Governor Brown held a signing ceremony on Treasure Island in San Francisco for an extension of cap-and-trade legislation.
"California has a massive backlog of broken infrastructure that has been neglected far too long," said Gov. Jerry Brown.

PHOENIX – California's Democratic leaders announced an agreement on a five-year, $52.4 billion transportation infrastructure spending package.

The plan would raise roughly $5 billion in new annual revenue through a variety of tax increases and fees. It would hike the diesel sales tax and excise tax, raise the gasoline excise tax by 12 cents per gallon, impose a new annual "transportation improvement fee" based on the value of a vehicle, and create an annual $100 zero emission vehicle fee commencing in 2020.

The plan, announced late Wednesday, represents an agreement between California Gov. Jerry Brown and the Democratic legislative leaders, Senate President pro Tempore Kevin de Le-n and Assembly Speaker Anthony Rendon.

"California has a massive backlog of broken infrastructure that has been neglected far too long," said Brown. "Fixing the roads will not get cheaper by waiting - or ignoring the problem. This is a smart plan that will improve the quality of life in California."

Republicans oppose the plan, but the Democrats' legislative supermajorities allow them to move forward without them as long as their caucus holds together.

The Road Repair and Accountability Act of 2017 is built on the architecture of the existing Senate Bill 1 sponsored by Sen. Jim Beall, D-San Jose. It quickly won the support of local governments, which stand to receive a sharp boost in road funding under the plan. The plan would split the money evenly between the state and local governments, and has the backing of local government groups, businesses, and other transportation investment advocates who have long been calling for California to take meaningful steps to fund its infrastructure.

The legislature was close to passing a similar plan last year, but backers were unable to wrangle enough support for it before the legislative session ended. Brown and legislative leaders now say they want to pass a transportation bill by April 6.

"Californians are sick and tired of driving on bad roads and we are all paying the cost of disrepair, traffic congestion and unsafe roads, bridges and other transportation infrastructure," said Carolyn Coleman, executive director of the League of California Cities.

"We want to thank the Governor and Legislative leaders and encourage all members of the legislature to pass this responsible plan by April 6," she said.

"Transportation funding has been a county priority for more than three years, so we are gratified to see this legislation gaining traction," said California State Association of Counties second vice president Virginia Bass, a Humboldt County supervisor.

Republicans reacted negatively to the package, characterizing it as an irresponsible tax increase substituting for fiscal responsibility and calling on lawmakers to reject it.

"Californians already pay some of the highest gas taxes in the nation. The transportation proposal announced by the Capitol Democrats is a costly and burdensome plan that forces ordinary Californians to bail out Sacramento for years of neglecting our roads," legislative Republicans said in a joint statement. "This proposal would include the largest gas tax increase in state history, which will continue to rise over time, and a massive increase to the diesel tax and vehicle license fee. Our state has become increasingly unaffordable for ordinary Californians. We can fix our roads and bridges by simply ensuring that the billions of dollars that drivers are already paying in transportation fees and taxes are actually used for transportation purposes, rather than being swept into the state's General Fund."

California has not increased the gas tax in 23 years, and Brown's office said the measure would cost most drivers less than $10 a month. Democrats also contend that the bill has "strict accountability measures" to ensure that the new funds can only be spent on transportation.

Leadership in both the Assembly and Senate expect the measure will come up for a vote by the April 6 target date.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.