El Dorado County supervisors: Road tax increase still possible
A tax increase is not off the table.
That was the message shared earlier this month at an El Dorado County Board of Supervisors meeting, during which local leaders discussed how to boost the county’s Road Fund revenue. The Road Fund covers maintenance and general repairs on roads within the county’s unincorporated areas. This fiscal year the county expects to spend more than $28 million from the Road Fund.
Projections presented by county Department of Transportation Director Rafael Martinez state the Road Fund will have a $2.8 million shortfall by the 2020-21 fiscal year. And, he added, to “properly and adequately” address road deficiencies the county would need an additional $4.2 million annually.
Martinez told supervisors the main source of road maintenance funding — gas tax revenue — has come up short in recent years due to an increase in more fuel-efficient and electric vehicles.
“We are collecting less gas tax now than we were nine years ago,” he said, adding that construction costs have nearly doubled in the last 10 years.
State Senate Bill 1, the Road Repair and Accountability Act of 2017 (a voter-approved gas tax increase and vehicle licensing fee), is supposed to help jurisdictions recoup some lost revenue; however, Martinez said, the county isn’t receiving much help. Of the $15 million to $18 million the county generates in SB1 revenue each year, it gets only $5 million back from the state.
What is the future of the Road Fund?
“We only have two options: increase revenue or reduce expenditures,” Martinez said.
He outlined five revenue-boosting options: 1. grants, 2. creating/expanding county service areas, 3. imposing a local vehicle registration fee, 4. increasing the Transient Occupancy Tax and 5. using discretionary revenue El Dorado County receives from its agreement with the Shingle Springs Band of Miwok Indians. Options 2, 3 and 4 require voter approval and options 1 and 5 are limited in revenue.
Noticeably absent, supervisors noted, was a proposed sales tax increase.
“We’ve got to put (a) sales tax (increase) in this right now,” District 5 Supervisor Sue Novasel said. “We should be looking at all the options. Nothing should be sacred.”
District 1 Supervisor John Hidahl said “priority 1” must be securing grants but the county should analyze the sales tax increase option and, if it makes the ballot, ensure voters are educated about how the increase benefits them and the entire community.
If voters approved a sales tax increase specifically for road maintenance, the county would be eligible for more state funding. The state originally determined El Dorado County would receive $10 million in SB1 revenue, Martinez said, but then took back half because the county doesn’t have a “self-help” designation. A successful sales tax initiative (two-thirds of voters would have to approve) would meet this criteria.
Hidahl said he’d like assurance from the state that if voters approved a local sales tax increase, the county would get its additional funding. The notion drew some chuckles and head-shaking.
The state has all the control, District 3 Supervisor Brian Veerkamp frustratingly noted. “We’re putting all this money in and we’re not getting enough in return.”
El Dorado County is not alone in this struggle, Martinez told the board, explaining that other California jurisdictions have the same beef with the state. Organizations to which El Dorado County belongs, including Rural County Representatives of California and the Sacramento Area Council of Governments, are lobbying the state on behalf of jurisdictions that need more road maintenance funding.
Grizzly Flat resident Mark Almer encouraged the Board of Supervisors to support DOT by pursuing every funding option.
“Our roads are crumbling,” Almer said. “I don’t want to pay more taxes myself but deferred maintenance is killing our roads.”
Bill George with the Taxpayers Association of El Dorado County encouraged the board to live within its means, adding that the county shouldn’t build new roads when it can’t maintain existing roads
But Diamond Springs resident Kris Payne, who serves on the El Dorado County Community and Economic Development Advisory Committee, cautioned against that idea, saying new roads lead to more economic growth in the county thereby increasing its tax base.
The supervisors made no decisions regarding the Road Fund at Tuesday’s meeting. The discussion will continue at a special budget meeting scheduled for Monday, April 22.