Speaker's Commission
State Seal
Deal on gas sales tax means state budget will likely pass

The agreement gives Democrats the votes needed to pass the budget in the Assembly.

By Andrew LaMar

The Los Angeles Times, Thursday, June 15, 2000

SACRAMENTO -- Budget negotiators cut a deal on Wednesday that will dedicate $1 billion a year in state gas sales tax revenue to transportation spending and will leave in place the governor's controversial $5.3 billion congestion relief plan.

In return for giving Republicans something they have sought -- a provision ensuring gas sales tax money in future years will be spent exclusively on transportation -- Democrats won assurances that at least eight Assembly Republicans would vote for the $100 billion state budget today.

Assembly Democrats need eight Republicans to join them to get the two-thirds majority required to pass the budget in the 80-member house. In the 40-member Senate, Democrats only need two Republicans to vote with them.

If Democrats get the votes they need, it will be the first time in 14 years the state Legislature has approved a budget by its constitutionally mandated June 15 deadline. The fiscal year begins July 1.

To seal the deal, Democrats dropped their insistence on putting a measure on the November ballot that would lower the voter threshold for county voters to enact half-cent sales taxes for transportation. Current law requires a two-thirds majority to pass such a tax, but Senate leader John Burton, D-San Francisco, has championed a measure to lower approval needed to a simply majority.

Eighteen counties, including Contra Costa and Alameda, rely on the taxes, which expire after a set number of years and must be renewed to continue. Contra Costa County's half-cent sales tax generates $54.2 million a year and ends in 2009. Alameda County's tax brings in $90 million a year and terminates in 2002.

For more than a year, Burton has fought for the measure, saying that it is the only way to raise the billions needed to fix the state's ailing infrastructure.

The deal appeared to be a major defeat for Burton, who stuck by the measure over the objections of Gov. Gray Davis, who said transportation should not be paid for with new taxes.

Budget negotiators were still working out the details late Wednesday, but Democrat and Republican legislative leaders agreed on how to spend the $1 billion in gas sales taxes.

In the next five years, $600 million a year will go to the governor's congestion relief package, $160 million a year will go toward highways, $160 million a year to local streets and roads and $80 million a year to regional transportation, according to the agreement.

After the five years, the gas sales tax money will be split, with 40 percent going toward highways, 40 percent for local roads and 20 percent for public transportation. Also, the agreement contains provisions allowing the state to spend gas sales tax in other areas should the economy sour.

The governor's plan would help pay for putting a fourth bore in the Caldecott Tunnel, widening state Highway 4 from two to six lanes in East Contra Costa County, straightening Vasco Road and extending BART from Livermore to San Jose, as well as more than 100 other projects across the state.

The state budget includes $2 billion to begin work on the projects.

[ top of page ]

Home | About the Commission | Commissioner Biographies
News | Press Coverage | Testimony | Agendas
Meeting Schedules | Minutes | Links

Speaker's Commission on State/Local Government Finance
in collaboration with the
Metropolitan Forum Project
811 West Seventh Street, Suite 900
Los Angeles, CA 90017
(213) 629-9019