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What Happens If California Repeals the Gas Tax? (And What If It Doesn’t?)

By: Bridget Clerkin October 22, 2018
Proposition 6—which addresses California’s “gas tax”—is on the ballot again in the 2018 midterm elections. How will it fare?
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Perhaps the only thing more combustible than gasoline is the subject of taxes. Talk of the government-mandated payments can make nearly any American ignite in an angry tirade or burst into tears.

Yet this November, the volatile mix will join forces on ballots across California—and the results could be really explosive.

The state’s Proposition 6 is one of the most talked-about initiatives in the upcoming election, with “Vote Yes” and “Vote No” signs scattering lawns, windows, and street corners across the area in almost equal measure.

At stake is the recent rise in California’s gas tax rate, which was passed into law through the state legislature last year. A vote for Prop 6 would repeal the new levy, while a vote against the initiative is a vote to keep it in place.

Called the Road Repair and Accountability Act of 2017, the disputed measure, which went into effect earlier this year, hiked up the gas tax by 12 cents, with the additional monies set aside for use on road work projects.

A bulk of the funds are reserved for—and distributed to—local municipalities hoping to initiate such repairs. And much of the money is also funneled toward state-wide transportation improvements, including tweaks to public transit, goods movement, traffic congestion, and state-owned roads, tunnels, and bridges.

Specifically, the capital must be used to bring at least 98% of the state’s highway pavement and 90% of its culverts into “good or fair condition” by the end of 2027, the bill stipulates. It also requires the money be used to fix 500 bridges by that time.

If left in place, the levy has been estimated to reap a windfall of $52.4 billion—or $5.2 billion per year—toward the cause, according to the state Senate Appropriations Committee. And an additional measure passed this summer, Prop 69, further cements those goals, prohibiting the state from siphoning the gas tax funds into its general coffers and restricting their use to transportation projects.

But in a state where residents are already feeling the financial squeeze and a growing number of individuals are reportedly on the edge of homelessness, one more economic burden may be too much for many to bear. At least half a million Californians felt strongly enough against the idea to have it put up for a vote at all.

How the rest of the state’s citizens feel about the measure will be tested by next month’s election—and either side has come up with a number of reasons to back their stance.

“Yes” on 6

The simplest and most immediate reason to vote yes on the repeal is the financial angle.

Money talks—and the additional fees incurred by the tax hike speak volumes to many residents. Some pro-repeal groups have estimated that the levy could cost as much as an extra $779 per year for a family of four.

A "Yes" vote on Proposition 6 would repeal the gas tax, which went into effect after the Road Repair and Accountability Act of 2017.

A “yes” vote would additionally alleviate Californians from other economic stipulations of the Road Repair bill, which also created a new annual fee on zero-emissions vehicles, cranked up the sales tax on diesel fuel by 4%, and initiated an annual transportation improvement fee.

The proposition also moves to put more power directly into the hands of the people, with an appendix that would require voter approval on any future attempts to increase the gas tax.

That all could be appealing for the increasingly put-upon residents of a stupendously expensive state. In a study conducted last year by Harvard University, 600,000 residents of Los Angeles were considered “severely rent burdened”—paying half or more of their monthly income toward rent. An additional 8,000 became homeless for the first time, a 2017 report by the city’s Homeless Services Authority found.

Elsewhere, California is also home to 10 of the nation’s 15 most expensive zip codes—and 8 of the 15 worst cities for renters.

In other words, many Californians are already paying dearly for the so-called “sunshine tax,” and an additional gas levy may add too much fuel to that financial fire.

“No” on 6

While repealing the tax may result in some instant gratification, keeping it in place may offer some long-term benefits.

The bill also looks to the future of the planet, setting aside at least $30 million to invest in green transportation projects. Broadly, gas taxes and other “environmental” levies have been found to increase innovation for low-emissions alternatives and dissuade some drivers from using so much fuel, though such taxes aren’t the only solutions being floated.

A "No" vote on Proposition 6 would allow the gas tax to remain.

The Road Repair bill has already identified a number of needy areas within the state’s failing infrastructure—which sees more vehicle miles traveled than any other region in the country, topping out the next-closest state by at least 100,000 miles.

A number of projects have already been earmarked in the legislation to not only work toward improving those areas but to help maintain them over time, including plans to increase bike and foot traffic; invest more in local light-rail and bus systems; and reduce congestion on the state’s notoriously jammed highways.

Residents could also be expected to save in the long run, some opponents argue, as sleeker streets would lead to fewer personal vehicle repairs over time, including those needed for tires, alignment, shocks, and other areas of a car typically affected by bumps and potholes in the road.

Voting against Prop 6 would keep all of these funding initiatives in place, and, according to opponents of the measure, pave the way for smoother sailing.

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