ELECTION 2018: California voters to decide whether to repeal new vehicle taxes and fees

By Keith Goble, Land Line state legislative editor | Friday, October 12, 2018

Voters in California next month will get the final word on whether they want to keep vehicle tax and fee increases imposed a year ago.

Proposition 6 is an initiated constitutional amendment that began last fall as a petition drive to obtain signatures from California residents to get the question added to the Nov. 6 ballot.

The initiative followed enactment of Senate Bill 1. The 10-year, $52 billion transportation funding deal signed into law by Gov. Jerry Brown is designed to benefit state and local roads, trade corridors and public transit.

On Nov. 1, 2017, the diesel tax increased by 20 cents and the gas tax increased by 12 cents. Other vehicle fees in the deal went up Jan. 1, including an increase from 9 percent to 13 percent in sales tax applied to diesel purchases.

The additional taxes and fees do not end there. Another 7.5-cent gas tax increase is scheduled to occur in July 2019.

All tax and fee rates are also indexed to inflation to allow for increases in future years.

Transportation funding in California is estimated to total $35 billion. State sources, which largely come via state fuel and vehicle taxes, total $12 billion.

The new transportation revenue collected via the diesel excise tax is split for road maintenance and trade corridors. New revenue from the diesel sales tax is routed for transit purposes.

Prop. 6 proponents say nearly three-quarters of all state motor vehicle related taxes and fees collected by the state are used for programs other than streets, roads and highways.

Proponents add that the tax and fee increases put too much of a strain on lower- and middle-class residents. The Republican-led group adds that past fuel tax revenues have gone for other programs – a trend they expect to continue.

Opponents, led by Democratic Gov. Brown, say the tax and fee increases are necessary to address a $130 billion backlog in deferred road maintenance. They add that Proposition 69 approved by voters in June prevents politicians from raiding transportation funds.

Passage of the citizen vote would also amend the state’s constitution to prevent any new or increased taxes on gas or diesel and sales taxes, vehicles license fees, and transportation improvement fees without a statewide vote.

 

 

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