New gas taxes, vehicle fees boost California's road repair budget

New gas taxes will show up in gas prices starting in November.
New gas taxes will show up in gas prices starting in November.
Saul Loeb/AFP/Getty Images

Gov. Jerry Brown’s revision of the California state budget adds $1.68 billion more in spending over 2016-17, with much of the increase for transportation thanks to a major highway repair bill that squeaked through the Legislature in April.

The new dollars raised by new taxes on gasoline, diesel and new vehicle fees will be split between state and local governments for transportation projects. Californians will start paying the new gas taxes before year's end and new vehicle fees in 2018.

The bill known as SB1 will provide about $52.4 billion over the next decade. Because the new fees and taxes start being collected nearly halfway through the budget year, they will generate $2.8 billion in new funding the first year and about $5.4 billion in subsequent years.

The governor’s original  budget proposal called for less — about $43 billion over 10 years.

When do we start paying new fees and gas taxes?

The new transportation taxes take a couple of different forms. The new gas tax takes effect Nov. 1, so that’s when drivers will see a bump of 12 cents per gallon. Diesel fuel tax goes up 20 cents a gallon, plus an additional 4 percent sales tax. 

On top of new taxes at the pump, Californians will also pay more at car registration time starting Jan. 1. The new vehicle  fees — there are two of them — are supposed to go to road repairs.

One, called a "Transportation Improvement Fee," is based on a car's value — from $25 for an aging econobox, to $175 for a luxury ride. Most car owners will pay less than $50 a year, state officials said.

The other fee is only for zero-emissions vehicles like those that run on electric batteries or compressed natural gas. Owners of those vehicles will be charged $100 a year starting in 2020 to help make up for what they don’t pay in road repair money at the gas pump. That should raise about $19 million a year.

Advocates of SB1 said the new taxes will cost the average driver about $10 more a month.  High-volume commuters and people who own more expensive vehicles will be paying more.

The existing vehicle registration fees have been going to DMV administration and the California Highway Patrol, not road repairs. Those existing fees remain in place.

When will the new money start being spent on roads?

The first money from higher gas taxes should be available to the state in about December.

The governor’s budget language says Caltrans, cities and counties will accelerate their road repair plans to decide what projects to fund. Some grants could be coming from the California Transportation Commission and State Transportation Agency by spring 2018.

It's unclear whether a list of $1.5 billion in projects that had met criteria for state funding but were then shelved last year because of a lack of money will be rehabilitated once the new funding materializes. A transportation commission spokesman said the process of approving projects would begin anew, starting with local recommendations to the state.

Two Riverside area Democrats — Assemblywoman Sabrina Cervantes and state Sen. Richard Roth — parlayed their “yes” votes for the tax into $427 million in new projects earmarked for Riverside County. That's in addition to whatever the region would receive under normal distributions of the new taxes and fees, said John Standiford, deputy executive director of the Riverside County Transportation Commission.

The funding is for a ramp connecting the new 91 Freeway express lanes in Corona with northbound Interstate 15, plus a new interchange at I-15 and Limonite Avenue serving Eastvale and the Jurupa Valley. There’s also a bridge over the Santa Ana River at Hamner Avenue in Norco.

The Limonite interchange could be under construction by early next year, Standiford said.

Any other sources of new road money?

Under the governor’s budget, the state general fund would repay a total of $706 million over the next three years that it borrowed from the state highway fund to cover other spending during lean years.

There’s also a pledge to achieve “Caltrans efficiencies” to save $100 million a year. To help achieve that, the governor’s budget appoints a new inspector general's office to audit Caltrans operations and find savings and efficiencies in its operations.

The gas tax has been criticized by Republicans in the state Legislature. Assemblyman Travis Allen, a Republican from Huntington Beach, is backing a ballot measure for next year’s ballot that would overturn SB1 if passed. It would need nearly 366,000 signatures to get on the ballot.