California Republicans want to beat back the nationwide trend of states, including right-leaning ones, increasing their gasoline taxes to pay for infrastructure improvements.
Californians will vote in November on a ballot proposition that would kill recent hikes to state gas taxes and vehicle fees that fund road repairs and mass transit projects. If it passes, the measure would also require voter approval for any future gas tax increases. No other state will have a similar measure on its ballot.
California’s Republican congressional delegation, including House Majority Leader Kevin McCarthy and Rep. Mimi Walters, who is facing a tough re-election fight, helped finance the campaign to put this initiative on the ballot. They plan to spend even more to make it pass.
“The liberal legislature in the state of California continues to tax hardworking Americans, instead of spending our tax dollars wisely,” Walters said in an interview with the Washington Examiner. “They continually waste our money in Sacramento and then have to go to the taxpayers in California and ask for more. Californians are sick and tired of the abuse and will stand up to it.”
Since 2013, more than 25 states, including Republican states such as Wyoming and Georgia, have raised their gas taxes due to federal inaction. The federal tax on gasoline has not been raised since 1993, holding steady at 18.4 cents per gallon and 24.4 cents per gallon for diesel. It is not indexed to inflation. Last April, California Gov. Jerry Brown, a Democrat who is retiring, signed a bill increasing the state’s base excise tax on gasoline by 12 cents per gallon, raising it to 30 cents, the first gas tax increase there since 1994.
The debate in California over the gas tax comes as prices at the pump are rising nationally because of geopolitical risks to the world’s oil supply. President Trump, fearing backlash at the polls, has encouraged the world’s oil producers to boost supply to offset higher prices.
California drivers already pay the highest average price for gasoline after Hawaii, paying $3.66 per gallon as of July 3, compared to the $2.86 national average, according to AAA. Democrats have attacked Trump for the rise in gasoline prices, blaming his foreign policy moves, including his plans to sanction Iran’s oil exports, for reducing global supply.
California Republicans hope angst over higher fuel prices will inspire turnout in the November elections, and harm Democrats who supported tax increases.
“This fall, Sacramento Democrats will have to defend and answer for the most egregious tax hike on California workers and families in years — the gas tax,” McCarthy told the Washington Examiner. “While Republicans are fighting for more jobs, higher pay, and lower costs of living, the Democrats want to accelerate the unsustainable status quo through their only tried-and-true solution to everything: higher taxes.”
But supporters of the higher gasoline tax say it is the most fair way to pay for California’s major infrastructure repair needs, and to relieve its notorious congestion, since the levy is a user fee paid for by people who drive. Brown, California’s governor, promised the higher gas tax and new fees would provide $5.2 billion annually for maintenance, repair, and safety improvements on state highways, local streets and roads, bridges, tunnels and overpasses.
That money also funds expanded mass transit in the state.
The measure rose the excise tax on diesel fuel by 20 cents per gallon to 36 cents per gallon, and made electric car owners pay a $100 annual fee in lieu of gas taxes, starting in 2020.
And it imposed an annual vehicle registration fee ranging from $25 for cars valued at under $5,000 to $175 for cars worth $60,000 or more. Brown said the taxes and fees will cost most Californians about $10 per month.
Supporters of the higher taxes and fees said repealing them would imperil about 5,000 projects currently under construction that are already counting on the new revenue.
“We have encouraged jurisdictions, cities, counties, and transportation districts, as well as the state to implement projects as quickly as they can to show people their money is going to work as intended,” said Roger Dickinson, executive director of Transportation California, a nonprofit representing business, labor and local agencies that support more funding for infrastructure.
“Nobody in California has argued, even the most ardent opponent of increasing transportation funding through higher fees, that the transportation system is in good shape,” Dickinson added.
The Coalition to Protect Local Transportation Improvements, a broad group that includes business interests, environmental groups, and local governments, says California has a combined need of more than $130 billion over 10 years for state highway, and local street and road systems.
The California Chamber of Commerce, which belongs to the coalition, is also seeking to keep the higher gas tax, arguing poor infrastructure makes the state less competitive, and hampers its ability to move goods to other states.
Its position mirrors that of the U.S. Chamber of Commerce, which this year called for the Trump administration and Congress to raise the federal gas tax by 25 cents per gallon to help pay for a federal infrastructure investment package. The Chamber projected that this would generate more than $375 billion over a decade.
“We just can’t let our roads and transportation system deteriorate,” said Allan Zaremberg president and CEO of the California Chamber of Commerce. “A lot of our state’s business depends on exports to other states. This is not just about today’s construction jobs. It’s about being able to have a transportation system that delivers goods and people where they need to go.”
Republicans acknowledge the transportation problems facing California, but contend that politicians should better allocate existing money from the state’s budget to pay for repairs and improvements. Last month, Brown signed a $139 billion budget that produced $16 billion in savings, a surplus that conservatives say should contribute to roads and bridges.
“With the high cost of living in this state and the fact people have long, expensive commutes, raising the gas tax when you don’t need to is just a non-starter for voters,” said David Gilliard, a Republican political consultant who runs Give Voters A Voice, a campaign committee lobbying to repeal the gas tax increase.
