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A $5 billion tax cut? Why one state said, 'no thanks'

It was little noticed on Election Day, but about 12 percent of U.S. voters were given an opportunity on Nov. 6 to approve a tax cut amounting to a whopping $5 billion a year. Their decision? They just said no — overwhelmingly. By a roughly 56-44 margin, Californians decided they’d stick with the state’s gas tax, one of the highest in the nation, rather than repeal last year’s increase and potentially threaten tens of billions of dollars in road and transit upgrades.

The failure of Proposition 6 wasn’t just a case of a blue state acting blue. Even in the heart of the state’s anti-tax country, support of Proposition 6 was lukewarm. In San Diego County where Reform California, the measure’s chief backer, is headquartered, it barely passed, 52-48. And some of the staunchest defenders of the gas tax proved to be business groups who feared clogged highways and a loss of planned transit projects (including connections for the 2028 Olympics in Los Angeles) more than they hated paying an extra 12 cents per gallon at the pump.

Californians could easily have gone the other way. The most recent gas tax increase was approved just last year, so the direct benefits haven’t yet been felt. Motorists already pay some of the highest gasoline prices in the nation — AAA pegs the current price for regular unleaded in California at $3.68, second among states to Hawaii’s $3.88 and far above a national average of $2.68. The high price is a product of the state’s second-highest-in-the-nation gas tax (behind only Pennsylvania) and unusually tough anti-pollution standards. But the landslide rejection of the gas tax repeal proved a larger margin than Dianne Feinstein’s reelection’ its 5,142,217 “no” votes surpassing the veteran U.S. Senator’s 4,491,633.

The lesson here is that raising the gas tax doesn’t lead to death at the ballot box. Rare is the voter who punishes an elected official for doing something meaningful about traffic congestion. And that’s exactly what raising the gas tax is about — investing those dollars in filling potholes, widening roads, creating new light rail lines and resurfacing freeways. After all, what good is slightly cheaper gas if a driver is destined to exhaust his fill-up by idling in traffic?

And there’s one more argument that’s made gas tax increases even more attractive in recent years: the need to conserve fossil fuels and combat climate change. The gas tax isn’t just a primary method of financing transportation infrastructure — also known as a “user fee” — it’s a market-based way to reduce carbon emissions. The more expensive a gallon of gasoline or diesel fuel becomes, the greater the incentive for people to buy fuel-efficient vehicles, drive less and take alternative transportation more. And this fall with its deadly wildfires has demonstrated just one more reason for Americans to get serious about global warming and its destructive effects.

It’s a safe bet that this will go unnoticed by Republicans in Washington who only see one side of the equation. Pro-Proposition 6 forces touted tax savings, claiming a “typical family of four” would save nearly $800 annually if it was approved, ignoring the offsetting costs associated with climate change or even air pollution and traffic congestion. This kind of penny-wise, dollar-foolish mentality is a prime reason why the federal gas tax has been stuck at the 1993 rate of 18.4 cents per gallon, not only shortchanging federal transportation funding but causing Congress to back-fill with money from elsewhere in the budget. And given the nation’s budget deficits, that amounts to borrowing money from foreign countries like China to pay for U.S. roads.

President Donald Trump has shown interest in infrastructure, most recently mentioning it as an area where Republicans and Democrats might reach some agreement. Earlier this year, he even floated the idea behind closed doors of doubling the federal gas tax (a prospect that seemingly went nowhere with his GOP brethren in Congress). Might he try again with the new Congress? One can only hope that California’s experience will prove instructive. The American Society of Civil Engineers has estimated the U.S. must come up with $4.5 trillion by 2025 not only to fix roads and bridges but dams and other aging infrastructure. A gas tax would go a long way toward meeting that goal and keeping U.S. businesses competitive and able to get their goods to markets, both foreign and domestic. It’s not the only step to fixing infrastructure but it might be the most important one that already has an endorsement from one in eight Americans.

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