Gilroy
– Assembly Democrats Tuesday proposed a complicated plan
involving tax cuts, tax increases and bonds that they said would
generate an additional $60 billion for transportation projects over
the next 30 years.
Gilroy – Assembly Democrats Tuesday proposed a complicated plan involving tax cuts, tax increases and bonds that they said would generate an additional $60 billion for transportation projects over the next 30 years.
The legislation would put a $10 billion transportation bond measure on the ballot in 2006. It would also eliminate the sales tax on gasoline, cutting prices about 11 cents a gallon. But it would add a quarter percent to the sales tax on other taxable items until at least 2010 and earmark that money for transportation, and it would raise the 18-cent-per-gallon excise tax on gasoline by 3 percent every five years to keep up with inflation.
Assembly Speaker Fabian Nuñez, D-Los Angeles, said tax adjustments would be revenue neutral if the federal estate tax goes up as scheduled in 2010. The state is supposed to get a share of that increase. He said the plan would ease pump prices while generating more money for transit and highway projects aimed at easing congestion and boost the economy.
Nuñez contrasted the Democrats’ plan with Republican Gov. Arnold Schwarzenegger’s proposal to borrow $1.3 billion from the state’s transportation account in the coming fiscal year to help balance the state budget.
“Traffic is too much of a headache-producer and a stress on our economy” to hold up new projects, he said.
Valley Transportation Authority Deputy Director John Ristow said the plan wouldn’t be a major boon to Santa Clara County in the immediate future. The only major project in the county that was threatened by the state’s budget woes was construction to ease congestion at the intersection of highways 152 and 156. That project is now earmarked – but not yet guaranteed – to receive $13.9 million in federal funding.
Ristow said that the county’s financial situation has been so bad in recent years that it hasn’t moved forward with the kind of projects that could benefit from a sudden surge in state funding. He guessed that the majority of the funds from any bond measure would go toward stalled high-profile projects like the Bay Bridge.
The plan needs bipartisan support because the bond and the Constitutional amendment needed to permanently exempt gas from sales tax require two-thirds majorities to pass the Assembly and Senate. The simple-majority bill to immediately cut the gas tax and raise the sales tax will not be introduced if Democrats can not marshal support for the other measures.
That support appeared unlikely Tuesday. A spokesman for the governor said the administration would give the Democrats’ plan “the serious review and open-minded consideration it deserves, which is more than the Legislature has given the governor’s reform proposals.”
He was referring to legislation backed by Schwarzenegger to automatically cut state programs when spending exceeds revenue, tie teacher pay to performance rather than seniority, eliminate traditional public employee pensions and allow retired judges, instead of the Legislature, to draw legislative and congressional districts.
Republic Assemblyman John Benoit of Riverside was blunter in his assessment of the plan.
“This is a huge tax shell game,” Benoit said, predicting the governor will not support the plan. “We need to invest in our transportation infrastructure, but to call this a balanced proposal is disingenuous. It’s a heck of a leap of faith.”
