Environment & Energy Report

California Republicans Bank on Gas-Tax Repeal to Boost Turnout

Oct. 29, 2018, 10:46 AM

A California ballot measure to reverse $54 billion in revenue increases Democrats enacted in 2017 to fund road, bridge, and transit repairs may be about more than potholes and taxes.

Republicans in California’s congressional delegation, including Reps. Kevin McCarthy, Devin Nunes, and Mimi Walters, see the repeal effort as a way to energize the party’s voters.

The anti-tax message of the campaign could rally Republican voters, especially in Orange County and other GOP pockets where Democrats have targeted House races in their efforts to flip the House.

It’s also a rallying cry for John Cox, an underdog in the gubernatorial race against Lt. Gov. Gavin Newsom (D) to replace termed-out Gov. Jerry Brown (D). The repeal campaign has raised $4.7 million.

Opponents of the measure have raised $43 million, with major backing from the State Building and Construction Trades Council of California and the League of California Cities. They argue the infrastructure projects are overdue, and the funding to fix them is crucial to the state’s economy.

“Should we eliminate the 6,500 projects that are already under way to our roads and our bridges and our transportation system?” Matt Cate, a spokesman for the opposition campaign, said at the Sacramento Press Club in October.

Proposition 6 targets the November 2017 increases, which included a 20-cents-per-gallon excise tax on diesel, a 5.75-cents-per-gallon sales tax on diesel, and 12 cents per gallon in sales tax on gasoline. The measure would make future increases more difficult by declaring that gasoline or diesel taxes imposed after Jan. 1, 2017, can’t take effect without voter approval.

Brown has called Proposition 6 a “flawed and dangerous measure pushed by Trump’s Washington allies.”

Elsewhere in the Nov. 6 election, proposals in Missouri and Utah ask voters whether to increase gas taxes, and a measure in Oklahoma asks if part of the state’s revenue from the oil and gas industry should be put into a trust fund.


Missouri drivers could see an increase the state’s gas tax for the first time since 1996.

The Missouri ballot measure, Proposition D, would raise the gas tax in annual 2.5-cents-per-gallon increments over four years, producing an estimated $288 million in state funds and $128 million in local funds when fully implemented.

That amount, while substantial, would only begin to help Missouri address its unmet transportation needs, according to the Missouri Department of Transportation. In a 2017 report to the Legislature, the department said it would take around $825 million per year to fully fund the system.

Proposition D has support from across the political spectrum, including from Gov. Mike Parson (R), who has been campaigning for it across the state.

Missouri’s current gas tax, at 17 cents per mile, is the second lowest in the U.S.


The Utah Legislature will ask voters whether the state should also bump up its gas tax to fund education and local roads.

The measure, Advisory Question 1, asks whether state motor and special fuel tax rates should be increased by an equivalent of 10 cents per gallon. The current rate is 29.4 cents per gallon, set to rise to 30 cents a gallon Jan. 1, according to the Utah State Tax Commission.

The nonbinding opinion question was referred to the general election ballot by a 24-4 vote in the Utah Senate and a 55-17 vote in the Utah House during the 2018 session of the state legislature (H.J.R. 20).

Public education is frequently listed as the top concern of Utah residents, the resolution said. In addition, roughly $600 million is taken from the state’s general fund every year to subsidize the Transportation Fund.


A proposed Oklahoma ballot measure is asking voters for their consent to squirrel away a fraction of the state’s revenue derived from oil and gas production into a trust fund.

State Question 800 would amend the state’s constitution to require 5 percent of the collections from the gross production tax to be deposited into the Oklahoma Vision Fund. The measure arrived on the ballot following the Legislature’s passage of Senate Joint Resolution 35 earlier in the year.

If approved by voters, the new fund could see a deposit in the $50 million to $60 million range annually, depending on energy prices, according to an estimate by the Oklahoma Policy Institute (OK Policy).

David Blatt, executive director of OK Policy, told Bloomberg Environment the measure is likely to resonate with the state’s electorate.

“Oklahoma voters will likely agree that setting aside a modest portion of the revenues from energy production is good stewardship that should allow the state to be better prepared for economic and energy changes in the decades ahead,” Blatt said in an Oct. 23 email.

If successful at the ballot box, deposits into the fund would begin July 1, 2020.

To contact the reporters on this story: Laura Mahoney in Sacramento, Calif. at lmahoney@bloomberglaw.com; Christopher Brown in St. Louis at ChrisBrown@bloomberglaw.com; Tripp Baltz in Denver at abaltz@bloomberglaw.com; Paul Stinson in Austin, Texas at pstinson@bloomberglaw.com

To contact the editor responsible for this story: Greg Henderson at ghenderson@bloombergenvironment.com

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