Gas Tax Repeal
Eliminates Road Repair and Transportation Funding
Repeals Senate Bill 1, the state transportation funding bill (commonly referred to as the “gas tax”), and requires voter approval for any future imposition, extension or increase in gas and car taxes.
What the Measure Would Do
California Proposition 6 would repeal Senate Bill 1, the 2017 transportation funding bill that raised gas taxes in order to pay for road repairs and transportation improvements. If this measure passes, SB 1’s $5 billion per year funding would cease at the end of the current fiscal year. Projects that haven’t yet begun construction would have to be canceled, scaled down or delayed indefinitely. Prop. 6 would also require voter approval for any future imposition, extension or increase in gas and vehicle taxes. This means that not only would Prop. 6 eliminate funding for critical projects, it would make it dramatically more difficult to enact fuel and vehicle-related taxes, potentially resulting in less revenue for transportation infrastructure in the future. Some have called it the Prop. 13 of California transportation.
After nearly two years of debate, the California State Legislature passed SB 1 in April of 2017. SB 1 raised the gas tax by 12 cents per gallon, raised the diesel fuel tax by 20 cents per gallon, added a $100 “road improvement fee” for zero-emission vehicles and raised annual registration fees on other vehicles by $25 to $175 depending on a vehicle’s value. The gas taxes went into effect on November 1, 2017, and the registration fees on January 1, 2018; the fee for zero-emission vehicles and other vehicles will go into effect in July 2020.
SB 1 raises $5.2 billion annually in perpetuity. The bill pegs its funding sources to the Consumer Price Index, which means its taxes and fees won’t lose value every year. The vast majority of the funds — $3.7 billion — are devoted to roadway maintenance and some “complete streets” improvements that will support active transportation projects. Public transit receives $750 million of the annual total, and bicycle and pedestrian projects are also eligible for funding. So far, 6,000 projects throughout the state have received SB 1 funds.
Over the next 10 years, SB 1 is projected to provide more than $3.5 billion in funding to cities and counties in the Bay Area. The BART extension to downtown San Jose, new hybrid diesel-electric buses for AC Transit, express bus routes along Highway 101 and a fare discount for low-income transit riders are all examples of projects at risk of being defunded if Prop. 6 passes and SB 1 is repealed.
Those opposed to SB 1 argue that the taxes and fees create hardships for working-class families and are unnecessary. Some opponents contend that the money raised could be diverted away from road repairs to non-transportation-related projects. However, in June 2018, California voters passed a constitutional amendment requiring SB 1 money — and all other fuel taxes — to be spent on transportation.
The repeal effort began within days after SB 1 passed the state legislature. Prop. 6 was proposed by members of California’s Republican congressional delegation and by Republican gubernatorial candidate John Cox. Reportedly, the state Republican Party and the national Republican Party see Prop. 6 as a means to turn out Republican voters in the November election and limit Democratic efforts to gain congressional seats.
Governor Jerry Brown, the California Chamber of Commerce, California Professional Firefighters, the California Association of Highway Patrolmen, the League of Women Voters of California, the League of California Cities, cities, labor unions, environmental groups and many others oppose Prop. 6.
This state constitutional amendment needs a simple majority (50 percent plus one vote) to pass.
• If SB 1 is repealed, Californians would pay lower taxes and fewer fees. A family of four could expect to save more than $500 a year.
• SB 1 was a monumental win for California and the Bay Area. The repeal would threaten road improvement and maintenance projects throughout the state. The Bay Area alone stands to lose $3.6 billion should Prop. 6 pass.
• Two decades without a gas tax increase has created a $130 billion backlog in necessary repairs and improvements. Repealing SB 1 would bring a halt to much-needed repairs to our crumbling roads and aging bridges.
• SB 1 gives cities a reliable funding stream for road maintenance. Repealing SB 1 would force cities once again to focus local and regional funding measures on shoring up existing roads and transit instead of building a world-class regional transportation system.
• SB 1 will support nearly $183 billion in increased economic activity and benefits for California residents. Prop. 6 would eliminate more than 68,000 well-paying jobs fixing our roads that otherwise would be created over the next decade. Nearly every aspect of the California economy relies on having usable roads.
• Requiring the legislature to obtain voter approval of new or increased vehicle-related taxes and fees would make it harder to raise revenues for transportation infrastructure than it’s ever been. The impact on California’s roads and transit services would be broad and long-lasting.
SPUR has long advocated for a stable source of funding for transportation improvements, and we support funding transportation with transportation-related user fees. SB 1 achieved both of these aims. It was the culmination of years of compromise and dialogue among hundreds of different interests; it’s a solution at the scale of thinking that actually solves problems. The state’s roads and transit systems need to be in good shape to support the world’s fifth-largest economy, control greenhouse gas emissions and maintain quality of life. SB 1 is an overdue investment in transportation. If Prop. 6 passes, there would be no other source of revenue on the horizon. Much like the effect of 1978’s Prop. 13, the detrimental impacts of Prop. 6 could last for decades.