California spends over $15 billion annually to maintain, operate, and improve its highways, streets and roads, rail, and transit systems. About half of these revenues come from the local level in the form of local sales and property taxes and transit fares. The remainder comes from the state and federal levels, largely as motor fuel (gasoline) and diesel fuel taxes and truck weight fees.
Currently, the state levies two types of taxes on gasoline and diesel fuel:
An excise tax of 18 cents on each gallon of gasoline and diesel fuel.
A sales tax on the sales of gasoline and diesel fuel. The statewide rate is 5.75 percent through 2001. This rate will change to 6 percent on January 1, 2002.
Revenues from the state excise tax on gasoline and diesel fuel used on public roads total about $3 billion a year. These revenues are dedicated to transportation purposes.
Revenues from most of the state sales tax on diesel fuel—4.75 percent out of the statewide rate—are also used for transportation. However, most of the revenues from the state sales tax on gasoline have historically been used for various general purposes, including education, health, social services, corrections, and local government fiscal relief. Only a small portion of the state gasoline sales tax revenues have been used for transportation.
In 2000, the Transportation Congestion Relief Program (TCRP) was enacted in California. Under the program, gasoline sales tax revenues will be used from 2003-04 through 2007-08 for specified transportation purposes including highways, streets and roads, and transit improvements. Thereafter, these revenues will be available for various general state purposes.
This measure places in the State Constitution those provisions of current law that require that, from 2003-04 through 2007-08, gasoline sales tax revenues be used for specified state and local transportation purposes. The revenues would be allocated for transportation purposes specified under the TCRP.
In addition, the measure requires that starting in 2008-09 the gasoline sales tax revenues continue to be used for state and local transportation purposes. The revenues would be allocated as follows:
20 percent to public transportation.
40 percent to transportation improvement projects funded in the State Transportation Improvement Program, a five-year transportation capital investment program.
40 percent to local streets and roads improvements; with half of the amount (20 percent) allocated to counties and half to cities.
The measure authorizes the Legislature to modify this distribution of the revenues with a two-thirds vote. The measure also provides that the use of these revenues for transportation purposes can be suspended under specified conditions.
The measure places in the State Constitution those provisions of current law that require the use of state gasoline sales tax revenues for state and local transportation purposes from 2003-04 through 2007-08. Consequently, for that period, the measure would have no additional fiscal impact.
Beginning in 2008-09, the measure requires that state gasoline sales tax revenues continue to be used for transportation purposes in the future. The amount that would be used is projected to be about $1.4 billion in 2008-09, increasing annually thereafter, depending on increases in gasoline prices and consumption.