By Mary O’KEEFE

Prior to 2017, the last time the gas tax was raised was in 1989; it went from nine cents to 18 cents a gallon. In 2017, the passage of SB1 raised the state excise tax on gas by 12 cents per gallon.

According to the Legislative Analyst Office, Prop 6 “Eliminates Recently Enacted Road Repair and Transportation Funding by Repealing Revenues Dedicated for Those Purposes – Also known as Repeal the Gas Tax.”

A yes vote on Prop 6 would eliminate SB1. This would reduce funding for highway and road maintenance and repairs, as well as transit programs. The Legislature would also be required to get a majority of voters to approve new or increased state fuel and vehicle taxes.

A no vote means the fuel and vehicle taxes recently passed, SB1, would stay in effect and continue to fund highway and road maintenance. The Legislature would continue not to need voter approval for new or increased state fuel and vehicle taxes in the future.

“SB1 doubled funds available for transportation,” said Jim Medina, spokesman for Caltrans.

According to Yes on 6 to repeal the gas tax, California gas prices are already the second highest in the nation, behind Hawaii, and are projected to reach over $4 a gallon in a few years due to new fees imposed by the state Legislature.

This fiscal year the state expects SB1 to raise $4.4 billion; two years from now, when all the taxes are in place, the state expects to raise $5.1 billion, according to LAO.

“We agree we need to fix the roads,” said Carl DeMaio, chairman for Yes on Prop. 6.

But how and where those funds will be spent seem to be the source of much of the debate.

According to DeMaio, the state has a $16 billion budget surplus and the funds do not get spent on roads. He added that if the state spent the funds already raised it would be enough to do the repairs across California.

“If pre-existing transportation taxes and fees were spent on transportation, California would have $5.6 billion annually for transportation projects,” according to Yes on 6.

However, the No on 6 response is these funds are needed to make the repairs, many of which are already underway.

“California has a combined need of over $130 billion over the next 10 years just to bring the state highway and local street and road systems into a good and safe condition,” according to No on 6.

The debate goes back and forth with DeMaio pointing out the amount of money already spent on gas by working Californians and how the elimination of gas taxes would help costs go down.

Medina pointed to the No on 6 website that states that drivers will spend more than the average of $739 annually on auto repairs including front end alignments, shocks and tires as they drive on bad roads.

Both sides claim politics are involved, and it is not just about the roads and safety.

Another part of Prop 6 is the requirement regarding the Legislature’s process for imposing new or increased taxes on fuel, vehicle and transportation related fees. Prop 6, if approved, would make it more difficult to enact fuel and vehicle taxes because they would require a majority of voters for approval.

DeMaio feels the passing of SB1 was the “willful misconduct” of state lawmakers.

The bottom line is money – those who support Yes on Prop. 6 do not want to pay any more taxes, feel Caltrans and the state need to spend the money they already have on street repair and want to make it more difficult in the future for the Legislature to raise taxes on gas and vehicles.

Those who support No on 6, which includes California Association of Highway Patrolmen and California Professional Firefighters, see it as a safety issue.

“We oppose this dangerous measure because it would stop thousands of needed road safety repair projects all over the state, putting driver and pedestrian safety at greater risk,” stated Doug Villars, president of California Association of Highway Patrolmen.

According to LAO, California transportation funding is estimated to total $35 billion. Of this, $16 billion comes from local sources, $12 billion from the state and $7 billion from federal sources. If the proposition is not passed, in two years the revenue reduction would total $5.1 billion annually. The funding reductions would mainly affect highway and road maintenance and repair programs, as well as transit programs.

Another proposition on the ballot is Prop 7, daylight saving time. A yes vote means the Legislature, with a two thirds vote, could change daylight saving time if the change is allowed by the federal government. A no vote means that California would maintain its current daylight saving time program.

In 1949, California voters approved an initiative measure that established daylight saving time in California. The Legislature can only make changes to that initiative measure by submitting those changes to the voters for their approval. States can opt out of DST and remain on standard time all year long, like Arizona.

There does not seem to be any fiscal affect to the state because an approval does not automatically change the state to DST. The fiscal impact would be determined by future actions of the Legislature. If it were decided to change to year-round DST, sunrise and sunset would occur one hour later between November and March than they do with the present system. This would most likely affect the energy use for lighting, heating and cooling during those months.

Another proposition being discussed is Prop 10—Expands Local Governments’ Authority to Enact Rent Control on Residential Property.

This is one of those propositions where yes and no votes can be confusing.

A yes vote means the state would not limit the kinds of control laws cities and counties could have on housing.

A no vote means the state would continue to limit the kinds of rent control laws cities and counties have.

Both sides of this proposition have advertised heavily, both stating that no matter what the vote, renters would lose. Here is what the Legislative Analyst Office states:

State law, known as Costa-Hawkins Rental Housing Act, limits local rent control laws. Under this law, rent control cannot apply to any single-family homes. Rent control can never apply to any newly-built housing completed on or after Feb. 1, 1995. And rent control laws cannot dictate what landlords can charge a new renter when first moving in.

If passed, Prop 10 would repeal Costa-Hawkins and, therefore, would allow cities and counties to regulate rents for any type of housing. This may also include how much a landlord can increase rents when a new tenant moves in. It does not make any changes to existing local rent control laws. The measure does require that rent control laws allow landlords a fair rate of return. The LAO states that if communities create or expand their rent control it could result in landlords selling their rental housing. The value of rental housing would decline because potential landlords would not want to pay as much for these properties, some renters would spend less on rent, some landlords would receive less rental income and some renters would move less often. These effects would depend on the laws communities create concerning rent in their cities.

There could be a change in state and local revenues, including a decline in the value of rental properties that, over the years, would lead to a decrease in property tax payments made by owners of those properties. Tenants who pay less in rent would have more money to spend in other areas, like taxable goods. Landlords’ income tax payments would change including a reduction in their income tax payments, because they would be receiving less money for their rentals. However, over time, landlords could pay less to purchase rental properties. The resulting loss would be for state and local revenues in the long term. The amount of lost revenue would depend on several factors, most specifically the way cities and counties respond to the measure. If cities and counties expand rent control, revenues losses could be in the tens of thousands of dollars.

If Prop 10 were to pass – a yes vote – rents and landlords would not immediately be affected. It is all up to the local cities and counties as to what they feel is the appropriate reaction to their new ability to set laws concerning rental housing.

For complete information on all propositions visit https://lao.ca.gov.

  Mary Okeefe