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Decision '94 / SPECIAL GUIDE TO CALIFORNIA'S ELECTIONS : Propositions : 185: Gas Tax Increase : WHAT IT IS

October 30, 1994

Proposition 185, a proposed statute initiative authored by the Planning and Conservation League environmental group, would impose a 4% sales tax on gasoline to finance mass transit and other transportation projects. The tax would go into effect Jan. 1. Though similar to some of the aims of Proposition 181, Proposition 185 is not part of the larger rail scheme envisioned for the state in 1989.

* Taxes: Consumers now pay a sales tax on gasoline that varies by county from 7.25% to 8.5%. By adding the new tax, Proposition 185 would increase those taxes to totals ranging from 11.25% to 12.5% of the purchase price. The sales taxes are levied on top of an 18-cents-per-gallon state gasoline tax and an 18.4-cents-per-gallon federal gasoline tax.

* Spending: Proposition 185 provides specific guidelines for the allocation of funds raised by the increased sales tax. Of the new revenue, 47.5% would be devoted to transit capital projects such as buying passenger coaches, 25.5% to transit system operations, 15% to earthquake safety and retrofitting, and 2% each to bicycle and pedestrian facilities, electric and clean fuel vehicle research and development, traffic signal synchronization, environmental mitigation, and highway and railroad grade separation projects. Fog-related safety projects and ride-sharing programs would each get 1% of the fund.

Funding for earthquake safety projects would expire in 2000 and for clean fuel vehicle research in 2010.

The measure further specifies how transit capital improvement funds are to be spent by setting priorities and earmarking certain amounts for particular projects. For example, it gives first priority to the financing of a high-speed (150 m.p.h.) coastal rail line between Los Angeles and San Francisco by allowing up to 10% of the capital improvement funds to be spent on the construction of the route. Other priority projects include improvements to the Alameda corridor rail line that connects the Los Angeles and Long Beach harbors with Downtown Los Angeles; improvements to intercity and commuter rail in Riverside and San Bernardino counties, and improvements to the Los Angeles-San Diego rail corridor.

Proposition 185 also provides up to $5 million for a Yosemite shuttle service and a Lake Tahoe/Truckee transit system.

* Revenue: Proposition 185 would generate about $630 million a year for transportation projects. The increased cost is expected to cause some reduction in gasoline usage by motorists, decreasing total gasoline and sales tax revenue by about $15 million a year.

* Administration: The measure requires the establishment of a three-member committee of the California Transportation Commission to distribute all state funds for rail projects. It specifies that no more than 20% of the money it raises can be used for administrative overhead.

ARGUMENTS FOR

With the new monies available, Proposition 185 would make it easier for more people, particularly senior citizens and those with disabilities, to use mass transit. The result would be fewer cars on the road and therefore less congestion, reduced air pollution and energy savings. The money Proposition 185 would pump into new construction would create jobs and help spur California's economic recovery.

Oil companies pouring hundreds of thousands of dollars into the attempt to defeat the proposal have a single aim: to keep people in their cars so they will continue to buy gasoline.

ARGUMENTS AGAINST

Californians are overtaxed and Proposition 185 would only make that worse by increasing the cost of an essential commodity, gasoline.

Proposition 185 ignores California's real transportation needs, and instead would pour money into the pet projects of the Planning and Conservation League and its contributors. Southern Pacific Railroad, which owns the right of way to the coastal route for the high-speed rail line, has donated heavily to the league's campaign and would benefit financially from Proposition 185's passage.

WHO SUPPORTS IT

Planning and Conservation League, Sierra Club California, California League of Women Voters, Coalition for Clean Air, Congress of California Seniors, General Electric Co., Southern California Edison, ports of Long Beach and Oakland, Morrison Knudsen Corp., Southern Pacific Railroad, American Assn. of Retired Persons, California Assn. of Persons with Handicaps and Yosemite Restoration Trust.

WHO OPPOSES IT

California Transportation Commission, California Taxpayers Assn., California Business Alliance, California Highway Users Conference, Senate Transportation Committee Chairman Quentin L. Kopp (I-San Francisco), Assembly Transportation Committee Chairman Richard Katz (D-Sylmar), Howard Jarvis Taxpayers Assn., Union Pacific Railroad and Alliance of California Taxpayers and Involved Voters.

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