With votes scheduled for Thursday, Republicans have ramped up their criticism of a $5.2 billion road-funding agreement between Gov. Jerry Brown and Democratic legislative leaders.
The package’s billions of dollars in higher taxes and fees, goes a main line of attack, wouldn’t be necessary if lawmakers in the past hadn’t taken transportation money to help pay for unrelated programs.
“We can fix our roads and bridges by simply ensuring that the billions of dollars that drivers are already paying in transportation fees and taxes are actually used for transportation purposes, rather than being swept into the state’s general fund,” read a joint statement from Assembly and state Senate Republicans after the plan’s release. Online ads have made similar claims.
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The allegation is misleading. It’s true that California governors and lawmakers – of both parties – borrowed heavily from transportation-related accounts after the dot-com bust and during the recession. But the amount of borrowing never amounted to the $5.2 billion a year this package would produce. And most of the money has been paid back. The rest would be paid back in three years if the package is approved.
Republicans also say the state could produce that kind of money if the sales tax on car sales went strictly to transportation. But that money has never been earmarked for road projects in California. Under that logic, the sales tax on shoe sales would pay for sidewalks.
Still, even as state revenue has soared, the Brown administration and Democratic lawmakers continue to employ a recession-era budget maneuver that taps transportation dollars to pay off voter-approved transportation bonds. The general fund – which funds schools, social services and other functions of state government – typically also makes debt payments on school, water and other types of borrowing. By using money earmarked for transportation to pay for transportation bonds, the general fund is saving about $1 billion a year that can be used for other things.
Senate Bill 1 emerged last Thursday, the product of months of negotiations between Brown and legislative Democrats. Its provisions would increase gas and diesel excise taxes, create a fee linked to vehicle value, and impose a new fee on electric vehicles.
The measure also would repay, over three years, $706 million in transportation loans dating back to the 2002-03 budget year. Officials say that would close the books on some 15 years of borrowing from transportation accounts to prevent cuts to other programs.
State revenue soared in the late 1990s and early 2000s, prompting lawmakers to create the multibillion dollar Traffic Congestion Relief Program. Revenue, though, soon began to sag, and lawmakers borrowed more than $1 billion from the fund for the 2002-03 budget.
The tab continued to grow over subsequent budgets: Lawmakers suspended a rule requiring that the sales tax on gas go to transportation. When gas prices were high, they swept up some of the hundreds of millions of dollars in “spillover” revenue that otherwise would have gone to public transit.
Lawmakers got creative to try to pay the money back. In the mid-2000’s, then-Gov. Arnold Schwarzenegger and lawmakers approved tribal casino-expansions deals, with some of the tribes’ revenue-sharing payments to the state directed to pay off the road debt.
After the recession hit, lawmakers approved a series of complex fuel tax swaps, with the goal of providing relief for the general fund. In 2011, they overwhelmingly approved Assembly Bill 105, which directed truck weight fee revenue to pay debt service on Proposition 1B, the $19.9 billion transportation bond passed in November 2006.
In the current fiscal year, the budget directs $1 billion in weight fees revenue to help pay for $1.5 billion in Proposition 1B debt service. That would continue under the latest legislation.