TITLE
Recommendation to request City Attorney to prepare a resolution to oppose Proposition 6, the Voter Approval for Future Gas and Vehicle Taxes and 2017 Tax Repeal Initiative, which will be considered by voters statewide on the November 6, 2018 ballot. (Citywide)
DISCUSSION
In 2017, the State Legislature enacted Senate Bill (SB) 1 to increase annual State funding for state and local transportation projects through various fuel and vehicle taxes. Specifically, SB 1 increased the base gasoline excise tax by 12 cents per gallon, and the diesel sales tax by 4 percent. It also set fixed rates on a second gasoline excise tax and diesel excise tax, both of which previously could fluctuate annually based on fuel prices. Further, SB 1 created the transportation improvement fee, which ranges from $25 to $175 per year, and a fee specifically for zero-emission vehicles, set at $100 per year for model years 2020 and later. The bill also provides for inflation adjustments in the future. In Fiscal Year 2019 (FY 19), the California Department of Finance (DOF) expects SB 1 revenues will reach $4.4 billion statewide.
By 2020, when all SB 1 taxes and fees are in effect and the inflation adjustments have begun, the DOF expects SB 1 to generate $5.1 billion for transportation projects statewide. Of this amount, the City of Long Beach (City), expects $11 million per year, which is more than double existing State funds available for local streets and road projects. In context, the Highway Users Tax Account (HUTA), traditionally the primary source of State funding for local streets and roads, provides $10 million per year to the City. HUTA has been slowly declining in recent years because of gradual decreases in gasoline and diesel fuel consumption as drivers switch to more fuel-efficient vehicles and alternative modes of transportation.
The need for a sustainable and appropriately funded revenue stream to maintain local streets and roads is high. The City has a Capital...
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