13 sales tax on gas
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CUPEIQ1NO
City Hall
10300 Torre Avenue
Cupertino, CA 95014-3255
(408) 777-3212
FAX: (408) 777-3366
COMMUNICATION
SUMMARY
Agenda Item ~
Date: February 27, 2006
Subject: Adopt a resolution in support of a state constitutional amendment dedicating the
existing state sales tax on gasoline to fund transportation projects.
Background:
In 2002, nearly 70% of California voters passed Proposition 42, dedicating the existing
state sales tax on gasoline to fund transportation projects like congestion relief, road
repairs, transit and safety improvements. However, Prop. 42 includes a provision that
allows the legislature and governor to divert funds to non-transportation expenses.
Originally intended to be used during fiscal emergencies, the provision has been used
repeatedly. Two of the last three budget years, the sales tax on gasoline has been diverted
to fund non-transportation state expenditures in the State General Fund. Nearly $2.5
billion in these gas taxes has been diverted to non-transportation expenses since 2002.
A broad-based coalition of business, labor, local government, and cornmunity leaders is
collecting signatures .to qualifY a constitutional amendment for the November 2006 ballot.
If passed, this measure would close the Prop. 42 loophole, uphold the original intent of
the measure, and ensure that the sales taxes paid at the pump are used for transportation
improvements. This measure would prevent the governor and legislature nom diverting
the sales taxes on gasoline to non-transportation expenses.
The measure also requires the State to reimburse the $2.5 billion in funds previously
diverted. It allows 10 years for repayment to avoid any immediate fiscal impact.
By closing the Prop. 42 loophole, this measure would finally provide a stable funding
source for state and local agencies responsible for transportation improvements, and
allow them to:
· Fix the most hazardous intersections and unsafe highways in California.
· Relieve traffic congestion through neeway widening, road repairs, transit projects,
and intersection improvements.
· Repair crumbling roads, fill potholes, and improve older roads, overpasses and
bridges.
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Recommendation: Adopt a resolution in support of a state constitutional amendment
dedicating the existing state sales tax on gasoline to fund transportation projects and
authorize the mayor to send a letter in support of the same.
Submitted by:
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Public Information Officer
Approved for submission:
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David W. Knapp
City Manager
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DRAFT
RESOLUTION NO. 06-044
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CUPERTINO IN SUPPORT OF MEASURE TO SECURE LOCAL
TRANSPORTATION FUNDING
WHEREAS, the City of Cupertino engages in periodic capital improvement assessments and
planning relating to the condition of its transportation inftastructure; and
WHEREAS, the City is concerned that it is not able to maintain its transportation infTastructure
consistent with public works best practices because oflimited funding availability; and
WHEREAS, constraints on the City's ability to fully fund local transportation infrastructure
projects adversely affect residents, visitors, and businesses within the City; and
WHEREAS, the City had anticipated receiving monies for this purpose as the result of
Proposition 42, approved by the state's voters in March 2002, which dedicated the state sales tax
paid on gasoline to state and local transportation infTastructure projects and programs; and
WHEREAS, Proposition 42 contains a provision that allows the state to transfer the sales tax on
gasoline to non-transportation state purpqses during times of fiscal need; and
WHEREAS, as a result, some $2.5 billion in Proposition 42 monies has been spent over the past
three years for non-transportation purposes; and
WHEREAS, a measure is being circulated to qualifY a constitutional amendment for the
November 2006 ballot that would ensure that future revenues raised by Proposition 42 are
dedicated to state and local transportation projects only; and
WHEREAS, the measure also requires the state to reimburse the $2.5 billion in funds previously
spent on non-transportation expenses to be repaid in 10 years; and
WHEREAS, ensuring that Proposition 42 revenues are used solely for transportation projects,
along with the reimbursement of prior revenues, will greatly assist the City of Cupertino in
meeting its street maintenance obligations to the benefits of its residents, visitors, and businesses.
Therefore be it RESOLVED, that the City Council of the City of Cupertino supports a
constitutional amendment to ensure that Proposition 42 revenues are used exclusively for state
and local transportation projects, and that revenues previously used to offset non-transportation
purposes be reimbursed.
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Resolution No. 06-044
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PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this
27th day of February 2006, by the following vote:
Vote Members ofthe Citv Council
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
APPROVED:
City Clerk
Mayor, City of Cupertino
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