President Biden’s Proposal to Suspend State Gas Taxes Would Cause California to Lose Nearly $30 Billion in Economic Activity
Sacramento – As California Governor Gavin Newsom and state legislators work to find solutions to provide consumers immediate financial relief, advocates and labor leaders are calling on them to move forward with a proposal to provide rebates to all Californians. By contrast, the groups also say that President Biden’s proposal asking states to suspend gasoline related user-fees and the transportation projects they support is extremely short-sighted, and will only send billions back to big oil companies while hurting the state’s economy and infrastructure.
“California’s leaders are on the right track with their proposal to give rebates directly to consumers in this state,” said Joe Cruz, Executive Director of the California State Council of Laborers. “The White Houses’ plan for states, on the other hand, would be disastrous for our economy, our job market and the thousands of infrastructure projects already underway to fix our deteriorating roads and bridges.”
Economists, labor leaders and transportation experts agree that zeroing out the state’s gas tax would largely benefit oil producers, while providing little to no relief to consumers at the pump.
“There’s no enforceable way to ensure that a single penny from a gas tax reduction would go back to consumers, and there’s plenty of evidence showing that big oil companies have a long history of using those additional profits to fill their own coffers,” said Mark Watts, Legislative Advocate of Transportation California.
“The idea of losing more than 100,000 good-paying jobs fixing our roads and bridges and critical infrastructure so that oil companies can pocket more money is absurd and unacceptable,” said Kiana Valentine, Executive Director of Transportation California. “The proposal to give consumers direct relief through a tax rebate is the only way to ensure that hard-earned taxpayer money isn’t going to be syphoned away by big oil companies at the pump.”
In fact, evidence shows that proposals to divert money at the gas pump would harm critical elements of the California economy and infrastructure, including:
- Halting $7 billion worth of transportation projects – Thousands of projects would be delayed or cancelled outright in every city and county.
- $30 billion in lost economic activity – Every $1 invested in transportation infrastructure nets $4.30 cents in economic activity
- 105,739 living wage jobs lost in one-year – Every $1 billion in infrastructure investment creates 15,000 jobs
In 2018, voters reiterated their support for approximately $5.4 billion of ongoing funds annually to maintain, improve, and make safer California’s streets, roads, and bridges, relieve congestion, increase goods-movement, and provide more transit, bicycle and walking options.
According to the California State Transportation Agency, there are over 8,000 multimodal transportation improvement projects underway to enhance safety and mobility in every California community.
- 5,846 maintenance and rehabilitation projects on state highways and local streets and roads
- 1,652 projects to improve safety for drivers
- 405 bridge projects
- 361 congestion relief projects
- 1,554 bicycle and pedestrian safety projects
- 1,174 transit projects, including bud and rail investments
“We can’t afford to interrupt California’s source of sustainable transportation funding just as we are making progress toward fixing some of California’s most unsafe roads and bridges,” Valentine added.
To learn more about what local projects near you are created with ongoing transportation investments, please visit our Transparency and Accountability Page.
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