Gas tax hike not enough to fix California’s roads, group says
A newly passed transportation funding bill that raises California’s gasoline tax by 12 cents a gallon isn’t a long-term fix for the state’s crumbling roads, according to a report released Monday by a nonprofit, nonpartisan think tank.
Better fuel economy and the growing number of electric, hybrid and zero-emission vehicles make the gas tax an outmoded, unreliable funding source for transportation, states the report, “Beyond the Gas Tax: Funding California Transportation in the 21st Century,” put out by Next 10 in conjunction with Beacon Economics.
That’s despite the tax increases called for in the transportation bill, SB 1.
“SB 1 may prove to be a temporary solution to a growing and permanent problem,” Adam Fowler of Beacon Economics said in a news release.
The Legislature passed SB 1, or the Road Repair and Accountability Act of 2017, in early April. SB 1 would raise $52.4 billion over 10 years for road repairs and other transportation projects by increasing the gas tax, which would be adjusted annually for inflation.
Prior to SB 1, the state’s gas excise tax had not been raised in roughly 20 years. SB 1’s backers said inflation has eroded the tax’s ability to fix roads.
SB 1 also raises diesel taxes and imposes new annual fees on vehicles. Gov. Jerry Brown, who championed the bill, is expected to sign it soon.
In a telephone interview, SB 1’s author, state Sen. Jim Beall, D-San Jose, said the bill “is designed to reduce the one-time cost of the road repair backlog at the state and local level.”
“It’s kind of like your mortgage,” he said. “Once you pay it off, your costs are lower.”
Chris Lee, a legislative analyst with the California State Association of Counties, said SB 1 is meant to be a bridge to a long-term funding system to maintain California’s roads. In the meantime, it addresses the road repair backlog that’s built up now.
Through the new annual fees on vehicles, SB 1 will raise money for transportation in a way that’s not linked to fuel prices, he added.
While calling SB 1 a good start, $52.4 billion “falls short of current $137 billion deferred maintenance deficit that has not been addressed,” Next 10 said.
That deficit may continue to grow, the group said.
“Inflation adjusted fuel-tax revenue declined 20 percent from 2010 to 2015, despite the fact that Californians have been driving more every year, logging a record 335 billion vehicle-miles traveled last year.”
The drop in gas-tax revenue coincides with improvements in fuel economy and the rising popularity of zero-emission vehicles, the report found. Light-duty vehicles improved their fuel efficiency by 27.4 percent in the past decade and 258,000 of the 530,000 zero-emission vehicles sold in the U.S. in 2016 were bought in California, the report said.
While Californians are driving more than ever, they’re not buying as much gas. The average amount of fuel sold per day in 2015 was half as much as it was in 2002, according to the report.
If the state meets its 2025 goal of putting 1.5 million zero-emission vehicles on the road, it would cost $572 million in state gas-tax revenue and $276 million in federal gas-tax revenue, the report found.
California’s roads are in bad shape. Sixty-eight percent are in poor or mediocre condition compared with the nationwide average of 24.4 percent, and most state roads have reached or exceeded their useful life, the report read.
The report suggests taxing drivers based on the number of miles driven and building toll roads funded through public-private partnerships.
While privately funded projects save taxpayers money, the kind of low-risk, high-profit projects preferred by the private sector may not match up with all transportation needs and the use of toll roads tends to suffer when the economy slows, the report read.
The road-usage, or miles-driven, tax presents a thorny dilemma – how to measure the number of miles traveled without violating the driver’s privacy.
“People have gotten used to the idea that, for example, their smartphone apps share location information with unseen companies large and small,” Next 10’s founder, venture capitalist F. Noel Perry, said in a news release. “But letting the government know how far you’ve traveled is a different matter for many.”
A state pilot program to gauge the feasibility of a miles-driven tax ended March 31. It went very well, said Curtis Vandermolen, deputy director of the California Transportation Commission.
“The more people participated in it, the better it got for them,” he said.
Read the report: http://www.next10.org/transportation-funding