After the new gas taxes, just say no

April 13, 2017

OPINION by MICHAEL BROWN

Surprise, surprise – San Luis Obispo County Supervisors Debbie Arnold and Lynn Compton and the Central Coast Taxpayers’ Association were absolutely right in opposing the 2016 Measure J countywide sales tax increase.  At the time, they said, this is a state responsibility. Let’s see if the governor and the legislature actually come up with something before we shoot ourselves in the foot with a new local tax.

And guess what?  The legislature just approved a new $52.4 billion dollar dedicated ten-year transportation funding program (Senate Bill 1). In addition to billions for state highway maintenance, the plan contains dedicated annual funding for local streets and roads.

According to the Senate Appropriations Committee, this bill is expected to generate an amount equivalent to $52.4 billion in transportation revenues over a ten-year period, approximately $26.6 billion of which would be dedicated for local expenditures and $25.8 billion for state purposes. Overall revenues are estimated at $2.78 billion in 2017/2018 fiscal year, $4.55 billion in 2018/2019, and $4.88 billion in 2019-20.

Revenues are generally expected to increase annually thereafter, once all revenue sources are fully implemented and specified adjustments are made each year by the CPI, eventually reaching approximately $6.5 billion by the 2026/2027 fiscal year.

In a somewhat devious and obfuscatory fashion the program is presented as having a ten-year life. But the bill actually does not contain a sunset clause on the new taxes at year ten, or ever. Thus, and unless a future legislature rescinds or modifies the tax increases, they will continue indefinitely.

In effect, the program is not simply a huge $52.4 billion transportation program for ten years but a massive and unending confiscation of the people’s resources. The taxes could generate hundreds of billions over the decades. Worse yet, by adding the new taxes, the Sacramento politicians can use existing revenues, which are also increasing, to fund more staff, more raises, more out of control pension costs, more pet projects and patronage.

Back down here at the county level, imagine, if Measure J had passed? SLO County taxpayers would now be double burdened with a new ½ cent sales tax plus increases in the State gasoline tax, diesel fuel tax, and vehicle license fees. Some of the cities already had voter-approved tax overrides, which, had Measure J passed, would have meant that their citizens would be triple taxed.

The county itself, as a government entity, will be better off under the state program than Measure J. The Measure J tax would have provided the County with $50.1 million over the nine-year life of the tax for its local roads in the unincorporated areas. According to SLOCOG estimates, SB 1 will provide the county an average $13.2 million per year, which over nine years, is $118.8 million.

Under the State SB 1 formula the cities will gain less than they would have received under Measure J. For example, the City of San Luis Obispo will receive $14.2 million over nine years under the state program. It was to have received $20.2 million under the Measure J program.

Similarly, the City of Paso Robles will receive $9.5 million over 9 years from the SB 1 allocation. It was slated to receive $13.9 million under Measure J. The other cities will receive proportionally less. These differences are primarily due to the state allocation formula having a stronger weighting for lane miles than Measure J. This benefits the county.

On the other hand, the state program contains a number of urban oriented greenhouse gas reduction, complete streets (lights, benches, trees, bike lanes, etc.), urban design and construction programs, and transit type projects tailored for cities. These should be right up their alleys – figuratively and literally.

An interesting and ironic side light is that the portion of the 12 cent per gallon increase attributable to gasoline for boats and off-highway vehicles will be transferred to the State Parks and Recreation Fund to be used for off highway vehicle and boating programs. The lefties who supported the tax can be thanked for helping secure the future of the Oceano Dunes Vehicle Riding Area.

Sample annual expenditures are outlined below:

·         $1.49 billion for state highway maintenance and rehabilitation.

·         $1.48 billion for local streets and road maintenance and rehabilitation.

·         $769 million for transit purposes.

·         $400 million for state bridge and culvert repair and maintenance.

·         $300 million for trade corridor improvements.

·         $250 million for congested corridor improvements.

·         $200 million for “local partnerships” for local agencies that have adopted local sales tax measures for transportation purposes.

·         $100 million for the active transportation program.

·         $82.4 million for regional transportation improvement plans.

·         j) $27.5 million for interregional transportation improvement plans.

·         k) $25 million for local planning grants (SB 375 planning).

·         $25 million for freeway service patrols.

·         $7 million for transportation research at state universities.

Of course these funds don’t come for free. The new law increases a number of transportation-related taxes and fees on the general public, business, and agriculture as follows:

·         Gasoline excise tax: $0.12 a gallon

·         Diesel excise tax: $0.20 a gallon

·         Diesel sales tax: 4% a gallon

·         Road improvement fee for zero-emission vehicles, as defined: $100 a year

·         Transportation Improvement Fee (TIF): the fee will be based on the market value of the vehicle with the fee range described below:

– $25 per year for vehicles with a market value of $0 to $4,999

– $50 per year for vehicles with a market value 0f $5,000 to $24,999

-$100 per year for vehicles with a market value of $25,000 to $34,999

-$150 per year for vehicles with a market value of $35,000 to $59,999

– $175 per year for vehicles with a market value of $60,000 and higher

The wording requires that the tax rates and fees specified in this bill be adjusted annually based on the Consumer Price Index (CPI).

Keep in mind that prior to SB 1 passing, California already had some of the highest taxes and fees in the nation related to transportation:

Gas tax: California already had the nation’s 7th highest “gas pump” tax at 56.6 cents/gallon (November, 2016). But add in the unique 10-12 cent CA “cap and trade” cost per gallon, and California is in the top 3 states (with PA and WA). National average is 48.9 cents. Yet California has the 9th worst highways.

Cap and trade tax: California has now instituted the highest “cap and trade” tax in the nation – indeed, the only such U.S. tax. Even proponents concede that it will have zero impact on global warming.

Fines and fees: California driving tickets are incredibly high. For example, the fine for a red-light camera ticket is $490. In the next highest state (Washington) the fine is  $124 – $250. In most states it is around $100.

transportation costs: California has the second highest annual cost for owning a car – $4,112, or $370 higher than the other 49 states’ average.