California

California Voters Could Repeal a $54 Billion Gas Tax Increase

Californians pay some of the highest gas taxes for some of the worst-maintained roads in the country.

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Iofoto/Dreamstime.com

When Californians go to the polls today, they'll be deciding if they should keep paying some of the highest gas taxes in the country for some of its most expensive, poorly maintained roads. On the statewide ballot this cycle is Prop. 6, which would repeal a 10-year, $54 billion package of vehicle fee and gas tax increases passed by the state legislature back in 2017. The measure would also require future gas tax increases to be approved by voters.

Since qualifying for the ballot this summer, Prop. 6 has proven both controversial and expensive.

Some $50 million has been raised for the Prop 6. campaign, the vast majority of that (some $46 million) going to the pro-gas tax side. The lion's share of those funds come from construction companies, building trade unions, engineering firms, and their associated PACs.

This money has helped boost the message that without the added gas tax revenue, Californians will literally die.

"If we see this repealed, we will pay—make no mistake," said Los Angeles Mayor Eric Garcetti. "We'll pay in lives, we'll pay in dollars, we'll pay in broken axles, we'll pay in popped tires, we'll pay during earthquakes."

"Crumbling bridges and roads put lives at risk every day," said Kristina Swallow, president of the American Society of Civil Engineers in an anti-Prop. 6 ad.

"Some of this is a bit of a scare mechanism. There are certainly other revenue sources they could find," says Baruch Feigenbaum, a transportation policy expert with the Reason Foundation (the non-profit that publishes this website).

California does have a huge number of road maintenance projects it needs to complete, says Feigenbaum. According to the Reason Foundation's 2018 Highway Report, California ranks 46th in the quality of its urban interstate highways, and 46th in the quality of its rural arterial roads.

The problem is not a lack of money.

Reason's Highway Report also found that the state spent the fourth most per mile on road maintenance and tenth most per mile on capital and bridge expenditures. Its gas taxes were the seventh highest in the nation before 2017's tax hike. With the tax hike they are now the second highest in the nation, behind only Pennsylvania. Californians pay an average of 55 cents a gallon in taxes at the pump.

This mix of high per mile spending, high gas taxes, and poorly maintained roads is a sign of just how inefficient California's transportation bureaucracy has become, says Feigenbaum.

Heavy influence from the state's engineering union has blocked cheaper means of delivering infrastructure, Feigenbaum maintains. This includes limiting the use of design-build—a project delivery method whereby one contractor is responsible for designing and building the project—and public private partnerships, where private capital and expertise is tapped for public projects. (Both methods cut down on the need for expensive, state-employed civil engineers.)

It's also a matter of priorities, says Feigenbaum, noting the huge amount of gas tax money the state spends on mass transit projects.

In April, the state announced some $2.6 billion in transit grant awards funded by the 2017 gas tax increase for everything from light rail in Sacramento to electric buses in Los Angeles. This same tax funds another $100 million in "active transportation" projects like bike lanes and recreational trails.

Democratic dominance at the state level ensures that no one is held accountable for overbudget, behind-schedule delivery of projects. That, Feigenbaum adds, reduces the incentive to spend gas tax dollars efficiently.

"The current actors are so insulated from [accountability] because of one-party rule," he tells Reason. "The whole system badly needs reform but politically it's almost impossible."

The result is that voters are stuck with two bad options. Delivering projects without a gas tax increase would require politically unpalatable reforms. Meanwhile, scaling back gas taxes without necessary reform could jeopardize some worthwhile projects.

Tellingly, most business groups have declined to support the gas tax repeal. The California Chamber of Commerce is actively opposed to it. Most of the funding for the pro-repeal side is coming from Republican campaign committees, hoping to drive conservative turn out with an anti-tax message.

Polling is mixed on the measure. A Public Policy Institute of California survey from October has support for Prop. 6 at 41 percent, with 48 percent being opposed. An Eyewitness News/Survey USA poll released today shows the exact opposite, with 48 percent in favor of gas tax repeal, and 41 percent opposed.

Whatever the outcome of the election, California will still be left with a transportation funding system that routinely wastes taxpayer dollars.

California Gas Taxes Transportation Policy