How We Can Fund California’s Roads if Proposition 6 Passes

How We Can Fund California’s Roads if Proposition 6 Passes

Next week, Californians will vote on Proposition 6, which, if approved, would kill last year’s $52 billion fuel tax hike. Opponents are telling us we will doom ourselves if repeal the tax hike. How, they ask, will the state repair its miserable roads without that money?

California’s transportation infrastructure is clearly a mess. TRIP, a nonprofit transportation research group, tells in its most recent report just how miserable our streets are. The worst roads and highways in large urban areas, defined by those with more than 500,000 population, are found in California. San Francisco-Oakland is at the bottom, with 71 percent of its major transportation arteries rated as “poor.” San Jose has the second-worst rating, with 64 percent of its roads falling into the poor category. Third worst is Los Angeles, where 57 percent of the streets are poor.

There are six California cities among the worst 20 in the large urban classification. Sacramento is 12th, with 41 percent of its streets ranked as poor, Riverside-San Bernardino is 13th (40 percent), and Fresno 16th (40 percent).

California’s mid-size urban areas are also plagued by failing infrastructure. Nine Golden State cities are ranked among TRIP’s bottom 20.

This didn’t happen on the eve of the Legislature passing, and Gov. Jerry Brown signing, Senate Bill 1, which raised gasoline taxes by 12 cents a gallon and diesel by 36 (and created the second-most expensive motor fuel tax regime in the country). California roads arrived at this sorry destination after decades of neglect by policymakers who focused on other spending priorities and largely ignored what is a core duty of elected officials.

Infrastructure repair and construction should be paid for by fuel taxes and vehicle fees. Revenue from fuel taxes should not be diverted to other government programs. Transportation fuel taxes and vehicle fees should be the cost we pay for driving on decent roads. If not, these levies are simply another way for politicians to force taxpayers to fund an array of government projects that never shrink even when they’ve outlived their usefulness, or were never even useful in the first place.

Since 1990, drivers have generated nearly $88 billion in motor fuel tax revenue, according to state budget data, and an additional $129 billion in vehicle fees. It’s reasonable to think that with that much money pouring into the state fisc, the roads would not be in the shabby shape they’re in. Yet they are. Why?

One, not all those funds have been used to repair the torn-up roads and increase capacity to relieve traffic pressure. Transportation fuel tax revenue is routinely diverted to public transportation (into which lawmakers are trying to herd us like cattle), bike paths, rail projects, and other expenditures that have at best a tenuous connection to our roads and too often none. Of the $16 billion generated by transportation fuel taxes and vehicle fees in fiscal 2018, the first year the tax hike was in effect, $1.2 billion, or 7 percent, was funneled to the Department of Food and Agriculture, the Department of Parks and Recreation, the general fund, and local law enforcement.

Rather than divert funds away from transportation accounts, lawmakers should instead reroute general fund dollars from transportation-related levies, such as the vehicle sales tax, which produces about $3 billion a year in revenue, to road work. The cap-and-trade program, which taxes greenhouse gas emissions and receives a significant part of its revenue from transportation fuel suppliers, should also be a substantial source of funds.

Two, it costs far too much to build and repair roads in California. Only seven states spend more per mile on state-controlled roads, according to the Reason Foundation’s most recent highway report. The $471,052 spent per mile in California is more than 2.5 times the national average of $178,116. This cost difference is due to several factors, many of which, such as expensive environmental reviews, are under the charge of lawmakers. Pro-union contracts can add as much as 25 percent to the price of highway construction.

Another factor is a bloated state transportation agency. A 2015 audit of Caltrans found that it had 3,500 redundant positions. Republican Sen. John Moorlach of Orange County suggested at the time that the jobs be cut and the money saved — $500 million, he said — spent on road repair.

Carl DeMaio, chairman of the repeal effort and a former San Diego city councilman, believes that California’s road problems could be resolved if the state simply allocated 100 percent of fuel tax revenues for repairs. Unfortunately, that’s not likely to ever happen. Consequently, the cost of driving will keep going up (there’s another fuel tax hike on its way), and the roads will improve only at the margins. This should not be the price Californians have to pay to live in this state.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.