Capitol Alert

Jerry Brown, Democratic leaders agree to increase taxes to fix California roads

Gov. Jerry Brown and Democratic legislative leaders announced a $5.2 billion road-funding package Wednesday that would raise gas taxes and user fees on motorists, setting off a major political struggle to pass it in the Legislature.

Officials have set an April 6 deadline to approve the package, which would increase fuel taxes and contains a new sliding charge linked to a vehicle’s value. The agreement also includes a constitutional amendment meant to keep lawmakers from shifting transportation revenue to other uses, something that happened frequently in the past.

For the owner of a $30,000 vehicle, who drives 13,000 miles a year at 25 miles per gallon, Wednesday’s package would cost an additional $16.80 a month at full implementation, assuming tax levels in place today.

Likening the condition of the state’s roads to a homeowner’s deteriorating roof, Brown said the state has to act to avoid even worse maintenance and repair problems in the future.

“If you don’t fix the leak, your furniture will be ruined, your rug will be destroyed, the wood will rot. That’s what it’s all about. Step up and take care of business, ” Brown said on the Capitol’s east steps, flanked by Democratic lawmakers and dozens of supporters of the package.

The package poses a major test for Brown and Democratic leaders, as they try to marshal members of the Legislature’s recently enlarged Democratic supermajorities to push through large tax increases that pose significant political – potentially career-ending – risks for some.

Brown acknowledged that “failure is always an option.”

“Look, we’ve got work to do. Nothing is assured here, nothing is in the bag,” Brown said. “I think people know this is something good, this is something necessary. So I think we have a very good chance.”

Senate President Pro Tem Kevin de León, D-Los Angeles, said he is still speaking to members of his caucus about the package. Multiple Assembly Democrats were missing from Wednesday’s crowd, and some face the prospect of tough re-election campaigns next year.

“I’m telling them this is the best we’re going to get,” said Assemblyman Jim Frazier, D-Oakley, the chairman of the Assembly Transportation Committee, who helped negotiate the package. “I don’t see it ever happening again in the next decade. This took a lot of time and effort by a lot of people, and (given) the attention span of the Legislature, they’ll move on to the next issue area.”

The package would mark the largest potential overhaul of transportation funding in California in more than 25 years. The state’s base gas tax would rise for the first time since 1994.

Most of the $5.2 billion raised annually would go to pay for state and local road maintenance and repairs. Public transit and goods-movement projects also would receive several hundred million dollars. Other money would go to pay for new roads and other expansion projects.

The pact’s announcement will launch days of intense lobbying from supporters as well as critics of the plan. Business, labor and local government members of the Fix Our Roads Coalition, which has been holding rallies around the state in recent weeks, is stepping up those efforts with social media campaigns. The influential California Chamber of Commerce announced its support for the proposal Wednesday.

Republicans were all but excluded from the negotiations, their leaders say, and lawmakers quickly attacked Wednesday’s proposal, signaling that they will be doing more to oppose it than making speeches in floor and committee debates.

As proponents began to speak Wednesday, Assembly Republicans released social media ads tailored to different parts of the state, accusing Democrats of wasting existing road money while now seeking to raise the tax load on motorists who already pay a lot at the pump.

“We feel like it’s our responsibility to fight for hardworking Californians,” said Assembly GOP Leader Chad Mayes, R-Yucca Valley, adding that he has heard from multiple Democratic lawmakers leery of voting for higher taxes and fees.

“Back in their districts, they’ve polled on this, and they know their districts don’t want to see increased taxes and fees,” he said. “I think it’s going to be difficult for them to get (the two-thirds vote).”

The package would raise gas and diesel excise taxes. For the gas tax, the base excise tax of 18 cents – the amount it’s been since 1994 – would increase to 30 cents on Nov. 1. Administration officials said that amount reflects what the 1994 rate would be now if it had been adjusted for inflation.

In addition, the plan would set the variable gas excise tax at 17.3 cents a gallon starting July 1, 2019, and adjust it for inflation. The current variable rate is 9.8 cents, a rate set to increase to 11.7 cents July 1. Without any change, state officials expect the July 1, 2018, rate to be about 16 cents a gallon.

Also, the package would create several tiers of “transportation improvement” charges linked to vehicle values beginning on Jan. 1, 2018. Those with vehicles worth up to $4,999 would pay $25, for example, while those with a vehicle worth $60,000 and up would pay $175.

Frazier, whose bill proposes a flat $38 registration fee increase, said almost one-half of drivers have vehicles that would put them in the lowest tier.

Supporters say a lack of money has left the state short an estimated $3.5 billion in annual maintenance and repair needs, adding to a $12 billion backlog, the nonpartisan Legislative Analyst’s Office said. Counties and cities have tallied a $40 billion backlog for local roads.

This winter’s rains caused $700 million in damage to roads, culverts and bridges, officials said last week.

“Californians are sick and tired of driving on bad roads, and we are all paying the cost of disrepair, traffic congestion and unsafe roads, bridges and other transportation infrastructure,” Carolyn Coleman, executive director of the League of California Cities, said in a statement.

The package will be the first major legislative endeavor since voters approved Proposition 54 in November. That ballot measure requires bills to be in print for 72 hours before final votes.

Changes are not going to happen before Thursday, Frazier said. “The negotiating period is over. Now’s the time when the rubber hits the road,” he said.

Alexei Koseff of The Bee Capitol Bureau contributed to this report.

How much would your costs increase?

Enter the number of miles you drive annually, your vehicle’s mpg and value to see how much you would pay per month, on average, under the road-funding package unveiled Wednesday at full implementation, compared to current law estimates.

Note: Applies to gas-powered vehicles. Use numbers only.

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