We Can't Swap Our Way to Fixing Potholes
Whether you are driving down I-5 or cruising along the Pacific Coast Highway, we can all agree on one thing: we need a major overhaul of our roads here in California. And yet, gas taxes — which fund a large portion of California’s infrastructure projects — will be going down this year. Why are gas taxes going down when our $50 Billion backlog of transportation needs gets more expensive every single day?
That question gets to the heart of people’s frustrations about transportation in California: the system we use to fund infrastructure and mass transit is as clear as mud. Prior to 2010, it was relatively straightforward: we paid 18 cents for every gallon of gas we bought, and the money went directly to road repairs and public transit. We had a system that was easy to understand and easy to plan around.
It wasn’t the best system, in all fairness. Funds were tied to the volume of gas sold in California, so the otherwise wonderful trend towards highly fuel-efficient and electric cars means we were already collecting less in gas tax from year to year, even though more cars were on the road. On top of that, the 18 cent rate has stayed the same for 25 years so the purchasing power has declined by over 40 percent.
In 2010 we switched to our current funding system — the so called “fuel tax swap.” We made this change because of the budget crisis that year, not because we believed it was the best way to fund our roads and public transit. Look no further than Ventura County right now, where voters are being asked to consider a sales tax hike to fund transportation projects. This proposal is just the latest in a series of debates playing out in communities across the state, and it shows clearly why we need to reform how we fund our transportation needs in California.
My colleagues and I on the Board of Equalization see this every year when we are required to consider fuel taxes. State law is very clear: gas taxes are tied to a formula set in statute, and the BOE is responsible for ratifying the numbers produced by that formula. The present system makes little sense. It’s clear that this formula isn’t getting the job done and the declining revenue from the gas tax will not be the solution to California’s transportation needs.
I support the efforts of those communities that are exploring alternatives, like the measure being put before Ventura County voters to become a “self-help” county and raise sales tax by half a cent to fund transportation projects. Our roads, bridges and public transit systems are the lifeblood of our economy, and we need to invest in them.
But local action will only achieve so much. We need a comprehensive, statewide effort. We need our policy makers to be innovative and thoughtful in transforming an infrastructure system that was designed to support a manufacturing economy of 20 million people into one that can sustain a service/innovation economy for 40 million people.
That debate will be complicated and messy — and that’s a good thing. Our roads, bridges and public transit systems are important. We’ve put this conversation off for far too long, and one thing is absolutely clear: the potholes aren’t getting filled with the Fuel Tax Swap.