The California Alliance For
Sprawl Jobs is looking to pass a VLF tax increase. Their ballot initiative would raise $3 billion annually in new revenues. Their expenditure plan, however, is extremely lopsided in that 90% of these funds would go to streets and highways. The remaining 10% would go for transit. Bikes/peds would not receive any funding.
If that sounds bad, it is actually worse when you consider the history of California’s VLF.
The VLF is really nothing more than a personal property tax. Until 2003, VLF revenues went into the General Fund (like any other property tax) and would be distributed to counties for health and welfare programs. The VLF allocation used a complicated formula to set the tax rate based on the health of California’s General Fund:
Under the law, local governments are “backfilled” by the state general fund for any loss of revenue due to VLF reductions. In 2004-05, this backfill will amount to $3.9 billion. The law has always contained provisions that if state general fund revenues are insufficient to fund this taxpayer subsidy, then the offset would be removed and the effective taxpayer rate would return to its 1998 level. On June 19, 2003, the California State Controller and Director of Finance made findings of insufficient revenues and the effective MVLF rate went from 0.65% to 2%.
A VLF “increase” occurred during the Gray Davis recall election. Schwarzenegger seized on the VLF tax during the recall. His first act in office was to reduce the VLF to .65%. However, that left a $3+ billion hole in the General Fund. This lost VLF revenue was one of culprits of what became a decade-long budget stalemate in the Legislature.
So now comes along the Alliance for Sprawl with a plan to partly restore the VLF. They are calling it new revenue for road “maintenance” — but really it is a transfer from health and welfare programs to highway construction.