One can’t feel much but sticker shock when pulling in to buy gas. The station near my house is selling gas for $3.78, while even the bargain independent, which often has lines four or five cars deep, has priced its regular octane gasoline well above $3.50. High energy bills are taking a significant bite out of the budget of ordinary San Diegans and significantly impacting household budgets throughout the county.
There is one small silver lining in this otherwise disastrous rise in prices. In 2002 (Proposition 42) and 2006 (Proposition 1A) California voters overwhelmingly passed initiatives that dedicated the sales tax which is collected on gasoline to transportation improvements. The recent spike in gas prices has meant that this account has swelled, on pace this year to grow to nearly $5 billion.
Transportation could surely use the money. A recent report by the National Surface Transportation and Revenue Commission said that the nation needed to annually invest more than $150 billion to keep pace with increased population and to maintain the nation’s highway system. In San Diego, the San Diego Association of Governments believes that there is a $20+ billion gap between now and 2030 that the region ideally should invest in spending on transportation infrastructure and what it reasonably can afford. With the cost of concrete, asphalt and steel spiking to unprecedented levels, the extra revenues from the sales tax can help benefit San Diego commuters who, on average, waste an estimated 45 hours each year stuck in traffic.
But it would be too much to hope that elected officials in Sacramento respect the will of the public and actually fulfill the demands of our state’s voters. Even though 69% of voters approved Proposition 42 and 77% supported Proposition 1A, last week the San Francisco Chronicle reported that Sacramento is covetously looking at those revenues to avoid having to make hard choices. Proposition 1A does require that Sacramento repay any “loans” from the transportation fund and can only do this twice in a ten year period. Experience has shown, unfortunately, that too often Sacramento finds ways of turning today’s “loans” into tomorrow’s “grants” and we worry that given the structural nature of the fiscal crisis in Sacramento there will be strong pressure to try to go back to the voters and tear up the IOUs. It would be far more preferable to leave the lock-box unopened and find other solutions to the state’s budget crisis.
Closer to home, this “solution” to Sacramento’s problems would have dramatic and dire consequences for San Diego. If revenues continue to flow in at the rate that they have and San Diego receives its traditional share, it could mean over $500 million in additional dollars to rehabilitate roads, highways, and add new transportation capacity. To put that in perspective, the cost of adding 2 lanes on Highway 76 is estimated to be $500 million. The cost of adding 4 “managed lanes” on 805 from Palomar Street in Chula Vista to Highway 94 is pegged at $884 million. Reducing congestion by investing these revenues could take a little of the sting out of the price spike at the pump.
But the consequences of trying to raid the lock box on these transportation funds go beyond delaying projects. Such action would also, we think, do significant harm to any vestiges of trust in state government that remain among Californians. In the official voter pamphlet for Proposition 1A, voters were told that a vote for the measure would “close the loopholes in the law that ensure that the gas taxes you already pay are spent only on transportation projects.” If budget writers move forward to raid the funds, citizens would be justified in their already low opinion of politics and policy making in the Golden State.
Governor Schwarzenegger deserves credit for not suggesting this low scheme. His January budget respected the commitments made by Propositions 42 and 1A. However, all indications are that the state’s fiscal situation is worsening in June and interest groups throughout the state are marshalling forces to oppose making hard choices. For those that value transportation infrastructure and believe that promises made to voters should be kept, it is critical to pay attention to the shenanigans in Sacramento and tell legislators to not treat the gasoline sales tax revenue as a windfall.
Reader Feedback
Chuck Flacks Says:
I cannot quibble with Erik or the voters' will; however, I must argue with the idea that we are paying too much to fill up. Driving a car causes tremendous harm to the environment and has real costs to society in terms of infrastructure, safety, law enforcement, and the health impacts on others. Virtually none of these costs (externalities) are ever factored into the costs of driving. While the two laws Mr. Bruvold mentions get at the infrastructure issue to a point, driving is not sufficiently expensive enough to force us to get out of our cars and support a mass transit system like they do in Europe and Japan. In other words, one possible solution to the fiscal issues he raises is to create ADDITIONAL taxes to offset the external costs we are incurring by driving, but not paying for. I'm SURE that this will be a popular idea (LOL).
April 11, 2008 at 12:04 PM
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I cannot quibble with Erik or the voters' will; however, I must argue with the idea that we are paying too much to fill up. Driving a car causes tremendous harm to the environment and has real costs to society in terms of infrastructure, safety, law enforcement, and the health impacts on others. Virtually none of these costs (externalities) are ever factored into the costs of driving. While the two laws Mr. Bruvold mentions get at the infrastructure issue to a point, driving is not sufficiently expensive enough to force us to get out of our cars and support a mass transit system like they do in Europe and Japan. In other words, one possible solution to the fiscal issues he raises is to create ADDITIONAL taxes to offset the external costs we are incurring by driving, but not paying for. I'm SURE that this will be a popular idea (LOL).