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Commentary

Return Taxpayers’ Money and Send a Message with Prop. 6



There is no question that California’s roads and bridges are in need of greater maintenance and congestion relief but there is also plenty of reason to question why the revenue from the new gas and vehicle that taxes (which Proposition 6 would repeal) could not be found within the annual budget, and whether it would best be returned to taxpayers’ pockets.

Senate Bill 1, passed in April 2017, imposed an estimated $52 billion in gas taxes and vehicles registration fees over 10 years. Specifically, the measure increased the fixed excise tax on gasoline by 12 cents a gallon (and will also hike a separate variable excise tax starting in July 2019), more than doubled the diesel excise tax from 16 cents to 36 cents a gallon, and raised vehicle registration fees from $25 to $175 per vehicle, depending on the vehicle’s value.

The measure is expected to cost the average household a couple of hundred to a few hundred dollars per year, and perhaps as much as $700 a year for households with two drivers who both have long commutes and expensive vehicles.

High gas taxes have not yielded good results for the state’s transportation infrastructure in the past, however, so how will things be any different now? The average price of gas in California is about $3.75 a gallon, second only to the island state of Hawaii ($3.87), and nearly $1 per gallon higher than the national average ($2.80), according to GasBuddy.com.

California’s nearly 56 cents per gallon excise tax on gasoline is also the second-highest in the nation, trailing only Pennsylvania by about 3 cents a gallon, and well above the national average of about 34 cents per gallon. In addition, the nonpartisan Legislative Analyst’s Office estimates that the state’s cap-and-trade program will add anywhere from 15 to 63 cents per gallon to the price of gas by 2021, and 24 to 73 cents per gallon by 2031, so even if Prop. 6 passes, California will still have the highest gas taxes in the nation.

Clearly, the state’s poor road infrastructure and congestion are not due to a revenue problem.

Yet, in the Reason Foundation’s latest Annual Highway Report, California ranked 42nd in the nation in highway performance and cost-effectiveness, 43rd in spending per mile (eighth-highest), and 49th in urbanized area congestion. California spends three times the national average on road repairs, the report notes.

California voters have repeatedly been promised that transportation funds will not be raided for other purposes, as they were with Prop. 42 in 2002 and Prop. 1A in 2006. Yet, somehow, these “taxpayer protections” never work.

“If they want to fix our roads, the politicians need to stop stealing our money,” Carl DeMaio, the conservative talk radio host and former San Diego city councilman who is spearheading the Prop. 6 campaign, told me recently. These prior measures were “just window-dressing measures to fool voters into thinking that they are going to stop raiding. But they were written by the politicians! There’s always a secret trapdoor; it’s all been a fraud,” he added.

It is curious to see Democrats now suddenly and piously wringing their hands about transportation infrastructure when they have so clearly made it such a low priority for so many years. Rather than fully funding the state’s transportation needs in the budget, they have doled out money to lower-priority pet programs—and then punished taxpayers with tax increases to make up for their wasteful spending.

Even when the money is spent as intended, it is frequently wasted. An April 2011 California State Auditor report found that 62 percent of completed Caltrans projects were over budget. In a May 2014 report, the LAO identified 3,500 redundant positions in Caltrans’ Capital Outlay Support program, at a cost of more than $500 million a year. A March 2016 California State Auditor report found that Caltrans’ maintenance division was basing funding decisions on historical budget outlays instead of actual maintenance needs, failing to track responses to service requests and maintaining “weak cost controls over field maintenance work orders,” thus creating “opportunities for waste, fraud and abuse.”

The numerous reports and admonitions of auditors, which have largely fallen on deaf ears, reveal Caltrans’ long-term dysfunction and disregard of taxpayers’ dollars. If legislators want to raise transportation taxes and fees, at the very least they should first get Caltrans’ house in order and show that they can spend taxpayers’ money responsibly, efficiently, and for the purposes they promised. Until then, Prop. 6 is needed to return taxpayers’ money and send a strong message that Sacramento needs to be more accountable for its transportation spending.


Adam B. Summers is a Research Fellow at the Independent Institute.






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