Governor Brown’s Proposed Budget Includes First New Gas Tax Funds

Governor Brown presents his budget proposal Wednesday in Sacramento. Image: Screengrab from
Governor Brown presents his budget proposal Wednesday in Sacramento. Image: Screengrab from

Governor Jerry Brown released his proposed 2018 budget this week, as usual warning about an inevitable downturn despite the current strong state economy and calling for fiscal prudence. Nevertheless, the transportation portion of the budget received a big boost from S.B. 1, the new gas tax that went into effect in November, including new vehicle license fees starting January 1.

Transform’s Joshua Stark finds reason to like what’s in the budget so far, in part because it would invest more in public transportation, walking, and biking than any previous state budget.

The gas tax is expected to raise over $4.6 billion in its first year for transportation projects, with over $800 million of that directly invested in transit and active transportation projects, according to Stark:

  • $330 million for the Transit and Intercity Rail Capital Program (TIRCP)
  • $355 million for the State Transit Assistance Program
  • $100 million for the Active Transportation Program (to a total of around $220 million)
  • $36 million for commuter rail and intercity rail

“In particular,” writes Stark, “the increase to the TIRCP results in dedicated investments for equity — a first for California’s traditional transportation funding programs.”

The TIRCP is a program funded by the Greenhouse Gas Reduction Fund (GGRF), which invests money from the cap-and-trade system in projects that reduce greenhouse gases, and it is required to invest at least a quarter of its revenues to benefit disadvantaged communities. By adding money from S.B. 1, writes Stark, “California is better aligning transportation funding with the urgent need to address climate change and inequality.”

Brown has not yet released his plan on how to spend the GGRF. Cap-and-trade spending has been treated as a separate process from the rest of the budget, and Brown plans to release his ideas for this year at his State of the State speech on January 25.

Meanwhile, Jared Sanchez of CalBike was cautiously optimistic, calling the budget proposal “a fiscal double-edged sword.”

“Increasing meaningful appropriations for sustainable modes of travel is no small feat,” he said. But much of the transportation funding in California remains unconnected to other state goals. “With no strong connection between transportation funding and social equity, climate change, or public health, any increase in the former remains feeble and inadequate,” said Sanchez.

Stark pointed out that there are several things missing from the proposal that TransForm argues need state attention, including “larger investments in the Active Transportation Program and dedicated funding for student transit passes.”

Budget negotiations will continue throughout the spring, and Brown is expected to issue a revised budget proposal in May, when it’s a little more clear what tax revenues will likely be. The final budget must be approved by both the Senate and Assembly by the end of June.

See TransForm’s analysis here.

5 thoughts on Governor Brown’s Proposed Budget Includes First New Gas Tax Funds

  1. They are all leaches .. They produce nothing and steal from the working class dog every day. This is to fund their salary, free heath care and pensions payed for by the little guy who never got a raise after the great recession, but the cost off living keeps going up.

  2. The pay rates for the Legislature and Governor are determined by an independent commission and even after raises, are still barely hovering around the same amount that they were paid before the massive pay cuts handed out during the Great Recession.

  3. Schwarzenegger also pushed through Prop 1B to fill in some of the shortfall from the vehicle license fees and maintain roads. Which means we pay those costs and 2x-3x more as debt service over 30 years.

    Of course, politicians can rely on amnesia and there’s always someone who will blame whoever’s in office now for the decisions made then. Right on cue, a comment from the OP about “Jerry.”

  4. Where does the magic money come from to maintain our roads? Where does the magic money come from to remedy the ongoing damage to our environment that is directly caused by our car culture? In both cases, future generations have to take care of the tab (thanks, in part, to our financing of road projects with debts).

    From 1935 to 1948, the vehicle license fee was 1.75%. In 1948 this was increased to 2%, where it remained for half a century. In part due to a populistic move by Gov. Schwarzenegger (which he later claimed to regret), the vehicle licensee fee was reduced to 0.65% (and where it remains today).

    As noted by the LA Times in 2011: “Schwarzenegger’s first act as governor in late 2003 was to knock the tax back down to 0.65%. It was probably his biggest financial mistake, certainly one from which the state never has recovered.” from: “Californians are paying a high price for a low car tax,”
    Jerry Brown is a fiscally responsible governor who has remedied much of Schwarzenegger’s economic irresponsibility. He helped move our state out of the red and into the black. It’s financially prudent that today’s road users assume a higher share of the expense of maintaining our roads.

  5. My 2009 Chevy was $58 more in registration and the 2008 Pontiac was $48 more this year than last. So that’s $106 less in my pocket this month …. I didn’t get a raise to cover that… so where does the “magic money” come from Jerry? Well, I didn’t go out of town this weekend, or the movies or spend at the store. Bottom line , I do with less of other stuff to cover the new extortion fee. Maybe you should pay for it Jerry, you gave your self and the legislators a raise last year.

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