Fact Checking Arguments for Repealing the Gas Tax

S.B.1 requires the funds it raises to be spent in this way
S.B.1 requires the funds it raises to be spent in this way
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Proponents of Prop 6, which would repeal the recently passed gas tax increase, S.B. 1, want people to support their proposition, of course. They’ve put together a handy list of six reasons to vote yes on the S.B. 1 repeal—and Carl DeMaio, the failed candidate for San Diego Mayor turned radio personality who authored the proposition—has provided even more.

As he tours California to convince voters of the proposition’s righteousness, it’s worth taking a hard look at those reasons, because some people seem genuinely confused.

We could start with DeMaio’s assertion that taxation is equivalent to terrorism. To be specific, he accused opponents of Prop 6 of terrorism (for, hmmm, scaring people?) because they pointed out that California will lose billions in transportation funding if the tax is repealed.

When did “telling the truth” become terrorism?

A local station in San Diego quotes him saying: “That’s terrorism, that really is taking hostage the projects we’ve already paid for… The reality is not a single penny of the gas tax is actually earmarked for roads.”

Let’s leave aside the overblown rhetoric for now and focus on what look like substantive claims.

First: Those projects he says are being “taken hostage” would, in fact, come to an end. Prop 6 would return California to its previous situation of having a gas tax that hadn’t been raised in decades, was not indexed to inflation, and raised unstable, inadequate amounts of revenue. And saying they are “already paid for” is just blowing smoke. Gas tax revenues are an ongoing source of funding, and projects take years to plan and build. Many projects being worked on now, thanks to SB1, are still in the planning stages—and if Prop 6 passes, say bye-bye forever to them.

That’s because Prop 6 would make it impossible to ever raise any gas tax in California. This is something that can’t be emphasized enough: Prop 6 is a constitutional amendment that would require voter approval of any future increases in gas and car taxes. Given how difficult it was to pass S.B. 1 with a two-thirds vote of the legislature plus approval by the governor, the likelihood of fixing the old tax’s shortcomings via a two-thirds vote of the public are very slim.

The Howard Jarvis anti-tax groups strongly favor Prop 6, and especially this part of it. That’s not necessarily a recommendation. City, county, and school district budgets were slashed after their signature Prop 13 passed, and the extreme differences in property tax rates among neighbors–including industrial properties –is their legacy.

Before S.B. 1, cities and counties struggled to pay for basic road maintenance—witness the current mess on our streets, and the years of panicky complaints in the media about potholes. But they did find other ways to raise money, such as via sales taxes, which are more regressive and less directly connected to transportation than the gas tax.

If we can’t increase the gas tax, is the state supposed to try raising money for roads via gambling–the way the creation of the California lottery was supposed to pay for schools?

Second: “Not a single penny of the gas tax” is pretty hyperbolic, even for someone who loves being dramatic as much as DeMaio. Roads are being repaired all over the state right now with money that has already come in from S.B. 1. You can find them on this map. Transit projects and active transportation projects have gotten money too, although not nearly as much as projects that benefit drivers of private vehicles, which can be seen in the charts at the top.

Now for some of those other arguments in favor of Prop 6:

  • “It costs you a lot!”

Depending how they do the math, Prop 6 proponents claim that the gas tax costs the average two-car-driving family either $779.28 or $1,500 a year. AAA estimates that badly maintained roads cost the nation’s drivers $3 billion a year, which they average out to $300 per driver. TRIP, a national transportation research organization, puts that number much higher—at between $2,000 and $3,000 per driver annually in California, depending where you drive.

You can argue about the numbers, but don’t pretend that road maintenance won’t cost anything one way or the other. The question is, would you prefer paying for safer roads, or would you rather pay via unexpected repairs to your vehicle and emergency medical care? Preventative maintenance offers many more benefits than just a smooth ride, but it’s been difficult to keep up with in California because funding tends to go towards new projects rather than maintenance on what we already have.

  • “It’s a blank check without accountability”

S.B. 1 contains very specific language about what the money could be used for, and in the year plus since it passed, Caltrans and the California Transportation Commission have held numerous open, public workshops to discuss details about S.B. 1 program goals and priorities. Anyone can weigh in. Also, at the same time that S.B. 1 passed, the legislature put Prop 69 on the June ballot. That proposition required all funds raised by S.B. 1 to be used for transportation purposes only, and it passed with 81 percent of the public vote.

That’s apparently not enough for DeMaio and his crowd. They are proposing a ballot proposition for next year that would prevent gas taxes from being used for anything except roads. That means “no staffing costs, it has to be actual concrete and asphalt!” according to their press materials. “Roads must be the only use for gas tax funds.”

It’s hard to imagine how road repairs can be made without any planning, designing, or engineering input.

  • “The gas tax keeps going up”

Well, yes. Building in regular increases in the gas tax is the only way to avoid the situation California was stuck in before S.B. 1 passed. Passing any increase with a two-thirds vote of the legislature plus support from the governor, which was required for S.B. 1, is a heavy lift, and building in regular increases is an important part of that bill.

  • “The waste is staggering”

Prop 6 proponents are relying on a report from the Reason Foundation about Caltrans inefficiencies. The department maintains over 50,000 miles of state highways, which takes a lot of time, people, and money, which they don’t always have. No one would claim that Caltrans is perfect, but relentlessly bashing them to gain political mileage is not constructive. It would be more useful if the bashers also took note that the state has been addressing some of the major problems with Caltrans over the last four years, and while progress is slow it hasn’t been nonexistent.

  • “Beware of deceptive promises”

Yes, indeed. “Politicians . . . are planting stories in the media touting the number of road projects they promise to do if you vote against the repeal,” the website continues. “Those projects 1) represent only a fraction of the gas tax hike 2) can be 100 percent funded by existing gas tax revenues and 3) are simply promises during a campaign that will likely be broken after election day.”

1) It is true that the projects so far “represent only a fraction of the gas tax.” S.B. 1 is a ten-year program, and it takes many years for projects to be planned, approved, designed, and constructed. More projects, will be coming online in the next decade, if Prop 6 is defeated.

2) No: Existing gas tax revenues are not adequate. See above.

3) S.B. 1 clearly lays out what the money must be spent on; Prop 69 does not allow shifting of revenue.

DeMaio and company will harp on this “don’t trust the government” theme endlessly, and a depressingly large number of people will accept it at face value. Sure, politicians can be slimy, and they can engage in horse-trading, and they can put up a front while doing underhanded things where it’s harder to see them. But is the solution just throwing up our hands and giving up? Refusing to pay for anything?

And finally:

  • “There’s a better way”

Prop 6 proponents plan to introduce yet another initiative to fix the mess they would create be repealing S.B. 1. This “better way” so far includes no money from the gas tax for anything but roads–including none for transit or “other transportation” or, for that matter, Caltrans engineering–some shifting around of vehicle sales tax revenues, “efficiency reforms” which are already part of S.B. 1, and–oh yes–ending the high-speed rail program.

Any “unspent funds” from high-speed rail would be shifted to “other transportation needs.” That will make for some very interesting legal arguments. Most of the money for high-speed rail so far has come from a voter-approved bond–not shiftable–and cap-and-trade funding–revenue which cannot be used to make it easier to drive, so not for highways.

Californians demand a safe, convenient way to get where they need to go, and complain loudly if that system doesn’t operate well for them. Do they really believe they can have it without helping pay for it?

  • Thanks for the kind words.

  • Yep, that’s $91 more over an entire year, or about a quarter a day. Someone can recycle a couple beer cans and at least break even. Air district programs are in the SCAQMD and San Joaquin air district, but I agree that it should be expanded statewide. (It’s under the statewide Enhanced Fleet Modernization Program Plus-Up incentives, so actually, other districts could potentially join.) Public transit increases take some time to go into place and some of the funding did go to prevent service from being cut instead of actually expanding. But expansions are coming, especially now that Prop. 6 failed and agencies can be more certain that the funding stream will be available for longer than just a year.

  • Cyndi Daffrey

    You rock dude. Great post.

  • Kevin Withers

    Referencing a report by the Reason Foundation: California spends $84,005 per mile to maintain its highways, compared to a national average of $28k. It ranks 46th in the quality of its roads.
    Much of the prop 6 support is a protest against that statistic. Something in our system has to change, otherwise unsustainable.

    https://reason.org/wp-content/uploads/2018/01/23rd_annual_highway_report.pdf

  • jake3_14

    No matter how thinly you slice the VLF increase, it’s about $91, using your math. Regarding air district programs, [citation needed]. About reliance on public transit, the biggest benefit for poor people is more public transit, which ain’t happening.

  • Facts would be nice, but they’re unfortunately lacking from this screed. Prop. 6 supporters have been crying about the ballot title the entire time because they’re mad that it’s accurate and actually informs people of the consequence of their actions. Calling it “gas tax repeal” would be both inaccurate and misleading.

    > Gas tax funds currently get moved to other budgets.

    This is nowhere near true at present, especially after the passage of Prop. 69 in June.

    > If the state only used the gas tax for road repair our existing tax would provide more than enough revenue.

    This is blatantly false, but would be an amusing experiment nonetheless.

    > The state insists the 80 billion dollar “bullet” train has funding, but they’re saying there isn’t enough tax revenue for road repair? Maybe cancel the $80 billion train down the Central California valley we can’t afford (and nobody will ride or need).

    Please educate yourself on the plans. The ~$80bn is for the entire first Phase, NOT just the portion in the Central Valley. And literally none of the money that’s going to the HSR project could actually be used for road repair, so cancelling it would do precisely nothing for the roads.

    > $80 billion would fund road repair for decades.

    False. The current maintenance backlog is estimated at over $100bn, so $80bn literally doesn’t even get everything current.

    > Of course this article really has nothing to do with fiscal accountability, it is simply a tactic being used to price people out of their vehicles. A tactic that the rich are fine with because they have no problem paying high gas taxes, the working poor are the ones being hobbled by a high gas tax.

    SB1 is NOT what is “pric[ing] people out of their vehicles”, that culprit would be the current built environment and transportation system. Since the gas tax increase was enacted, the price of gas has gone up around a dollar. Perhaps you can explain why we should be chipper about sending an extra dollar to dictators, terrorists, and tyrants, but a measly $0.12 that actually improves our own country is too much and unacceptable.

  • The state has several programs through some of the air districts to help people in such cars to get newer ones that use less fuel. The VLF fee increase is indexed to vehicle value and the average car’s increase is around a quarter per day. Additionally, a sizable number poor people tend to also be more reliant on transit and/or biking/walking for their transportation needs, all of which benefit from the improvement of infrastructure.

  • > Any “unspent funds” from high-speed rail would be shifted to “other transportation needs.” That will make for some very interesting legal arguments. Most of the money for high-speed rail so far has come from a voter-approved bond–not shiftable–and cap-and-trade funding–revenue which cannot be used to make it easier to drive, so not for highways.

    I’m pretty sure DeMaio is aware that such a plan wouldn’t actually be legal, he’s just trying to create another wedge issue to draw in funding for a(nother losing) campaign.

  • Jim F

    So California’s goal was to save taxpayers money by lowering their DMV fees more than gas taxes raise it? That doesn’t sound like the greedy state that once employed me. The state only increases revenue from taxpayers.

  • Jim F

    The fact that California refused to title the Proposition the gas tax repeal was the original deceptive tactic. Polling shows when voters know Prop 6 removes the gas tax they support it by a large measure.

    Gas tax funds currently get moved to other budgets. If the state only used the gas tax for road repair our existing tax would provide more than enough revenue. I worked in state government and every department goes on a spending spree at the end of the fiscal budget… that way they can claim low funding and ask for a budget increase. That’s how government funding works.

    The state insists the 80 billion dollar “bullet” train has funding, but they’re saying there isn’t enough tax revenue for road repair? Maybe cancel the $80 billion train down the Central California valley we can’t afford (and nobody will ride or need). $80 billion would fund road repair for decades.

    The state does hold projects hostage for revenue. There is a LOT of waste in state budgets that could be trimmed, but if taxpayers try to deny a tax increase the state’s first moves are to lay off public safety, teachers, close parks and not fix roads. Even though there are many wasteful budgets, the first budgets the state shuts down are the ones citizens fear losing most – which is a terror tactic.

    Of course this article really has nothing to do with fiscal accountability, it is simply a tactic being used to price people out of their vehicles. A tactic that the rich are fine with because they have no problem paying high gas taxes, the working poor are the ones being hobbled by a high gas tax.

  • Claude

    All you have to do is get two thirds of all Californians, including the strident “Never from me!” and the always anti-government types. to agree to pay more in taxes and you’re in like Flynn.
    Theoretically, if you could get all tigers to agree to become vegetarians it would make the jungles safer, too. But the odds are only slightly better than getting enough of the anti-tax crowd to accept a tax increase.

  • jake3_14

    Poor people drive older, fuel-inefficient cars. A gas tax and vehicle registration fee increase hits these people the hardest. Taxes should never be regressive.

  • com63

    The gas tax should be higher. Driving should be discouraged as much as possible and the funds raised should be used to create alternatives.

  • Sluggo67

    Not only an editorial, but inaccurate in its own right. For example, the statement “… Prop 6 would make it impossible to ever raise any gas tax in California” is contradicted by the very next sentence that accurately notes future gas tax increases are allowed if approved by the voters. That doesn’t sound ‘impossible’ to me.

  • Matt

    Agree. Although there was an increase in car registration fees as well that Prop 6 would roll back, but that is probably more in the $100-$150 range per car.

  • KJ

    Carl DeMaio’s numbers are way off. For the average California driver who drives 12,000 miles per year in a car that gets 20 mpg, the 12 cent/gallon increase costs $72 more per year or $144 for a two-car family. Not $800-1500. And most newer cars in California get much better mileage than 20 mpg.

  • Kevin Withers

    If you knew nothing, perhaps you are now more informed.

    If you were expecting actual Fact Check, you encountered, dare we say it, “Fake News”.

  • Joe Linton

    I found it really informative. How about if we label your comment “inaccurate.”

  • Kevin Withers

    Fact check? More accurate label would be editorial.

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