Plan would reduce gas taxes, increase other taxes

Daily Sundial

California residents could be paying less for gasoline soon, but the catch is they might be paying more for other goods and services.

State Assembly Speaker Fabian N??ez (D-46th district) announced his “Building Opportunity” proposal April 5, which would cut taxes on gasoline by 11 cents per gallon, but would raise taxes on other goods by one-fourth of a cent.

The figures are set up in such a way that the total revenue generated would remain the same even after the taxes change. The difference is that under the new plan, all the money raised through gasoline taxes would be used to fund California transportation projects, as intended under Proposition 42.

Under Proposition 42, which passed in 2002, gasoline taxes were supposed to be used to fund transportation projects, but a provision stated that in the case of a financial emergency, the funds could be reallocated to the general state fund. Gov. Arnold Schwarzenegger used this provision to try and soften the blow of California’s recent budget shortfall.

Such provisions would not be included under N??ez’s plan, which would look to ensure the use of all gasoline taxes on transportation projects only.

“The taxes would go directly into transportation projects,” said Gabriel Sanchez, state assembly spokesperson. “On a $40 gas purchase, you would pay $2 less. On a $40 pair of shoes you would pay 10 cents more,” Sanchez said, using one of N??ez’s own examples to put the proposed tax swap into perspective.

Assemblyperson John Benoit (R-64th District) said he does not support N??ez’s proposal, and thinks it would be better to keep Proposition 42’s method in effect, using the current rate of gas taxes to fund transportation rather than shifting tax increases and decreases around.

“(The proposal) just didn’t make a lot of sense,” Benoit said.

Benoit said he feels the proposal came without any warning, which may later produce a lack of support. He said he is hopeful that at the May 10 proposal revision, the necessary changes will be made to allow California to use gasoline taxes on transportation-only projects.

Like Benoit, CSUN students are skeptical about the proposal.

“I don’t like that,” said Tim Bui, mechanical engineering graduate student. “It’s about the ratio of what you buy. You buy more things than just gas. You should either drive slower or get a (more fuel-efficient) car. I’d rather keep my sales taxes low.”

“It may (turn out to) be more expensive this way,” said Carlos Arteaga, civil engineering major.

In addition to cutting gasoline taxes, N??ez’s proposal would issue a $10 billion bond to be used for transportation projects and to pay back the money the governor took out of the Proposition 42 tax fund.

The proposal, if passed, would provide $53 billion for future freeway and highway construction projects, and is meant to reduce the general fund deficit by $4.5 billion over the next four years.