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OPINION: County signs on for huge transportation tax increase

Desperate for road taxes, county supervisors back a bad plan rather than demand essential reform of the state budget process

Following the voter rebuke of San Benito County Measure P, the local one-half cent transportation sales tax, the Board of Supervisors approved a letter to the state legislature backing Senate Bill (SB) 1, a massive $6 billion annual transportation bill that is mostly higher and new taxes because the state is offering a small "bribe" to local jurisdictions — less than 37 cents back on each tax dollar.

This is not the first time or the first place that a local government was willing to throw their taxpayers under the bus in exchange for a small piece of the pie. SB1 is being sold as a bill to fix local roads, but the truth is that the state is going to rake off 63 cents of every dollar before the locals see a penny. If we're going sell out we should at least insist on a fair share of the swag.

At least $5 billion of the $6 billion will be generated directly on the backs of the drivers and transporters who have already paid the state for new roads and maintenance many times over only to see those funds diverted to other uses. The rest is just the usual “fool around funding” such as returning some of the road transportation monies that were diverted or “unused” cap and trade funds.

The proposed new taxes would include $1.8 billion from a 12-cent a gallon increase to the gasoline excise tax, $1.1 billion from a reset of the gasoline excise tax rate to 17.3 cents per gallon, $1.3 billion from a $38 annual increase to the Vehicle Registration Fee, $600 million from a 20-cent per gallon increase to the diesel excise tax, $263 million from a 3.5 percent increase to the diesel sales tax, and $20 million from a $100 to $165 – yet undecided – annual Vehicle Registration Fee on zero emission vehicles. It is estimated that total gas taxes including cap-and-trade will then approach 70 cents per gallon.

Additionally, all the taxes and fees would be adjusted for inflation every three years. The built-in inflation increases mean that the cost will continue to grow and the state’s massive transportation bureaucracy, which already returns less road per dollar than almost all of America, has no incentive to keep their exploding costs under control.

Worst of all, of the $6 billion only $2.2 billion, less than 37 percent, goes to local transportation. The rest will go to the state transportation system including, directly or indirectly, into mass transit such as the infamous, money-eating bullet train whose contractors have recently asked for another $300 million to build the short, goes nowhere, “easy part” of the system.

The county’s take when it is all phased in over three years would be $3.1 million a year, but the cost to the local taxpayers would be about $8.4 million a year, $7 million a year of that in new or increased taxes.

According to the Howard Jarvis Taxpayers Association, in the last six years the California general fund has increased more than $36 billion with zero dollars going to new transportation infrastructure, $3 billion a year of sales tax dollars from the purchase of new and used vehicles are going to the General Fund rather than road repair and $1.1 billion of truck weight fees are diverted to pay off bond debt.

This is not an argument about whether or not the roads are in lousy shape – they are – and we have an enormous backlog of construction and maintenance. I supported Measure P. Those who voted "no" are likely to be very unhappy with paying more than twice as much including to the county through a backdoor arrangement with Sacramento. This is an argument about how money is being spent at the state level and whether or not we should subsidize another diversion of funds. Only 20 percent of the state’s General Fund income provided by transportation is going to road repairs which means that 80 percent, including massive cap-and-trade funding for the bullet train, is going to other sectors.

Locally, it makes no sense for our politicians to give the state a dollar only to get back, at best, 37 cents to use on local roads just because it provides political cover. I do not buy the argument that “we” are not raising the taxes, "they” are. At some point the BoS will have to go to the residents to fill vital local needs and the residents will have empty pockets. This is a shortsighted decision that will end up hurting our commuters most of all. To sum up, it’s simply not worth it; at some point you have to stop bailing and patch the hole in the boat; that hole is the mismanaged state budget.

About:
Marty Richman (Marty Richman)

Born and raised in Brooklyn, NY, Marty (Martin G.) spent his teen years in northern New Jersey. He served more than 22 years on active military duty, mostly in Europe, and is a retired U.S. Army Chief Warrant Officer 4, Nuclear Weapons Technical Officer.Marty then worked 25 years in various engineering and management positions in the electronics and energetic materials industries supporting the communications, computer, aerospace, defense and automotive sectors. He is a graduate, summa cum laude, from The College of Hard Knocks, among his numerous awards and accomplishments. He was a regular weekly Op/Ed columnist and feature writer for The Hollister Free Lance for seven years and a member of its editorial board for five years. Marty is a frequent commentator and contributor to BenitoLink on a wide variety of local, state, national and international subjects. You can follow Marty Richman on twitter @Marty_Richman. Marty and his wife, Joyce, have been residents of Hollister since 1996.

Comments

I submit the Board of Supervisors and COG are acting in the best interest of the county to improve the condition of our roads based on proposed state and federal funding mechanisms such as SB1. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201...

SECTION 1.

 The Legislature finds and declares all of the following:
(a) Over the next 10 years, the state faces a $59 billion shortfall to adequately maintain the existing state highway system in order to keep it in a basic state of good repair.
(b) Similarly, cities and counties face a $78 billion shortfall over the next decade to adequately maintain the existing network of local streets and roads.
(c) Statewide taxes and fees dedicated to the maintenance of the system have not been increased in more than 20 years, with those revenues losing more than 55 percent of their purchasing power, while costs to maintain the system have steadily increased and much of the underlying infrastructure has aged past its expected useful life.
(d) California motorists are spending $17 billion annually in extra maintenance and car repair bills, which is more than $700 per driver, due to the state’s poorly maintained roads.
(e) Failing to act now to address this growing problem means that more drastic measures will be required to maintain our system in the future, essentially passing the burden on to future generations instead of doing our job today.
(f) A funding program will help address a portion of the maintenance backlog on the state’s road system and will stop the growth of the problem.
(g) Modestly increasing various fees can spread the cost of road repairs broadly to all users and beneficiaries of the road network without overburdening any one

Measure P failed to garner the required 2/3 voter support by about 7 percentage points. It had local bipartisan support but was poorly promoted to voters. I worked on the Measure P campaign and was frustrated by the aloof and unresponsive guidance proffered by the San Francisco-based campaign firm hired to advise the campaign committee. In my opinion, that firm essentially advised the committee to 'do very little' to promote the proposed tax because polls showed it would probably squeak through during a contentious and controversial election year. 

They were dead wrong...and were compensated handsomely for ineffective council in my opinion. 

COG needs to work harder to educate voters through a stronger grassroots movement in order to pass a local tax to fix our roads which, according to SB1, will be required anyway to become eligible for future funding mechanisms should SB1 be approved by the legislature.

So I disagree with the Howard Jarvis ideology and proscription against SB1. COG and the BOS are taking a judicious and measured approach to improve funding mechanisms that will pay for fixing and maintaining our local roads. 

Our elected leaders need to work harder at the local level to educate voters, rely less on so-called out-of-town political campaign "professionals" and motivate concerned citizens to campaign door-to-door, at shopping centers, post offices and outside the DMV office to promote a responsible 1/2 cent sales tax to fix our roads. 

I also supported Measure P and as a supporter I can say that a a massive $6 billion tax increase that gives the state 63 cents of every new tax dollar - much going to the bullet train directly or indirectly  - is NOT a "judicious and measured approach to improve funding mechanisms that will pay for fixing and maintaining our local roads."

It's always interesting to play "let's blame the consultant."  The complaints I heard the most about Measure P were that it did not idetiify, specifically, where the money would be spent, what would be fixed and many people did not want the money spent on Highway 25.  Well, in this proposed massive tax increase there is no specific programs (roads, highways, etc.) identified by the state which gets most of the money.

I cannot tell you if the voters will be consistent, but if they are they will oppose this boondoggle bill.  I would still support a local tax under OUR control.  Massive money that goes to the state disappears or gets eaten by $47,000 a mile in administrative costs.

Marty Richman

Mike, you failed to address the key issue - the diversion of highway building and maintenance funds to other areas. 

Obviously, if the funds are diverted, the public has to pay for the capital improvements two or more times.  That is the major problem - the money is being siphoned off to support the enormous state bureaucracy in areas that have nothing to do with transportation.

Just as an aside, what California does spend on roads and highways is not spent efficiently.  The weighted average of "Administrative Disbursements per State-Controlled Mile" for the 50 U.S. states is $10,051, California ranks 47 at $47,487 in administrative costs per state controlled mile, almost 5 times the national weighted average.  If you over-spend on administration, it reduces what little you have.

In "Annual Highway Performance and Cost-Effectiveness Overall Rankings" California ranks 42 of 50.

The taxpayers are entitled to get their money's worth, billions in highway funding are being diverted to the General Fund and what is done is done inefficiently.  I always support programs that give value, this massive tax increase is certainly not one of them.

Marty Richman

(Data Source:  Reason Foundation, 22nd Annual Highway Report, The Performance of State Highway Systems).

Again, I respectfully disagree. San Benito County needs to pass a local tax to fix our local roads. I will not argue that Measure P failed because too much emphasis may have been placed on future state highway improvements, but there is no clear and definitive data to support that opinion.

Benito Link readers should understand that the cited Reason Foundation is a so-called libertarian think tank that promotes privatization of all government services, so its 22nd Annual Highway Report will be skewed in favor of anti-tax, pro-industrial corporate public policy solutions; i.e. let corporations profit from owning and operating local, state and federal infrastructure systems including prisons. Together with the Howard Jarvis Taxpayers anti-tax activists responsible for passage of California's Proposition 13 in 1978 cited previously, local and state governments face formidable challenges to manage funding mechanisms and revenues based on traditional taxes, fees and assessments. 

I do not doubt that studies and reports support the premise of your opinion, but I do question the legitimacy of the data resources. 

I agree that we are desperate for a solution to improve local roads. And I support a local tax with checks and balances to fund critical infrastructure improvements. 

 

Mike, your standard, politically-based attack on anyone who disagrees with you is what I have come to expect; try sticking to the subject.  The report is not a political statement, it is a collection of official data.  You do not see me saying that you hold your positions just because you are a pro-union, left-wing radical who always encourages more public spending, do you?

If you have problems with the data, just point them out.  There is nothing in this report about privatization - that is the usual total red herring.  In fact, the data comes from the official government sources (pre-Trump in case you're going to go there). "The study is based on spending and performance data that state highway agencies provided to the federal government for 2013."

Colorado, a liberal state, ranked much higher than California.  Oregon, another liberal state, ranked 23 and had an administrative costs of only $16,160 per mile versus California's more than $47,000 per mile.  The report goes into detail.  Oregon spends $28,937 in Maintenance Disbursements per State-Controlled Mile, California spends $64,262 and Oregon's roads are in better condition than ours.  There were other liberal states with better ratings, nationwide   Collectively, 84 percent of the states in the nation had better ratings than California; incompetency is not political.

Percent Urban Interstate Mileage in Poor Condition, 2013

Oregon 4.7, California 13.2

Percent Rural Interstate Mileage in Poor Condition

Oregon 1.3, California 6.5

Since you cannot attack the data you have decided to attack the source, politically, - it's a cheap and unrelated shot.

Marty Richman

LOL! https://en.wikipedia.org/wiki/Reason_Foundation "Reason Foundation co-founder Robert Poole "is credited as the first person to use the term "privatization" to refer to the contracting-out of public services and is the author of the first-ever book on municipal privatization."

I disagree with the assertion that the BOS has done something wrong in seeking to resolve the biggest problem our community faces: the dilapidation of our roads. The data I pointed to is the verbiage of SB1. 

I don't have a problem being labeled a liberal; I've been called worse. I'm quite familiar with the Reason Foundation and the Howard Jarvis anti-tax activists. They offer a certain political view that adds value to our political landscape. Certainly, for better or for worse, Howard Jarvis is credited with Prop. 13 which shelters both residents and Big Business from escalated property taxes in California. 

But the issue is whether or not the BOS is doing the right thing by pursuing a special roads/transportation tax to fix the backbone of our economy and improve public safety. I submit that it is. As part of its due diligence and due process, the BOS decided to support SB1 and the funding mechanisms that will improve revenue to maintain local roads. I support that effort and disagree with your argument to the contrary. 

I also happen to agree that the argument against prevailing wage laws for public projects in California is futile and a moot point. 

Glad to get back to brass tacks - the question was are you challenging thr data in the report?  If not, then I'm going to use it to make my argument that California is not getting its money's worth from the funds generated by the state transportation system because:

1) Transportation-related income is being diverted to the state's General Fund.

2) The state transportation administration overhead is cost (> $47,000 a mile) is enormously overblown.

3) The maintenance costs are too high ($64,000 / mile, U.S. average $26,000 / mile)

and 4) 63 cents on the dollar of this so-called local road tax will go to the state right off the top.  San Bernito County will not get its money's worth.

This BoS made a bad decision because this is a bill that will soak millions from our local economy to support the bloated and misused state budget.

Marty Richman

Submitted by (Rob Bernosky) on

If a new local tax measure were put on the San Benito ballot today to fix our roads...and get rid of the prevailing wage issue so that we could get a lot of road repairs done (many private contractors bidding)...my guess is that it would pass easily.

Rob,

No, most voters do not know prevailing wage from a hole in the ground, that is a partisan political issue, not a baseline issue. 

I'm sure major local road repairs in small counties and cities like ours are overwhelmingly done by private contractors already and those who are qualified already bid for the work.  Like all other "small" jobs, the prices and overhead are higher, especially for construction that includes a high proportion of staging costs.

While you are waiting for the demise of prevailing wage laws, which is not going to happen in California, we could and should be doing a lot better at the state level which has an enormously inflated administration costs of over $47,000 per mile.

My biggest problem is the 63 cents of each dollar in this $6 billion tax plan is going to disappear into the state budget to end up who knows where.  You and Mike can fight over prevailing wage which has nothing to do with THIS state tax proposal, I can't seem to get either of you off your opposing political agendas to deal with the actual issue at hand which is a gi-normus tax increase for working families and business.

Marty Richman

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