Gas taxes may be the most practical way to raise money for transportation, but they can also be politically perilous. That's why transportation advocates are closely watching four statewide ballot measures this November that would affect fuel taxes or transportation funding.
The questions that voters in California, Colorado, Missouri and Utah face are all the more contentious because they deal directly with issues that have stymied lawmakers for months, and in most cases, years.
It is unusual to see as many statewide ballot measures on transportation funding; local measures are much more common. But these four statewide transportation questions could be in reaction to a growing willingness by state lawmakers to raise taxes or find other sources of new money to improve roads and other infrastructure. Over the last six years, 31 states have increased revenues for transportation, according to Joung Lee, the policy director for the American Association of State Highway and Transportation Officials.
Putting transportation funding questions to voters can be risky, at least for advocates hoping for more infrastructure money. Voters tend to respond viscerally to gas tax increases because it's easier for them to calculate how much more they'd be paying compared to, say, changes to property tax levies or income tax rates. That's because the federal government and most states use simple per-gallon taxes for motor fuels.
Both Democratic and Republican voters have rallied against gas tax hikes in the past. Four years ago, for example, voters in overwhelmingly Democratic Massachusetts opted to scale back a newly passed gas tax increase so that its rate would no longer adjust with inflation.
Republicans are using a strategy similar to the one in Massachusetts four years ago to make headway this year in another seemingly Democratic stronghold: California.
The three top Republicans in the U.S. House have all contributed to efforts to pass Proposition 6, which would repeal a gas tax hike that is paying for a $54 billion package to build and repair infrastructure. Only one of them -- U.S. Rep. Kevin McCarthy -- is from California.
Republican gubernatorial candidate John Cox, who faces an uphill battle against Democratic nominee Gavin Newsom, has made the gas tax repeal a centerpiece of his campaign. “This gas tax is just one element of how the politicians are doing the bidding of the donors and the special interests, and are ignoring the needs of working Californians,” he told reporters at the state Capitol, shortly after securing a spot in the November election.
Jerry Brown, the current Democratic governor who is wrapping up his fourth term in the office, pushed hard for the 2017 transportation package that included the 12-cent gas tax hike. Brown personally lobbied lawmakers and cut deals to get the legislation to his desk, and, in the process, scored a major win on an issue that transportation advocates had been spinning their wheels on for nearly three decades.
But this year's ballot measure could upend that law.
Carl DeMaio, a talk radio host and former San Diego city council member who is leading the repeal effort, says the campaign is tapping into the “continual frustration for motorists and taxpayers,” and he calls the gas tax a “regressive tax that hurts working families.”
The new law, DeMaio says, impacts working families by increasing the cost of gas, raising vehicle registration fees and indirectly increasing the costs of consumer goods because of a hike in diesel taxes. That’s especially onerous, he says, because California’s cost of living is so high already, and the only way that lower-income families can find housing is to drive long distances -- increasing the gas taxes they pay.
DeMaio also alleges that gas tax money is being “stolen” by state politicians for projects that don’t benefit motorists, including high-speed rail, mass transit and so-called road diets (in which transportation agencies reduce the number of travel lanes on a street to promote safety). He maintains that those efforts don’t reduce congestion and are “infuriating to motorists.”
And finally DeMaio says that state transportation employees are paid excessively and given generous retirement benefits, driving up the costs of California’s transportation projects. He cites a 2014 report from legislative auditors who concluded that CalTrans, the state's transportation agency, was overstaffed by 3,500 workers. The gas tax money, he says, “is not going to fill potholes; it’s going to fill pensions.”
When Politifact looked into assertions last year that gas tax money was being diverted, it judged those to be “mostly false.” And officials from the Department of Finance, which helps prepare CalTrans' budget requests, say the auditors' approach regarding transportation staffing numbers was too simplistic, and didn't account for the fact that projects need more engineering work in the early stages of projects.
But DeMaio's arguments are clearly striking a nerve. Voters ousted a Democratic lawmaker, state Sen. Josh Newman, in a recall election in June because of his pivotal role in passing the gas tax increase.
DeMaio plans to unveil a second ballot measure this week, which is intended to go before voters in 2019, that would require gas tax money and revenue from a sales tax on vehicles to be dedicated to roads and highways. That would complete a strategy that DeMaio calls “recall, repeal and replace.”
Some 230 groups, which include local governments, transit agencies, labor unions, businesses and advocates for walkable neighborhoods, oppose the repeal effort. They argue that backing out of the law would cut jobs, hurt safety and increase commute times, not to mention create havoc with projects that are already under way or slated for construction.
“Cities have thousands of local transportation projects already in the pipeline that will make our roads safer and our commutes better. We have an obligation to every citizen and California driver to defeat this initiative,” Carolyn Coleman, the executive director of the League of California Cities, said in a statement.
The opponents of the repeal effort have more money on hand than proponents, but early polling showed that Californians preferred to repeal the tax.
In Missouri, unlike California, there seems to be no organized opposition to a ballot measure that would raise the state's fuel taxes for the first time since 1996. If approved, the plan would gradually increase the fuel tax by 2.5 cents a year for four years to address chronic funding problems for the state’s road network.
But the process of getting the question to the ballot box took Missourilawmakers more than eight years. Transportation funds dried up when a 15-year road plan, which had been passed in the early 1990s, expired just as the Great Recession hit. The Obama federal stimulus package helped for a while, but most of that money stopped flowing after 2010.
Legislators explored lots of ways to raise transportation money in the meantime. They toyed with the idea of tolling Interstate 70 between St. Louis and Kansas City. Republican lawmakers asked voters to raise the sales tax in 2014, but they drafted it in such a way that transit agencies, local officials and the state’s Democratic governor at the time opposed it. The measure ultimately failed.
This time around, the sales tax measure is supported by Gov. Mike Parson, the newly installed Republican governor, and U.S. Sen. Claire McCaskill, the state’s most prominent Democrat.
“Missouri officeholders know we can’t keep going how we’re going. It’s a nonpartisan issue, and the bill passed with bipartisan support,” says Scott Charton, a spokesman for SaferMO.com, the group promoting the effort.
Colorado voters, meanwhile, have a trickier choice before them. They can support a small transportation bond package with no new taxes, a bigger one that comes with a sales tax, or none of the above.
The confusing situation is the result of three different efforts to address transportation funding, which has become a perennial debate in the Capitol.
The Independence Institute, a libertarian think tank, is pushing a plan called “Fix Our Damn Roads.” It’s a small bond package of $3.5 billion with an lawmakers would have to come up with $250 million a year to repay the debt, but the measure’s supporters say their plan would force lawmakers to better prioritize spending to focus on roads.
The Denver Metro Chamber of Commerce, on the other hand, is pushing a plan to raise about $20 billion over the next two decades. That measure would rely on a sales tax hike of 0.62 percentage points to back the new bonds. The reliance on a sales tax -- rather than a gas tax, for instance -- would be unusual but not unheard of. Virginia, for example, raised its sales tax rate as part of a larger transportation package in 2013. And Connecticut lawmakers dedicated a portion of sales tax receipts to transportation two years later.
But lawmakers this year passed a new transportation law that could accommodate both, either or neither of those measures. Legislators found $645 million in general funds for transportation over the next two years. That would come on top of the money for the bonding measures. But if both the bonding measures fail this year, the legislature will ask voters to pass a $2.3 billion bond package next year.
Finally, Utahns will get a chance to weigh in on whether lawmakers should raise their state’s gas tax, even though most of the money would go to schools, not roads.
The advisory question came as part of a bigger deal that Utah lawmakers reached in order to fend off a ballot measure that would have increased the state’s income and sales taxes to generate $715 million for schools. Polls showed that a majority of Utahns supported the “Our Schools Now” initiative before the deal was struck.
Instead, voters will answer whether they support a 10-cent gas tax increase, which is expected to raise $120 million. Thirty percent of the new money would go toward local roads, while the rest would be dedicated to education. Of course, lawmakers would have to pass the changes for them to take effect.
If they made the changes, it would be the third time since 2015 that Utah lawmakers tinkered with their state’s fuel taxes. Legislators repealed the state’s per-gallon fuel taxes in 2015 and replaced them with a structure more like the sales tax, where the taxes are based on the price of fuel. It amounted to a tax increase of 4.5 cents per gallon. But when gas prices dropped two years later, lawmakers tweaked the formula to make sure the state wouldn’t lose out on transportation revenue.
If Utah does end up using gas tax money for schools, it would be in rare company. Only Texas uses a similar mechanism to fund schools, says Lee of the American Association of State Highway and Transportation Officials. In fact, most states seem to be headed in the opposite direction. It’s much more common, he says, for states these days to be adding protections -- often referred to as “lockboxes” -- to make sure that fuel taxes are only used for transportation purposes.
Still, Utah Gov. Gary Herbert praised the ballot measure, and the larger compromise package, when the deal was struck in May. "It's really staving off a significant tax increase for a minimal tax increase and will put money into education, put money into roads,” he said. “It's win, win, win all the way around.”