Locks gas and infrastructure tax revenue into purposes for which intended
Proposition 69, on the June ballot, requires that revenue raised from Senate Bill 1 (2017) be spent on transportation-related purposes. It puts legislatively approved gas and transportation tax revenues into a “lockbox,” restricting use to the purposes for which intended.
Specifically, SB 1, the Road Repair and Accountability Act, enacted an estimated $5.2-billion-a-year increase in transportation-related taxes and fees — 12 cents per gallon increase of gasoline excise tax, 20 cents/gallon increase of diesel excise tax, 4-percent increase of the diesel sales tax, an annual $25 to $100 Transportation Improvement Fee and an annual $100 zero-emission vehicles fee.
If approved by voters, Prop 69 would require revenue from SB 1 diesel sales tax and Transportation Improvement Fee be deposited into the existing Public Transportation Account to fund mass transportation and rail systems. Also, the measure would require TIF revenue be spent on public streets and highways, and public transportation systems.
Furthermore, the measure exempts revenue from SB 1 tax increases and fee schedules from the state’s appropriation limit. (The Gann Limit prohibits state and local governments from spending more than a per-person/per-fiscal-year limit, which was enacted in fiscal year 1978-79 and modified in 1988 and 1990.)
On its face, Prop 69 appears relatively straightforward — locking transportation tax revenues into a fund that guarantees they be spent on transportation infrastructure. The measure prohibits the Legislature from diverting those funds to other purposes and prohibits revenue from new vehicle license fees from being used to repay general obligation bond debt.
The non-partisan Legislative Analyst’s Office notes Prop 69 has “no direct effect” on the amount of state and local revenues or costs since the measure does not change existing tax and fee rates. Passage would affect how certain tax revenues are spent by ensuring they be spent on the purposes for which enacted. And the measure would put the state “a little further below its constitutional spending limit.”
The measure is offered as a constitutional amendment to Section 15 Article XIII B and Section 1 of Article XIX A.
Editorial support throughout the state is generally in support, with no significant media opposition. The Los Angeles Times notes, “Voters should hold lawmakers to their word and pass [Prop. 69];” the Sacramento Bee opines, “While most transportation revenue is already constitutionally earmarked, some of the new funding falls outside those protections, so this is just common sense cleanup, endorsed by a long list of good government groups;” the San Francisco Chronicle observes, “If that reassurance [of Prop 69 fund restrictions] seems unnecessary, it’s because anti-tax opponents are readying a repeal of the gas tax, claiming the funds may be diverted or misspent … California is at last tending to its highways, and this measure underlines that promise;” and the Mercury News questions,” Whether you are for or against the tax and fee increases, wouldn’t you rather see the money go to transportation than the state general fund and politicians’ pet projects?”
Prop 69 is supported by the state Democratic Party, and numerous state organizations, including the California Association of Highway Patrolmen, the California Chamber of Commerce, Congress of California Seniors, League of Women Voters of California, League of California Cities and the California State Association of Counties.
Top donors include the League of California Cities, the California County Supervisors Association, and the State Building and Construction Trades Council of California.
Official opposition is limited. Opponents note the measure is not intended to only fix roads but to also address “high speed rails, bike lanes, and fixing habitat” (Assemblyman Frank Bigelow, AD 5). Bigelow also writes, “Proposition 69 fails to protect all transportation dollars. Sacramento will collect $1 billion annually in vehicle weight fees, which go unprotected and backfill the State General Fund.”
State Senate Minority Leader Patricia Bates (R-36) offers, “It didn’t have to be this way. Senate Republicans put forth our own transportation plan that would have provided $7.8 billion for our crumbling roads without raising taxes. Instead, drivers will be paying more to fund not just road repairs that could have been paid for with existing dollars, but also other projects such as bike trails and potentially high-speed rail. Californians deserve better.”