Everybody wants roads without potholes and bridges that don’t collapse when they drive over them, but no one wants to pay for them. The federal gasoline tax is supposed to pay to maintain the nation’s roadways, bridges, and tunnels but Congress has failed to raise it for more than 20 years. California has the same problem. Its legislature finally passed a new law last month raising the state’s gas tax by 12 cents a gallon. It also increases the tax on diesel fuel by 20 cents a gallon. Both increases are scheduled to phase in over the next 10 years, beginning in November of this year.
Proponents of the higher fuel taxes estimate they will add about $10 a month to the cost of living for most California residents. Governor Jerry Brown insisted the hike would be more than offset by the economic benefits state residents will get as a result of having better roads and transportation infrastructure.
“Safe and smooth roads make California a better place to live and strengthen our economy,” Brown said. “This legislation will put thousands of people to work.” Supporters predict the money collected will lead to the creation of hundreds of thousands of jobs over the next decade. That assessment is based on a federal formula that says 13,000 jobs are created for every $1 billion of investment.
California has a growing backlog of deferred maintenance projects, including more than 500 bridges statewide that are considered structurally deficient. In addition to the higher gas tax, the legislation hikes vehicle registration fees and adds a new $100 annual assessment for owners of battery electric cars. Electric vehicles, by definition, pay no fuel taxes. The total package is expected to raise $5.2 billion a year, all of it dedicated to road, highway, and bridge repairs, along with mass transit and anti-congestion projects.
The new law calls for a state constitutional amendment that will prohibit the new revenue being spent for any purposes other than transportation. That proposal will be placed before the voters in June. California already has some of the highest gasoline and diesel fuel prices in the country.
Source: Reuters via Autoblog