Measures that would impose sales taxes for transportation dominate local ballots around California this November. Five counties are attempting to get voter approval for local-option sales taxes for the first time, while another five counties are seeking extensions of existing taxes.
Seeking their first sales taxes for transportation are Ventura, Sonoma, Solano, Santa Cruz and Marin counties. With a population of 800,000, Ventura County is the most populous county in the state that does not have a local-option sales tax for transportation.
Trying for extensions of existing half-percent taxes are San Mateo, San Diego, San Bernardino, Sacramento and Contra Costa counties. Although voters in all of those counties approved sales taxes during the late 1980s, all measures passed with only majority votes, ranging from 62% in San Mateo County to 52% in Sacramento County. In 1995, the state Supreme Court made clear in Guardino v. Santa Clara County Local Transportation Authority, 11 Cal.4th 220 (see CP&DR Legal Digest, November 1995) that these special taxes require two-thirds voter approval. Everyone involved says that winning two-thirds voter approval is challenging for proponents.
“It’s terribly difficult,” said San Bernardino Association of Governments (SANBAG) Executive Director Norm King. “In every county, you get 20% who say no, period. But our polling indicates we have a chance.”
During the last 20 years, there have been only 44 elections in California for transportation-related, local-option sales taxes, according to the Self-Help Counties Coalition. About half of those elections were from 1988 through 1992. Because some of the approved sales taxes are nearing their sunset dates, and because local revenues are becoming a larger part of transportation funding formulas, more measures are appearing on ballots these days than during most of the 1990s. Voters decided four measures in 2000 and five measures during 2002.
Counties are being forced to rely more heavily on sales taxes because traditional funding for highways, streets and roads, and transit is dwindling. Nowadays, a county should expect to pay at least half the cost of a freeway project, whereas 25 years ago the state and federal governments would have paid about 80% of the cost, with most of that revenue coming from fuel taxes.
“The sales tax is becoming a more and more important source of revenue for transportation improvements because the gasoline tax is drying up,” King said.
Martin Wachs, director of the Institute of Transportation Studies at University of California, Berkeley, said the growing emphasis on sales taxes for roads is part of a larger devolution of policy to local levels of government.
“There has been no substantial increase in state or federal fuel taxes in more than a decade,” Wachs said. “There is a shift of fiscal responsibility — and it’s not happening in just transportation, it’s happening in all sectors — to local governments.”
This downshifting of responsibility is almost a policy by default. Neither the Legislature nor any administration has announced a new policy or change in direction. Instead, elected officials at the state level have failed to recognize the 100-year history and importance of user fees for funding transportation, Wachs said. Additionally, term-limited lawmakers, who often take a short-term view of things, increasingly refuse to raise taxes on their watch, he said. So, with vehicles becoming more fuel efficient while the fuel tax remains the same, the result is less tax revenue (or user fees) per mile driven.
Compounding the situation in recent years has been unprecedented use of fuel tax revenue for general fund spending. Both the Davis and Schwarzenegger administrations have raided the state highway account, which had previously been held inviolate. Additionally, both administrations and the Legislature have suspended Proposition 42, the measure approved by voters in 2002 that calls for the 6% sales tax on gasoline to be used for pavement and transit.
Sacramento Bee columnist Dan Walters recently summed up the situation: In the 2004-05 fiscal year, “the state will take an additional $1.2 billion from the gasoline sales tax while repaying $1.4 billion to various highway accounts that had been diverted previously, almost all of which would originate in payments from Indian gambling casinos. In other words, slightly improving transportation financing is now dependent on Californians losing more money after driving to casinos.”
Sarah West, executive director of the Self-Help Counties Coalition, said that there is not enough money left in state transportation accounts to patch chuckholes.
“While people talk about the transportation shut down of the Jerry Brown years, this is as bad and could get worse,” West said. “Any county that wants to actually do anything has to show some independent revenue stream, and the sales tax is the most flexible, effective way to go.”
Thus, the burden shifts to local governments. “It’s pretty much a national phenomenon, although, as usual, it’s more extreme in California,” Wachs said.
Also more extreme is the two-thirds vote threshold, which few other places have. Since the Guardino ruling, transportation sales taxes have passed only in Santa Clara, San Francisco, Alameda and Riverside counties. Meanwhile, eight counties — including some that are trying again this year — have failed to cross the two-thirds hurdle.
Those entities that have gained two-thirds support for sales tax measures did so, in part, by presenting unified fronts. Nearly all elected officials and many business groups endorsed the measures. In Alameda County, which has more Sierra Club members than any county in the United States, officials made sure they had the environmental group’s support for a 2000 ballot measure. Not coincidentally, the transit-heavy measure received 80% of the vote — compared with only 58% support two years earlier for a different transportation sales tax measure.
In several counties this year, support for sales tax measures is not rock solid. In Ventura County, the half-percent transportation sales tax is on the same ballot as a quarter-percent sales tax for open space acquisitions. Having voters decide on somewhat conflicting measures (some of the open space tax’s strongest supporters oppose the transportation tax) threatens to doom both measures.
In Santa Cruz County, about the only thing more unpopular than growth is highway construction. With two-thirds of the money from the Measure J sales tax earmarked for enhancing Highway 1 from Santa Cruz to Watsonville, the election is essentially a referendum on a wider freeway. Opponents, who include the Sierra Club, call the highway plan “a 1950s-style attempt to solve a 21st century problem.”
In Sacramento and Contra Costa counties, conflicts over how to spend the sales tax revenue have divided elected officials and interest groups. But those conflicts have been minor compared with the political and legal battles over San Diego County’s Proposition A.
The San Diego County Board of Supervisors voted 3-2 to oppose the extension of the half-percent sales tax because they argue the “TransNet” spending plan does include enough money for highways and rural roads. In September, Supervisors Dianne Jacob and Pam Slater-Price, as well as radio personality and former San Diego Mayor Roger Hedgecock, successfully defended their ballot argument against Proposition A in court. At the same time, slow-growth advocates and some environmentalists are opposing the tax, saying that it encourages growth and lets developers off too easily.
San Diego County, like the other counties seeking a tax renewal, is years away from having its sales tax override expire. But transportation experts say that getting early approval of an extension is necessary for agencies to continue delivering projects.
Older measures are mostly paying off bonds that funded already completed projects, West said. By gaining approval to extend the taxes years in advance, officials can move forward with the long planning and environmental review processes required of new projects, she said.
“To the voters, it’s a seamless process. The tax never lapses and the projects keep rolling,” she said.
“Transportation projects,” said SANBAG’s King, “need a lot of time to get ready for construction. One advantage for going early is that you know you’ll have funds, and you can also borrow ahead.”
The success rate of transportation sales taxes in November is likely to help determine how many other counties go the same route in the near future. Napa and Monterey counties came close to putting measures on this year’s ballot, San Joaquin County is looking toward 2006, and Marin and Sonoma counties have discussed a bi-county measure to fund commuter rail.
Sarah West, Self-Help Counties Coalition, (916) 442-7195.
Norm King, San Bernardino County Association of Governments, (909) 884-8276.
Martin Wachs, Institute for Transportation Studies at UC Berkeley, (510) 642-3585.
Sonoma County Transportation Authority: www.co.sonoma.ca.us/scta
Ventura County Transportation Commission: www.goventura.org
Solano Transportation Improvement Authority: www.sta.dst.ca.us/stia