BILL ANALYSIS Ó
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Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
ACA 4
(Frazier) - As Introduced February 27, 2015
SUBJECT: Local government transportation projects: special
taxes: voter approval
SUMMARY: Reduces the voter threshold from two-thirds to 55% for
passage of local sales taxes dedicated to transportation
purposes. Specifically, this constitutional amendment :
1)Provides that the imposition, extension, or increase of a
special tax by a local government for the purpose of providing
funding for local transportation projects under its
jurisdiction requires the approval of 55% of the voters voting
on the proposition.
2)States that a special tax for the purpose providing funding
for local transportation projects is not deemed to have been
increased if it is imposed at a rate not higher than the
maximum rate previously approved in the manner required by
law.
3)Defines "local transportation projects" to mean the planning,
design, development, financing, construction, reconstruction,
rehabilitation, improvement, acquisition, lease, operation, or
maintenance of local streets, roads, and highways, state
highways and freeways, and public transit systems.
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EXISTING LAW:
1)Authorizes cities, counties, and special districts to impose a
general tax for general governmental purposes with the
approval of a majority of voters.
2)Authorizes cities, counties, and special districts to impose a
special tax for specified purposes with the approval of
two-thirds of the voters.
3)Authorizes school districts, community college districts, or
county offices of education to incur school bonded
indebtedness with the approval of 55% of the voters voting on
the bond measure, requires bond proceeds only be used for
purposes specified in the Constitution, and requires an audit
to ensure that the funds have been expended only on the
specific projects listed.
FISCAL EFFECT: Unknown
COMMENTS: Since 1923, California and the rest of the nation
has relied heavily on gas taxes to support its local streets and
roads and state highway system. Gas taxes have the benefit of
being fairly inexpensive to administer. Furthermore, until
recently, they have been a reasonably equitable means of
distributing the tax burden amongst drivers in rough proportion
to their use of the roadway system.
The gas tax is no longer a viable, sustainable revenue source,
however. According to the Institute on Taxation and Economic
Policy, two important developments have combined to greatly
reduce the functionality of the gas tax:
1)The purchasing power of gas tax revenues has declined
significantly due to inflation. If current tax rates, set in
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1994, remain unchanged through 2035, real gas tax revenues
will have declined by over 40%; and,
2)Improvements in vehicle fuel efficiency have cut directly into
gas tax revenues by allowing drivers to travel farther
distances while buying less gasoline. From an environmental
and energy policy standpoint, this is undeniably desirable.
Decreased fuel consumption reduces greenhouse gasses and our
dependence on foreign oil. But with vehicle fuel efficiency
set to nearly double in the next 20 years, gas tax revenues
will be cut nearly in half.
In the face of rapidly declining gas tax revenues, voters in
twenty counties throughout California have turned to imposing
special taxes for local transportation projects and programs in
their county. Collectively, these counties generate between $3
billion and $4 billion annually - money that is used for
transportation projects as identified and prioritized by each
county and ratified by the voters. These counties, referred to
as "self-help counties," have consistently provided reliable and
stable funding for transportation-funding that far outstrips
state and federal funding on an annual basis. They also have in
place:
1)Accountability measures.
2)Local elected oversight on taxpayer's dollars.
3)Expenditure plans that explicitly detail how funds will be
spent, allowing the public to fully understand where their
local transportation dollars go.
Despite the success of these self-help counties, a two-thirds
voter approval threshold is a near-impossible hurdle for other
counties that are aspiring to be self-help counties. As a
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result, these counties are deprived of much-needed funding for
transportation infrastructure, maintenance, and operations.
ACA 4 could benefit these aspiring counties as well existing
self-help counties whose existing special transportation tax is
due to expire. If ACA 4 secures the necessary votes for
passage, any county with a special transportation tax on the
ballot at the same time need only achieve the 55% threshold to
be successful.
Writing in support of ACA 4, the California Transportation
Commission points out that, "Sales tax investments, directed
towards local transportation needs, have proven to provide
tremendous benefit to the overall state transportation system.
Funds generated from sales tax measures serve to reduce
congestion, improve public transportation, and enable local
governments to better address the critical transportation needs
of the state."
Opponents argue that a tax imposed on a group of taxpayers,
rather than the general public, is worthy of a greater level of
voter sanction and, thus, the existing two-thirds vote
requirement is justified. They also argue that the two-thirds
vote requirement serves two other purposes: to force local
governments to justify a clear and critical need for a
particular public function or program; and 2) to hold local
governments to a higher level of accountability for taxes that
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are earmarked for specific purposes. Opponents fear that ACA 4
would undo these safeguards.
Previous legislation: ACA 23 (Perea) of 2012, was virtually
identical to this constitutional amendment. ACA 23 died on the
Assembly Third Reading inactive file.
Double-referred: This constitutional amendment will be referred
to the Assembly Revenue and Taxation Committee should it pass
out of this committee.
REGISTERED SUPPORT / OPPOSITION:
Support
California State Association of Counties
California Transit Association
California Transportation Commission
Glendale City Employees Association
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Move LA
Organization of SMUD Employees
Sacramento Metropolitan Chamber of Commerce
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Clara Valley Transportation Authority
Solano Transportation Authority
Ventura County Transportation Commission
Opposition
California Taxpayers Association
Air Logistics Corporation
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Associated Builders and Contractors of California
California Association of Realtors
California Retailers Association
California Tank Lines, Inc.
Orange County Business Council
Southwest California Legislative Council
California Chamber of Commerce
Chemical Transfer Company
Howard Jarvis Taxpayers Association
National Federation of Independent Business
West Coast Leasing, LLC
California Manufacturers and Technology Association
Orange County Taxpayers Association
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Superior Tank Wash, Inc.
West Coast Leasing, LLC
Analysis Prepared by:Janet Dawson / TRANS. / (916) 319-2093