Think July 1 Gas Tax Increase Will Fund Better Roads? Think Again.

Think July 1 Gas Tax Increase Will Fund Better Roads? Think Again.

On July 1, three days before we celebrate our American freedom, and while we’re still feeling the effects of a three-month loss of that liberty, the state tax on gasoline will increase by 3.2 cents per gallon. It should be enough to ensure California keeps its position as the state with the most oppressive motor fuel tax regime in the country.

Some lawmakers have suggested freezing the tax, so Californians hit hard by the pandemic lockdown won’t be further burdened. It would be an unlikely turn of events, though. A political leadership that refuses to temporarily suspend Assembly Bill 5 – which outlawed much of the freelance and independent contract work in the state, and has wrecked family and personal finances from Imperial County to Del Norte County – and is also determined to find $20 million in a budget that’s $54.3 billion in the hole to enforce the law, isn’t interested in cutting any breaks.

After all, the revenue from the fuel tax needs to be put to work repairing the state’s crumbling roads, and highways, and bridges. Officials are expecting the extra tax to generate “an additional $440 million to state coffers in the coming fiscal year,” says the Los Angeles Times.

The state began collecting higher motor fuel taxes on July 1, 2017, to raise $52 billion over 10 years to patch up the transportation infrastructure. Naturally, many of the dollars have been diverted to other projects. Last year, we reported that less than two years in, officials had “already siphoned off part of the additional $1.2 billion in revenue generated by the tax hike in 2018, sending it off to the California Department of Food and Agriculture, the state Department of Parks and Recreation, the General Fund, and local law enforcement.”

This March, we noted that Gov. Gavin Newsom had issued an executive order “which obligates the state transportation agency to leverage the more than $5 billion in annual state transportation spending for construction, operations and maintenance to help reverse the trend of increased fuel consumption and reduce greenhouse gas emissions associated with the transportation sector.” Jim Patterson, a Republican assemblyman from Fresno, called it “theft of our gas taxes by executive order,” and predicted it was “a glimpse into the future of transportation in our state,” in which promised repairs are never made but green projects are given priority and privilege.

So where are we now, approaching the third anniversary of the fuel tax hike established by 2017’s Senate Bill 1?

In the Reason Foundation’s most recent highway report, released last August, California was 45th in rural interstate pavement condition, 47th in urban interstate pavement condition, 35th in rural arterial pavement condition, and 49th in urban arterial pavement condition. The state is ranked 19th in structurally deficient bridges.

California has been mired near the bottom of Reason’s rankings for years. Baruch Feigenbaum, one of the scholars who compiled the report, says, bluntly, “there has been no significant improvement in California roadways” in recent years.

“It might take several years for California’s pavement to improve,” Feigenbaum told PRI this week, “but given that California has a history of wasteful spending, and the state hasn’t made any noticeable changes in its administrative structure, I worry that this additional spending will do very little to improve highway quality.”

Remember that when filling up on July 1.

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.