March 29, 2017 / 10:28 PM / 2 years ago

California would increase fuel taxes under $52 billion road repair plan

SACRAMENTO, Calif. (Reuters) - California would increase gasoline taxes and other transportation-related fees for the first time in decades to fund an ambitious $52 billion plan to repair the state’s sagging infrastructure under a deal announced Wednesday.

FILE PHOTO: Gasoline drips off a nozzle during refueling at a gas station in Altadena, California March 24, 2012. REUTERS/Mario Anzuoni

The deal between fiscally moderate Democratic Governor Jerry Brown and leaders of the majority Democrat legislature would increase the excise tax on gasoline by 12 cents per gallon from the current $0.28, and on diesel fuel by 20 cents per gallon, among other fees, over 10 years to pay for repairs to roads and bridges as well as for anti-congestion projects.

“Let’s be clear - our roads suck,” said Assembly Speaker Anthony Rendon, who represents blue-collar suburbs south of Los Angeles at a news conference announcing the deal. “Our bridges are crumbling and traffic takes time away from our families. Delays cost businesses money.”

California’s transportation systems have languished unrepaired and unexpanded for decades, as budget constraints and politics have stymied plans by Democrats and Republicans alike.

Brown, a fiscal moderate credited with bringing the state back from a $27 billion budget gap, has refused to sign on to plans that involve borrowing money, and Republicans and some moderate Democrats have resisted raising gasoline taxes.

But the same Democratic wave that led California to go two-for-one in favor of former presidential candidate Hillary Clinton last November gave the party a two-thirds majority in both houses of the legislature, enough to pass new taxes without Republican support.

The deal won support of construction companies and labor unions, and Democratic lawmakers on Wednesday put up a unified front on what had been a divisive issue over raising taxes.

Under it, owners of electric vehicles would have to pay a $100 fee to help repair roads even though they don’t use gasoline and would not pay the gas tax. The fees and taxes would raise about $5.2 billion per year.

Republicans condemned the plan, saying transportation taxes and fees were already among the highest in the country.

“The transportation proposal announced by the Capitol Democrats is a costly and burdensome plan that forces ordinary Californians to bail out Sacramento for years of neglecting our roads,” Republican leaders said in a joint statement.

Their opposition means that if even a few moderate Democrats defect, the package could fail. Brown urged support.

“This is like fixing the roof on your house,” the governor said. “If you don’t fix the house, your furniture will be ruined. The rug will be destroyed. The wood will rot.”

Reporting by Sharon Bernstein; Editing by James Dalgleish

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