California’s Gasoline Sales Taxes To Reduce Budget Deficit?

Word is that $1.4 billion could be diverted from Proposition 42 funds - something voters thought was not going to happen with passage of Prop 1A in 2006.

By Loren Faulkner -- Associated Construction Publications, 7/21/2008

Urgent warnings over the weekend came from Transportation California www.transportationca.com and other construction groups that voter approved gasoline sales tax funds – designated solely for highway and infrastructure work – are now up for grabs. Lawmakers are desperate to find ways to plug a record $15.2 billion 2008-2009 fiscal budget deficit.

Serious Economic Issue

In a letter to California’s construction industry, Transportation California said:

This raid would be a disaster for California. It would undermine the economy and cost upwards of 40,000 jobs. It would undo all of the progress made with the passage of Proposition 1B. Diverting transportation funds is a surefire way to virtually guarantee a deep recession in California that may last for years.

This group and The Engineering & Utility Contractors Association EUCA www.euca.com are urging Californians to contact their state representatives to remind them that:

• Borrowing gas tax funds that must be repaid in three years is no way to fix a structural deficit.  It only papers over the problem, plunges the state further into debt and increases costs to the state. 
• Raiding transportation and transit funding breaks faith with 77-percent of voters who passed Prop. 1A in 2006. With Prop. 42 in 2002 and again with Prop. 1A in 2006, California voters have made it abundantly clear that they do not want the state raiding funds intended for transportation and transit improvements.
• Cutting transportation and transit funding now will mean the death of many high priority projects. The longer we wait on these transportation projects, the more costly they become. 
• Raiding transportation and transit funds will eliminate thousands of jobs and stall economic growth at the worst possible time.  Raiding transportation funds will further destroy an already struggling industry and severely hamper any hope of an economic recovery.
• The burden on taxpayers will be much greater if needed projects are delayed or cancelled. With prices rising and our infrastructure allowed to deteriorate, taxpayers will end up paying through the nose for work that should be done now