El Dorado County preps for possible gas tax repeal
As voters move past the June election and look ahead to November, they may see a measure repealing Senate Bill 1, which raised Californians’ gas and vehicle taxes after April 2017.
They may also see a measure to increase local sales tax to make up for the difference.
After the initial SB 1 repeal didn’t make it to the ballot, a new one could be in the works: the California Voter Approval for Gas and Vehicle Taxes Initiative, according to legislative database Ballotpedia. Signatures for the new attempt are still being counted so much is speculative at this point, but El Dorado County transportation officials are forming a backup plan for project funding in the event the bill goes away this fall.
According to county transportation director Rafael Martinez, SB 1 raised vehicle fees by 50 to 300 percent and imposed a 12-cent-per-gallon tax on residents, which would increase to 18 cents per gallon over the life of the tax. Ballotpedia said SB 1 also put a tax of 20 cents per gallon on diesel fuel.
Tax revenue from the bill has brought $700,000 to the county since February 2018, Martinez said at the June 12 Board of Supervisors meeting. He expects $1.7 million total from the tax this year and $5 million next year, which will go toward clearing and preparation for a variety of transportation updates like bridges, ditches, guardrails, striping, signs and signals.
Martinez’s presentation showed the status of transportation funding over recent decades. Funds from the Federal Highway Administration have remained relatively stable, between $1 million to $2 million per year since the 1990s, while money from the state general fund has dropped from $2 million per year to nearly zero in that time.
Meanwhile, construction costs are projected to double by the 2020s, the presentation showed. Today, the vast majority of the county’s transportation funding comes from SB 1. Martinez’s graph showed that trend continuing into the next decade.
To reduce costs in the event funding is lost, Martinez listed bridges, guardrails, signage and box culverts as prioritized projects. Other projects like sidewalks and asphalt would “take a backseat,” he said.
The department would also look at contracting maintenance. According to Martinez’s presentation, county transportation employed 177 staff members in 2003. Today, that number sits at 83.
To avoid reductions in service to the extent possible, Martinez proposed a ballot measure for a half-cent sales tax increase “if and only if” SB 1 is repealed.
If approved within the parameters of SB 1’s repeal, the sales tax in unincorporated areas of the county would rise from 7.25 to 7.75 percent, bringing in an estimated $6 million annually, Martinez said.
According to the California Department of Tax and Fee Administration, the city of Placerville’s sales tax is 8.25 percent, while the city of South Lake Tahoe’s is 7.75 percent.
Should the sales tax increase fail at the polls this year, Supervisors discussed the possibility of a special election in November 2019 or waiting the full two-year cycle to try again in 2020, though District 5 Supervisor Sue Novasel did not think the latter option sounded promising.
District 2 Supervisor Shiva Frentzen and District 3 Supervisor Brian Veerkamp both vocalized struggles with increasing residents’ taxes, though Veerkamp pointed out the money would come from local sources and stay in local projects.
District 1 Supervisor John Hidahl felt it was best to put the decision in the hands of voters, to help influence the decision to repeal SB 1 and to provide feedback for the county.
“If it goes down in flames, it goes down in flames,” Hidahl said. “But we at least have to ask the question.”
Martinez said 35 to 45 percent of the state’s municipalities were considering a similar self-help sales tax measure to prepare for a possible repeal.
County Chief Administrative Officer Don Ashton said staff would pursue language related to a sales tax ballot measure and bring it back to the board before it has to be approved in July.