Road Repairs Jeopardized if New California Gas Tax Repealed, Stakeholders Say
A November ballot measure to repeal California’s recent gas tax increase threatens road improvement and maintenance projects that receive funding through the tax.
The initiative, which requires voter approval for any new gas tax increase, is retroactive to the beginning of 2017, effectively stopping the new fees created when lawmakers passed Senate Bill 1 last year. State and local infrastructure projects would not receive funding beyond the current fiscal year.
The California Department of Transportation and local agencies say they would try to finish all active projects, but projects that haven’t started construction would have to be canceled, downsized or delayed indefinitely.
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“SB 1 has opened the door to allow a lot of the projects on the back burner to finally move forward,” said Matt Robinson, spokesman for the Sacramento County Department of Transportation. “If that money runs out, those projects will be completed, but the ones after those will not be started quickly.”
Gov. Jerry Brown lobbied the Legislature for years to raise taxes to fix crumbling roads and bridges. Democratic lawmakers who passed the plan in 2017 argued that 23 years without a gas tax increase had created a $130 billion backlog in needed repairs and improvements.
SB 1 increased the base excise tax on gasoline by 12 cents per gallon and the base excise tax for diesel fuel by 20 cents per gallon. It also created an annual vehicle registration fee, ranging from $25 to $175, depending on the value of the car, and a fee for zero-emission vehicles beginning July 2020.
The plan is estimated to raise $5.4 billion annually over the next decade to pay for state and local transportation projects.
The tax provided $1.4 billion in new funding for the state in the 2017-18 fiscal year, and $2.3 billion for the state in 2018-19, according to the governor’s budget. Local authorities, such as city and county transportation departments, received the same amount, because SB 1 divides the tax revenues equally between state and local transportation priorities.
Caltrans spokesman Matt Rocco said the state has used the majority of the money it received from SB 1 on highway maintenance. Caltrans has finished 17 projects statewide, he said, such as the completion of the new Midway Road bridge over I-80 between Sacramento and San Francisco.
“These projects are fixing roads that we use to take our kids to schools,” he said. “We use these roads to get to work. We’re already making an impact. We’ve got 17 projects and it may not sound like a lot, but for those who use the roads everyday, it’s made a big difference.”
More than 200 projects have been awarded to contractors or are in the design and planning phase, according to Rocco, and 56 others are under construction. By 2027, CalTrans hopes to repair or replace 17,000 miles of pavement and 7,700 signals, signs and sensors throughout the state.
If the repeal passes, Caltrans would lose about a third of its nearly $14 billion budget. For its projects not to be canceled or delayed, Rocco said the department would have to find another source of funding.
Proponents of the initiative say the state already has enough money for road repairs.
Led by conservative politicians, the campaign argues that the tax increase is unnecessary and wasteful because the Legislature spends existing gas tax revenue inappropriately on public transportation programs or government salaries rather than directly on road construction.
“Other states have to deal with ice and sleet and snow, and they can maintain roads at a far lower tax burden,” said Carl DeMaio, chairman of the coalition Reform California. “In California, politicians have stolen and diverted gas tax and put the money into everything but roads, and this is continuing under SB 1. [The repairs] should have been done using the existing gas tax.”
In the Sacramento region, Caltrans’ largest project is repaving and replacing 56 miles of pavement on U.S. Highway 50. The project will cost $278 million. Other projects in the region total more than $1.3 billion.
Sacramento County received $7.3 million from SB 1 last year and is to receive $21 million in the current fiscal year. It has used the funds to begin projects such as traffic signal upgrades and pavement overlay. Cities in the region are to receive another $18 million to complete their local projects.
Robinson said Sacramento County similarly would have to delay or cancel projects if the repeal is approved by voters. The county would have to focus on a few projects and search for funding from other sources, such as federal grants, he said.
Because the department receives its funding all at once each year, active projects already are fully funded, regardless of how Californians vote in November.
Recent polling indicates that the repeal is likely to pass. A USC Dornsife/Los Angeles Times statewide poll in May found that about half of registered voters supported a repeal of the higher taxes and fees, and 38% of registered voters supported keeping the taxes.
California pays the second highest per-gallon tax rate in the nation. The average retail price of gasoline per gallon in the Sacramento area was $3.56 this month, according to fuel-price tracker GasBuddy.com, almost a dollar more than the national average of $2.86.
