State Legislature Ready to Push New $7.4 Billion Transportation Bill

In an effort almost a year in the making, the Governor and the state legislature are getting ready to move a $7.4 billion transportation bill to address deferred maintenance on the state highway system and local street and road system.   They will fund this bill by increasing fuel taxes, levying an additional new motor vehicle tax and increases annual vehicle registration fees.  Proposed measures include: 

  • 17 cents per gallon increase in the motor vehicle fuel tax
  • 30 cents per gallon increase in the diesel fuel excise tax  
  • Increase the sales and use tax on diesel fuel by 3.5% from the current 1.75% to 5.25%
  • $38.00 increase in the annual vehicle registration fee
  • A new $165.00 annual vehicle registration fee attributable to zero emission vehicles  


Furthermore, moving forward these increases will be tied to the California Consumer Price Index.   The bill also creates the independent Office of the Transportation General (“Independent Office”), which would be a separate governmental agency designated to oversee all state agencies expending state transportation funds, including the Department of Transportation, High-Speed Rail Authority, Department of California Highway Patrol, Department of Motor Vehicles and State Air Resources Board.  The bill will alter funding allocations to the Air Resources Board by continuously appropriates 20% of the annual proceeds collected by the Air Resources Board from Cap and Trade auctions to the Transit and Intercity Rail Capitol Program and 10% of the annual proceeds to the Low Carbon Transit Operations Program.  The Association will be watching and opposing this legislation.  With the need for a two-thirds majority to pass tax and registration increases, it will be difficult to secure the needed republican votes in this session.  If the bill is not passed during the special session, but the democrats gain a super majority in the assembly and senate, we can anticipate an attempt to pass a similar transportation bill next session.  Stay tuned!