Business Buzz Reporter
The city of Holtville has received $1054 and $2861, respectively, in the first two installments of road funding from the state’s new gas and vehicle taxes.
While those may seem more like decent tax refunds than enough for street-repair projects often costing hundreds of thousands, or even millions, of dollars, a city official said the measure will soon pay better dividends.
“This fiscal year the estimate for us was $32,000. We weren’t expecting a lot this year,” City Manager Nick Wells explained. “Next year we should ramp up to $100,000. We’re adding it to the part of the puzzle” of street-repair funding.
For a city the size of Holtville, he added, it doesn’t take much to make a difference.
“Our biggest pot of money for transportation is from our LTA (Local Transportation Authority funding). That is somewhere around $475,000-$500,000 per year,” Wells said. “If they’re going to tack on another $100,000 on to that, it’s going to help.”
LTA monies come from the countywide, voter-approved Measure D half-cent sales tax.
The new monies are from the controversial Road Repair and Accountability Act of 2017, or Senate Bill 1. Its gas-tax increase took effect Nov. 1 and the vehicle-registration-fee increases on Jan. 1. A higher sales tax for gas will kick in July 1, 2019.
Supporters, including many local officials, argue the measures are vital to keeping streets safe and in good repair.
Opponents, including one regional farm organization, counter with concerns over accountability and the financial burden on businesses that use high amounts of fuel,such as farming and trucking. The Irvine-based Western Growers Association is gathering signatures to repeal the measure through a voter-approved ballot measure.
Municipalities, including Imperial County and its seven cities, to date have received approval from the California Transportation Commission to fund more than 150 road-repair projects under SB-1.The monies are coming in monthly installments from the State Controller’s Office. Just under $400,000 arrived in the Jan. 31 and Feb. 28 installments.
The returns are starting out small but will grow, a policy expert noted, because of how SB-1 is structured.
“SB-1 sort of staggered when the taxes and fees come online,” explained Kiana Valentine, a senior legislative representative for the California State Association of Counties, a private organization that advocates on behalf of its member counties, including Imperial.
“It’s only eight months of collection versus a full fiscal year and the price-based gas tax will reset on July 1, 2019,” she said.
California operates on a July 1-June 30 fiscal year, so the extra 12-cent-per-gallon gas tax that started Nov. 1 will have just eight months of collection in the current fiscal year, Valentine explaining. The added vehicle taxes that started Jan. 1 will have six months of collection.
The tax that begins in 2019 is a permanent resetting of the gas sales tax at 17.3 cents per gallon, Valentine said, adding that is important because it will remove the volatility of the prior tax formula.
“Revenues (for roads from the gas sales tax) were going down due to more fuel-efficient vehicles and the price of gas dropping. Counties were reporting cancelling road projects and staff layoffs, Draconian cuts,” she said.
SB-1 means El Centro will see the restoration of street-repair funds that eroded over the last few years, noted Abraham Campos, city engineer and interim public works director.
“The high was in 2013-14 and it started declining. By 2016-17 the gas-tax funds were $250,000 lower than 2013-14. It (SB-1) will make up for the shortfall,” Campos said.
El Centro received just under $30,000 in its first two SB-1 installments and Campos said it is expected $155,000 total will come in by June 30. But that will leap to $775,000 in the next fiscal year beginning July 1, he added.
“It will be helpful. I know there’s an effort to repeal it. It’s a terrible idea. Residents would see a faster deterioration of the streets. We see it as a user fee,” Campos said.