California governor orders fuel tax revenue diversion from roads

October 9, 2019

Keith Goble

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Action taken by California Gov. Gavin Newsom will result in a fuel tax revenue diversion, with billions of dollars touted to benefit roads and bridges instead to be routed for other purposes.

The Democratic governor has issued an executive order to use $5 billion of revenue raised via a recent fuel tax increase for a program to reduce greenhouse gases and emissions.

“California has ambitious and essential climate goals to transition to a healthier, more sustainable and more inclusive economy, including reducing greenhouse gas emissions 40% below 1990 levels by 2030,” Newsom wrote in his order.

Specifically, Newsom’s executive order directs a fuel tax revenue diversion away from local highways to benefit rail and other projects.

He said the shift away from local road projects will “help reverse the trend of increased fuel consumption and reduce greenhouse gas emissions associated with the transportation sector.”

2017 transportation deal

The money being tapped by Newsom comes from a 2017 transportation funding deal, or SB1, that increased the diesel tax by 20 cents and increased the gas tax by 19.5 cents. The excise rates on gas and diesel also will be adjusted for inflation beginning in July 2020.

Republican legislators say the governor and his party’s leaders are breaking a promise made to California taxpayers.

“In addition to breaking the promise to voters – who now pay the highest gas prices in the nation thanks in part to the SB1 gas tax – Newsom’s quiet diversion also means $5 billion less for road repairs and improvements,” reads a California Senate Republicans statement.

‘Bait and switch’

Newsom’s order is intended to help the state reach goals that include reducing vehicle miles traveled via support of housing near available jobs; encouraging people to shift from cars to other modes of transportation; and fund transportation options such as transit, walking, biking, and “other active modes.”

Assemblyman Jim Patterson, R-Fresno, wants state legislators from both parties to take action. He said diverting the additional fuel tax revenue billed to benefit roads and bridges throughout the state is a “bait and switch.”

In 2018, voters in California said in a statewide ballot that they did not want elected officials to shift new transportation revenue away from transportation.

Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.