s 1,380 miles of roads, most of which are substandard.
State highways alone have $59 billion in deferred maintenance, according to a legislative analysis of the bill. On average, a California driver spends approximately $700 a year for repairs caused by rough roads.
The first increase in gasoline excise taxes in 23 years was passed by the state legislature on April 6. Along with increases in registration fees and improvements to Caltrans efficiency, coupled with new oversight, this should provide $52.4 billion over the next 10 years.
Besides fixing roads, these taxes fund the Department of Motor Vehicles and the California Highway Patrol.
The universal outcry over the state’s bad roads is reflected in the support of groups as varied as SOSRoads and the Sonoma County Taxpayer’s Association (SCTA).
“We think it was a really important piece of the puzzle in getting our roads in shape,” SOSRoads founder Craig Harrison said. “Give [the county supervisors] credit for putting more money in roads, but they are hitting a plateau. This is a great leap forward. We are confident that the county will maintain the current level of funding and supplements.”
According to the terms of the Road Maintenance and Rehabilitation Act, counties will have to maintain their current levels of road spending to keep getting state funds for road repairs.
Tim Hannon, SCTA president, however reluctantly, agrees that the new revenues are sorely needed.
“The roads need to be fixed,” Hannon said. “And the new bill imposes efficiency measures on Caltrans, eliminating waste, and makes sure that transportation dollars are spent on transportation.”
While he finds the new taxes regressive, he gives them a grudging yes. “They’re necessary,” said Hannon.
But, he added, “The SCTA would like to see the Legislature get more fiscally responsible, cut back on bloated pensions, reduce the number of bureaucrats, and eliminate the high speed rail boondoggle.”
Raising the excise taxes and fees won’t take another 23 years. The new law subjects these tax rates and fees, other than the diesel sales tax, to annual adjustments based on the California Consumer Price Index.
“The bill will bring in over $5 billion annually in new revenues,” bill co-sponsor Mike McGuire said. According to McGuire’s statement issued right after the bill was passed, Sonoma County stands to be a big winner. McGuire said Sonoma County is targeted to receive $20,739,000 annually, compared to $9.7 million for Marin, $5.6 million for Mendocino, and $7.7 for Humboldt counties.
Like most tax bills, the details are complex and somewhat murky.
Most of the new tax increases on gasoline and diesel fuel take effect on Nov. 1, including both excise and sales taxes. Excise taxes are built into the price of fuel while sales taxes are charged at the time of sale.
Specifically, the bill increases the excise tax on gasoline by 12 cents a gallon, the excise tax on diesel by 20 cents a gallon, and adds four percent to the diesel fuels sales tax. All of these are effective on Nov 1.
Vehicle registration fees will increase from $25 to $175 a year, depending on the vehicle’s valuation. These new fees will begin in 2018.
Even electric cars will have to support the cause. A $100 registration fee on zero-emission cars will start in 2020.
Over $700 million of the new income will be used to retire debts owed by the General Fund to specific transportation accounts, money that was “borrowed” over the past 10 years. How using future transportation tax money to pay back transportation funds borrowed discharges General Fund debts is not explained.
Most of the new money will be split evenly between state and local projects, with some money being earmarked for special trade corridors to reduce congestion at places like the Port of Los Angeles and Long Beach.
About $34 billion of the first $52 billion would go to repairing roads, bridges, highways and culverts, with most of the money split 50-50 between state and local projects.
Another $7 billion over the first decade would go to mass transit projects.
Fifty percent of the diesel excise tax increase ($0.10), estimated at $300 million, will fund corridor-based freight projects nominated by the state and local agencies, including roads serving the ports of Los Angeles and Long Beach, and would go toward reducing congestion on the most clogged commuter routes.
The bill also creates an Independent Office of Audits and Investigations within Caltrans to ensure the department and external entities are expending state and federal resources efficiently and effectively.
An estimated $750 million annually will be allocated for public transportation capital projects and operating expenses. These include local transit operators and for commuter and intercity passenger rail projects.
A grandfather clause will keep some diesel trucks operating up to 18 years that might otherwise be retired due to unknown future emission standards.