Why Not a Gas Tax? 

Voters are souring on sales taxes, so why not increase taxes on gasoline to pay for transportation projects?

This November, Alameda County voters will decide whether to increase local sales taxes to pay for a host of transportation projects throughout the East Bay. But recent statewide polling shows that California voters are souring on sales taxes as a way to raise money for government programs. One poll showed that 69 percent of Californians now oppose raising sales taxes to balance the state budget, while another revealed that only 30 percent approve of such a proposal. Dislike for sales tax hikes has become bipartisan as well — a majority of Democrats and a super-majority of independents have now joined Republicans in their opposition to them.

The recent statewide polling spells trouble for transportation funding in Alameda County, especially considering that a sales tax hike requires a two-thirds majority to pass. The polling also represents an apparent turnaround from previous support for sales taxes. A poll from last October, commissioned by the Alameda County Transportation Commission (which put the sales tax measure on the November 2012 ballot), found that 79 percent of county voters said they back the extension of the current half-cent Measure B sales tax, plus a half-cent increase. That polling, however, now appears to be out of date.

Tess Lengyel, spokeswoman for the transportation commission, said the agency plans to conduct another poll in May. She said she had not seen the recent statewide Field Poll or the one from Public Policy Institute of California, which showed voters' strong opposition to sales tax increases. The November sales tax proposal in Alameda County would finance $7.7 billion of transportation projects over the next thirty years, including $3.7 billion for mass transit and $3 billion for street, road, and highway repairs.

Voters' growing dislike sales taxes is not surprising. Sales taxes are perhaps the most regressive way to raise revenue because they impact low- and middle-income families the most. Low-income workers are hit particularly hard because they spend much more of their earnings on items subject to sales taxes. When including sales taxes, low-income families in California actually pay a higher total tax rate than the wealthy — 10.2 percent versus 7.4 percent, according to a study by the nonpartisan Institute on Taxation and Economic Policy.

In addition, the Occupy movement has helped raise public awareness about the growth of income inequality nationwide, and the country's deeply unfair tax and economic policies. Voters are voicing stronger support for tax-the-rich proposals than in any time in recent memory, while the popularity of taxes on the 99 Percent has nosedived. The Field Poll released last week showed 63 percent approval for the so-called Millionaire's Tax, a proposal that targets those who make more than $1 million annually.

But because of Prop 13 and other anti-tax laws, California counties have limited choices for raising revenues beyond sales and general property taxes. Alameda County, for example, is prohibited under state law from enacting its own tax on the rich — although voters are allowed to do so on a statewide basis.

So if county voters won't approve a sales tax hike for transportation, what other taxes might they support? The Institute of Taxation and Economic Policy, which studies tax practices in all fifty states, is a proponent of gas taxes to fund transportation. Gas taxes — although regressive, too — also are preferred by many economists because they're akin to user fees. That is, if motorists want better roads to drive on, then it makes sense that they should pay for them through a tax on gasoline. "That's a specific advantage that gas taxes have," said Carl Davis, senior policy analyst for the institute. "Gas taxes line up better."

They certainly line up better than sales taxes. After all, why should a Berkeley or Oakland resident who walks or bikes to work pay higher sales taxes on clothing and other necessities to finance a road project in Livermore?

Gas taxes also make sense from an environmental perspective. Taxes on gasoline consumption work as a strong disincentive to driving, prompting more commuters to walk, bike, or take mass transit, which in turn, will lower greenhouse gas emissions.

The problem is that Californians have an irrational hatred for gas taxes — even though consumers spend less of their annual incomes on them than on sales taxes. So why are they so unpopular? Davis theorized that it could be because gas prices play such a major role in our culture. Gas price signs are posted prominently at every gas station, and people often drive around in search of the best deals. The mainstream press is obsessed with gas prices, too, particularly when they go up. Both the San Francisco Chronicle and the Oakland Tribune ran front-page stories over the weekend on rising gas prices, and openly speculated about whether they will harm President Obama's reelection bid. No other consumer product receives such attention.

Fifty years from now we'll probably look back on 2012 as being absurd: first, for the widespread belief that presidents can affect gas prices; second, for the fact that our dependence on fossil fuels and gas prices impacted our vote for president; and third, that we're less willing to pay higher gas taxes than sales taxes to fund transportation.

Unfortunately, all of those things are true. And so gas taxes don't poll well, Lengyel noted. Our opposition to gas taxes also is ingrained in state law. For example, if a county wants to raise gas taxes, it must get approval from cities first before it can go to voters — an extremely high bar. The one possible avenue is to raise gas taxes throughout the region. Under state law, the Metropolitan Transportation Commission has the authority to put a gas tax measure on the ballot for the entire Bay Area. The MTC, however, has declined to do so because of voter opposition.

As a result, more funding for transportation may be doomed this year, and possibly for years to come — unless voters begin to realize that gas taxes deserve a second look, and that our ridiculous dependence on fossil fuels must end. 

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