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Some businesses back higher gas taxes in California

Crude oil prices are way down, but gas prices at the pump have barely budged.
Ed Joyce/KPCC
Newport Beach Chevron gas station prices on December 21, 2012

The governor’s $3.6 billion transportation spending package to fund repairs of California’s dilapidated roads failed to pass this week, but it may get another chance during a continuing special session of the legislature.

When it, or a successor compromise plan, does return, it's likely to have the continuing support of prominent business groups, according to Kathy Fairbanks of Fix Our Roads, a coalition of business, local government and unions. Fix Our Roads had earlier supported a $6 billion plan.

Businesses aren’t known for their support of tax increases, but the California and Greater Los Angeles Area chambers of commerce are among the groups rooting for more revenue to help Caltrans catch up on some $59 billion worth of deferred maintenance to roads and bridges.

In return, the Fix Our Roads coalition wants California to change how it funds transportation, says Orange County Business Council CEO Lucy Dunn. For one, businesses want transportation taxes and fees to be strictly reserved for transportation projects, she says.

Some $900 million in transportation funds was borrowed for other uses to prop up California’s recession budget several years ago, and there are calls for the money to be returned to transportation accounts.

Among the proposed changes Dunn says she wants to see is a “constitutional amendment so that the funding raised does not get diverted to other purposes.”

The bottom line for businesses, though, is that they need good roads.

“Without goods movement and people able to get to their jobs or deliver their services, the California economy suffers,” Dunn says.

Californians pay 42.35 cents per gallon in state taxes and fees, plus 18.4 cents per gallon in federal gas tax. Every 1 percent in additional state gas tax would raise about $150 million, according to the state Legislative Analyst’s Office. Every percentage point added to the state vehicle registration fee would add $3 million to $3.5 million to the state budget.