Business Split on Transportation Tax Increase

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The governor and legislature barreled ahead with their tax and vehicle registration fee increase proposal for road repair with little compromise that would use more currently collected revenues for the roads. The plan offers some accountability language and a constitutional amendment to protect the new taxes from being spent on other than transportation needs. But where is the language to bring old revenue tied to transportation purposes under the same protective umbrella, which could reduce the size of the tax increase?

Not surprising business interests have different opinions on the proposal. Groups like the California Chamber of Commerce, which has been involved in negotiations with the governor and legislature over improving infrastructure to help boost the economy, came out in support. Meanwhile, the National Federation of Small Business/California argued that small businesses fear that increased costs associated with the gas tax boost will hurt small businesses and workers.

The Los Angeles County Business Federation expressed disappointment that the plan didn’t emphasize public-private partnerships to do some of the road work while at the same time acknowledging that some of its members would support the tax plan while others would find fault with it.

CalChamber president Allan Zaremberg said in a release, “Our transportation infrastructure is critical to California’s economy. The California Chamber of Commerce supports new revenue to repair and maintain our roads and bridges and to reduce traffic congestion.  Every day, California drivers spend too many hours in choking traffic on deteriorating roads, while businesses face increased costs and falling productivity from congested highways.”

Tom Scott of NFIB had a different view: “NFIB is firmly opposed to this package of transportation tax increases, which includes the highest gas tax increase in California history. While we can all agree there is a dire need to invest in our roads and infrastructure, Californians already pay billions in taxes every year to fund these repairs. Sacramento already has the money to fix our roads, but Governor Brown, Senate Pro Tem Kevin de Leon, and Speaker Anthony Rendon today announced they would rather raise new taxes on the backs of small businesses and working families.”

The battle is on for the votes. As of now the two-thirds majority needed to approve the tax doesn’t seem to be there, especially for the April 6 deadline set by the governor. However, the governor is determined to make this happen. If one Republican jumps aboard, Brown will claim bi-partisan support. However, Republican legislators oppose the plan pushing their own transportation funding measure, AB 496, authored by Assemblyman Vince Fong.

Brown and his colleagues tried to blunt Republican opposition by noting that the provisions of gas tax and road repair package were in line with President Ronald Reagan’s federal gas tax increase of 1982.

The tax increase proposal will have repercussions on other measures floating through the legislative process. Bills promoting tax increases are likely doomed if the $5.2 billion gas tax measure becomes law.

 

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