Fuel Tax Funded Transportation Package Headed to Governor

Sacramento, CA…Late last night, the Legislature passed Senate Bill 1 by Senator Jim Beall (D-San Jose), a 10-year, $52 billion transportation plan, the largest overhaul of transportation funding in the state in more than 25 years. The Senate voted 27-11, and the Assembly voted 54-26 – the bare minimum two-thirds margins required for a tax increase. The voting occurred primarily on party line with all but one Democrat supporting the bill in the Assembly, and all Republicans voting “no.” In the State Senate, all Democrats voted to support the bill, with the exception of Senator Steve Glazer (D-Contra Costa) voting “no,” and Senator Anthony Cannella (R-Stanislaus) voting “aye.”

Governor Brown is expected to sign SB 1 into law in the coming days. It should be noted that an accompanying Constitutional Amendment will be put before the voters in November of 2018. This effort will help ensure that monies raised under SB 1 remain dedicated to transportation purposes.

The $5 billion per year in new revenues will come from a 12-cent gasoline excise tax (effective November 2017), a new transportation improvement fee charged on vehicle registrations (based on the value of the vehicle), an additional $100 zero-emission vehicle fee (effective 2020), a 20-cent diesel excise tax (effective November 2017), and a 4 percent diesel sales tax increase. The motor vehicle fuel tax increases will take effect in November. The Governor stressed that the package comes with strict new accountability provisions to ensure funds can only be spent on transportation.

The proposed package allocates $3 billion per year to fix-it-first road and highway maintenance projects, split evenly between state and local governments.

The RCRC Board of Directors voted to support SB 1 at its March meeting.