The City Council heard Tuesday about water conservation measures having a negative effect on the city budget. The panel also heard about a similar situation occurring in revenues that pay for road maintenance and repair.
The Council was told that gas tax and other revenues earmarked for road maintenance and repair keep declining because motorists are reducing the miles they travel or have switched to alternatives to driving.
In addition, vehicles get better gas mileage, and more hybrid and electric cars are on the road.
Daryl K. Halls, executive director of Solano Transportation Authority, described how the federal gas tax, 18.4 cents on every gallon of gasoline, hasn’t been increased since 1994, though purchasing power has declined nearly 30 percent since that year.
Benicia has received $390,000 of $5.1 million in federal gas tax money distributed to Solano County through the One Bay Area Grant (OBAG) program, Halls said.
According to the State Board of Equalization, the retail price of a gallon of gasoline includes the 18.4-cent federal tax, a 30-cent state tax, a 2-cent state underground storage fee and sales tax that varies by location.
Diesel fuel retail prices carry a 24-cent federal tax, 13-cent state tax and 2-cent storage fee, along with sales tax for each gallon sold.
Other costs, applied at the wholesale level, are an oil spill administration fee and prepaid sales taxes, the Board of Equalization website notes.
State gas tax revenue accounts for 79 percent of local streets and roads maintenance funding, with local money accounting for 14 percent and federal money picking up the remainder, Halls said.
But in 2015-16, the available revenues will be $5 million less than in the current year, Halls said.
Proposition 1B bonds, which have provided $192 million for Solano County projects, have been fully allocated and no longer will be a revenue source in the county. The State Transportation Infrastructure Program has been an “up-and-down fund source” for Solano County; Regional Measure 2 money comes from bridge tolls and has put $280 million into Solano County projects, including the Benicia bus hub. But those funds, too, have been allocated and no longer will be a major funding source for the county, Halls said.
Money from the Regional Transportation Impact Fee also has helped fund the Benicia bus hub, for which construction will start this year.
The League of California Cities has asked Benicia to submit letters of support for Senate Bill 16, advising the Council that if the bill passes, Benicia might receive $569,676 the first year, increasing to $732,440 by the fifth year.
However, a League statement advised Benicia employees not to rely “too heavily on these numbers,” because the legislation might be amended before it is passed.
Among its provisions, the proposed legislation would increase the excise tax by 10 cents on gasoline and by 12 cents on diesel. It would hike Vehicle Registration Fees by $35 each for all vehicles, and tack on $100 for vehicle registration for zero-emission vehicles.
The bill would be called a temporary five-year funding source for California transportation, but would be renewable after the fifth year.
Proponents say the bill would raise between $2.8 billion and $3.6 billion annually for maintenance and preservation of local streets and roads as well as the California highway system.
However, following City Manager Brad Kilger’s guidance, the Council decided it wasn’t ready to back the bill, choosing instead to observe its progress and possible modification by legislators.
Mayor Elizabeth Patterson suggested the panel “keep an eye on it,” and Councilmember Tom Campbell noted that California’s surplus has risen by $7 billion. “A lot is spoken for, but California has a decent budget surplus,” he said.
He also warned against crippling an emerging electric car industry by imposing a massive registration fee, though Councilmember Alan Schwartzman, who recently bought a hybrid car, said he’s been saving so much fuel money that the steeper fee wouldn’t be prohibitive.
“Electric cars are using the roads,” Patterson said, calling SB 16’s goals worthy of attention. “The money has to come from someplace.”
The panel was more amenable to an Assembly-proposed constitutional amendment that would reduce to 55 percent the majority needed to approve local government’s proposed special taxes for transportation projects. Formerly, such measures needed to pass by a two-thirds vote.
Schwartzman said he had no reservations about supporting the proposed constitutional amendment. “I have a problem with 33 percent blocking what 66 percent want,” he said. “We’ve got to find the money to improve roads.”
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Less Gas tax revemue? Thank the EPA for requiring higher mileage without thinking through the results. Thank the state legislature for electric & hybrid cars getting tax breaks and ride in the car pool lane.. Need more money for road maintenance? Go after the EPA and state legislature. After all, they reduced revenue – it is their fault. Do not raise my taxes for I already pay too much. Please don’t screw me again!
Yes. We already pay too much. Recently the City Council has been saying that they will prioritize our needs and spend accordingly. Where does that effort stand?
This City has a spending problem. Not a revenue problem.
There a re a couple of facts that need to be clarified in this article. First, while it is true that improved fuel economy and more hybrids and electric cars are impacting the gas tax revenue, so are lower gas prices. I have always found it quite curious that whenever gas prices have risen dramatically in the past, every politician has always called for an investigation of the oil companies to explain the high prices. They have never once made a single comment on the extra revenue brought in by gas taxes. Second, while improved economy etc have impacted the revenue, I think the more important question to ask is how many miles are driven annually, or put another way, how much gas in consumed in this state every year? The third point I would like to make is the fact that the politicians, a few decades back, decided to take the gas tax money and use it on other programs while ignoring the original intent of the gas tax. About 15 years ago, a ballot proposition was passed that was to put a stop to this practice, but our wonderful elected politicians used tax payer money to sue in court and the proposition was overturned.
All excellent points.
An additional method to equalize things a bit is to have a registration fee (over and above that which we have now) based on the weight of a vehicle. This encourages smaller, lighter cars as well as being fair based on heavier cars cause greater wear on the roads.
Lower gas prices have NOTHING to do with it. The tax is set at a number not a percent. Gas could be $10,000 a gallon and there would still be the same tax.
Steve, you are wrong. There is a 2.25% sales tax on gasoline and a 9.67% sales tax on diesel. So the price per gallon does matter.
On another note, did you know that the state makes more per gallon of gas than the oil companies?
Sorry that argument fails! The sales tax goes into that great black hole – the general fund.
I also read recently that cap and trade money, which adds to the price of fuel, has been diverted to High Speed Rail. It is well that the Council deferred acting on this. I would also suggest that more feedback to our representatives in Sacramento is needed to get Caltrans to focus more on the condition of our existing roads. Frankly, the underlying philosophy seems to be to allow them to deteriorate to the point where major rehab projects are needed.
Reg stated: the underlying philosophy seems to be to allow them to deteriorate to the point where major rehab projects are needed.
Or to frustrate people regarding driving so as to encourage them to use alternate public transportation..
No doubt. Unfortunately, the cost of this neglect extends to products that move in and out of the Bay Area and hurts its competitiveness in intra and interstate commerce. With as much warehousing and transhipping as we do here, we already have skin in this game. .