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Sacramento Bee Columnist Daniel Weintraub

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April 26, 2006

Fixing what ain't broke

The folks collecting signatures to permanently dedicate the sales tax on gasoline to transportation projects report that they have reached their goal and plan to submit the signatures to the counties on May 2.

This is the so-called Proposition 42 "fix," which presumes that something in Prop. 42 is broken. The problem, as these people see it, is that in bad economic years, the governor and the Legislature have the ability, by a two-thirds vote, to use the sales tax on gas for schools or health care for poor kids or food for old people instead of building roads. In this way, Prop. 42 serves as a kind of budget reserve. In good economic years, transportation construction has first call on the money. In bad years it goes for human services that would otherwise have to be cut. Seems like a pretty good deal. But after the "fix," that will no longer be an option. The money will go to the transportation fund even if a drop in general fund revenues forces cuts in essential services.

If this does get on the ballot, the voters will probably approve it, because they think this is the same as the gasoline excise tax, which was adopted as a special tax and has always been dedicated to transportation. They don't realize that we are talking here about a piece of the sales tax which for decades before 2002 was part of the general fund, just like most of the sales tax money collected each year goes to the general fund. It doesn't get much mention, but the $1.4 billion or so that this measure represents accounts for about one-fourth or more of the state's ongoing structural budget deficit. It used to go to general fund programs. Suddenly it was dedicated to transportation. But nobody ever identified the health and education and human service programs that were supposed to be cut to free up the money that was shifted to roads.