Published: Fri, March 31, 2017
Markets | By Lucia Cruz

Business Split on Transportation Tax Increase

Business Split on Transportation Tax Increase

The funding package also calls for a hike of 12 cents in the excise tax for gasoline to 39.5 cents a gallon, raising roughly $2.4 billion a year, and $1.6 billion a year would be raised through a new "transportation improvement fee" apparently tied to annual vehicle registrations. Republicans are against the governor's plan saying Californians already pay some of the highest gas taxes in the country. Owners of electric cars would not escape this fee, they would pay a $100 annual fee because they use the roads, but don't pay gas taxes. This means traffic congestion will only get worse - even with $5.2 billion extra every year in tax revenue for the next 10 years. This so-called plan is the latest assault on working class people the Democrats claim to represent and will make many hard-working Californians, including our seniors, choose between food and gas or medicine and gas.” Stone said.

Under the Democrats' package, each auto owner will also be assessed a new "transportation improvement fee" based on the value of the vehicle.

Brown, a fiscal moderate credited with bringing the state back from a $27 billion budget gap, has refused to sign on to plans that involve borrowing money, and Republicans and some moderate Democrats have resisted raising gasoline taxes. It's been 23 years since the state had a base excise tax on gas, leading to more than $100 billion backlog of infrastructure fix. Now that Sacramento has created this problem, they are asking poor and middle-income families to bail them out with the largest gas tax increase in California history.

To increase transparency, Brown's deal would ask voters to approve a constitutional amendment to prevent new transportation dollars from being spent on non-transportation projects.

"If we don't do it, the roads will crumble", he added.

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Along with Brown, the plan is being pushed by Senate President Pro Tem Kevin de Leon, D-Los Angeles, Assembly Speaker Anthony Rendon, D-Paramount, and the Fix Our Roads Coalition. The governor and Democratic legislative leaders hope to rush it through the Legislature next week.

"They didn't work with Republicans at all on this proposal".

The Democratic governor and top legislative leaders hit the road Thursday to pressure two moderate Democrats in Concord who will cast decisive votes on a major piece of Brown's legacy. "These investments will make California's roads safer, transit systems more reliable, and communities better prepared for tomorrow", Lee said in a statement. It is projected to raise $16.3 billion.

The money would be split between state and local governments.

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