This proposal represents, for the first time, a unified effort by the Assembly and Senate Democratic Caucuses to address the $78 billion unmet funding need for local streets and roads and $56 billion backlog to the state’s transportation infrastructure.
The legislators project that their proposal would generate a total of $7.4 billion annually, with $2.5 billion going directly to cities and counties for desperately needed local street and road maintenance and rehabilitation. It includes significant funding increases for freight, transit, active transportation, maintenance and rehabilitation of both the state highway system and local streets and roads. In addition, it includes $200 million annually to reward local jurisdictions that have enacted local transportation funding measures.
The plan would also stabilize the variable gas tax which has caused significant uncertainty in gas tax revenues in recent years and caused a $534 million reduction in the State Transportation Improvement Program (STIP) this year.
On reforms, the plan restores independence to the California Transportation Commission (CTC), creates the Office of Transportation Inspector General to oversee state transportation spending, includes local reporting requirements, permanently extends the CEQA exemption for transportation projects in existing roadways, and creates an Advanced Mitigation program for transportation projects.
The proposal will also include two constitutional amendments to dedicate the new funds for transportation purposes only and reduce the voter threshold for local transportation measures to 55 percent.
The plan proposes to generate the revenue through:
- A 17 cent per gallon increase to the gasoline excise tax;
- Resetting the price based excise tax (variable gas tax) on gasoline to 17.3 cents;
- A 30 cent per gallon increase to the diesel excise tax;
- A 3.5 percent increase to the diesel sales tax;
- A $38 per year increase to the vehicle registration fee;
- $1 billion from gradually returning truck weight fees over five years;
- $300 million from unallocated cap and trade funds; and
- Indexing all fees and taxes, including current gas taxes, for inflation every three years.
The League is preparing a more comprehensive analysis of the proposal to be distributed in the next few days. The analysis will include preliminary estimates of the revenues that cities could receive under the proposal.