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Home My WebLink About1982-03-16; City Council; 6930; Local Option Fuel Taxgv lf� CITY- 6F CARLSBAD — AGENDA+ $ILL LE: mmt AB# &930— TITLE: DEPT. HHDD.�`._�,� MTG. 3/16/82 LOCAL OPTION FUEL TAX CITYATTY�IJ..=1- DEPT. ENG _ CITY MG RECOMMENDED ACTION: That the City Council endorse the concept of a 2t Local Option Fuel Tax to be distributed on a per capita basis. ITEM EXPLANATION: On September 16, 1981, Senate Bill 2.15 became law. SB 215 provides additional gas tax revenues to cities and counties. Additionally it includes a provision which permits counties to impose a local fuel tax in 1C increments on a County -wide basis for highway and guideway purposes. To accomplish this, a proposition must be approved by two-thirds of the voters, by the Board of Supervisors and by a majority of the City Councils representing a majority of the population in the incorporated areas. The County and cities must also have a written agreement specifying the method for allocating the local option gas tax revenues before the tax election. The public vote only needs to specify the maximum additional fuel tax and may specify the period or duration of the tax. On October 31, 1981, the Board of Supervisors directed County staff to make preparations for a local 24 fuel tax Ballot Proposition to be used for road construction purposes. A 2C local option fuel tax would generate approximately $250,000 annually for Carlsbad. A local area poll conducted by Dr. Oscar Kaplan for the Construction Industry Federation recently determined that 61% of those polled would support a 20 local option gas tax increase. Subsequent responses in the poll further revealed strong support for road maintenance, public transit and gap closures of incomplete major routes. FISCAL IMPACT: Each -1� increase in the gas tax would generate about $125,000 to Carlsbad, based on distribution by population. EXHIBIT: Staff Report NOTE: To date 8: cities have endorsed the 2� tax increase and 4 are opposed. San Diego City Council is considering a 0 increase. CITIES FOR: Chula Vista, Coronado, Del Mar, I,a Mesa, National City, Oceanside, Santee, Vista. CITIES AGAINST: E1 Cajon, Escondido, Lemon Grove, San Marcos. r LOCAL OPTION FUEL TAX On September 16, 1981, Senate Bill 215 became law, SB 215 provides additional ga. tax revenues to cities and counties. Additionally it includes a provision which permits counties to impose a local fuel tax in 1C increments on a County- wide basis for highway and guideway purposes. To accomplish this, a proposition must be approved by two-thirds of the voters, by the Board of Supervisors and by a majority of the City Councils representing a majority of the population in the incorporated areas. The County and cities must also have a written agreement specifying the method for allocating the local option gas tax revenues before the tax election. The public vote only needs to specify the maximum additional fuel tax and may specify -the period or duration.of the tax. On October 31, 1981, the Board of Supervisors directed County staff to make preparations for a local 2C fuel tax Ballot Proposition to be used for road construction purposes. According to Article XIX of the California Constitution, all revenue from fuel taxes must be used for highway and mass transit guideway construction projects. The local option fuel tax could be spent 100% on roads (local or regional facilities) or could be split between these roads (75%) and transit guideway projects (25%) in accordance with Proposition 5 limits approved by the voters several years ago. The amount of funds that would be generated by a 1C per gallon fuel tax based on the County-wi de consumption of 800 million gallons per year would be $8 million per year. Allocating this sum to the various cities and County on the basis of population would provide to the City of Carlsbad approximately $125,000 per year for each 1C of the fuel tax levy. A local area poll conducted by Dr. Oscar Kaplan for the Construction Industry Federation recently determined that 61; of those polled would support a 20 local option gas tax increase. Subsequent responses in the poll further revealed strong support for road maintenance, public transit and gap closures of incom- plete major routes. As indicated previously, Senate Bill 215 provides that a Ballot Proposition For a local option fuel tax be submitted to the voters only if the County and the cities within the County have a written agreement on how the local option fuel tax would be allocated. Such a written agreement could fall within the following range of alternatives: 1. The local option fuel tax could be designated for construction of specific regional highway construction projects. The local option fuel tax could be distributed on a formula basis t o all cities and the County for use on local projects at their discretion. The local option fuel tax could be partially distributed to cities and the County on a formula basis and partially distributed on a project specific basis, including regional highway construction projects and/or guideway projects. J_ 11 -2- LOCAL OPTION FUEL TAX In order to evaluate the various alternatives, it is necessary to compare the needs for funding of the local and regional roads and guideways. To provide for our annual street maintenance needs, the City budgets approx- imately $1 mi.11ion. Gas tax revenues, including the anticipated revenues from the recent gasoline tax increase, will be about $372,000 beginning in July 1983• Differences between gasoline tax revenue and street maintenance costs are borne by the general fund. Future steet construction funds will be provided primarily by public facilities fees or federal aid programs. During the past several years, CALTRANS has been impacted by the escalating costs of construction and maintenance while receiving a minimal increase in fuel tax proceeds. The result has been that few projects other than those primarily funded with interstate funds have been advanced. This situation has delayed such regionally significant routes as State Route 15, 52, 54, 56, 76, 117 and 125. Only Route 76 in Oceanside has any direct significance to Carlsbad. The estimated cost of the regional route, within the County is in excess of $400 million in 1981 dollars. Given the apportionment requirements existing under State law as amended by Senate Bill 215, the increased revenues resulting will be insufficient to fund these needs. Discussions with MTDB staff indicate they intend to place before their Board a proposal to recommend a portion of any local option fuel tax be seL aside to assist in the expansion of the LRT System. As indicated, up to 25% of any increase in fuel tax within the MTDB area could be allocated for guideway pur- poses. MTDB is currently considering the funding of the $85 million easterly extension. In addition, a northerly extension is now under study. Currently authorized State and local funding sources are insufficient to allow early construction and implementation of these two route extensions. Carlsbad's most urgent need is probably for funding for maintenance of local streets rather than regional projects of guideway systems. On February 11, 1982, the City Manager of the City of San Diego was preparing to recommend a 4C Local Option Fuel Tax to his City Council. The City Council's of Vista, La Mesa, Coronado, Oceanside and Santee have endorsed the concept of a 2C Local Option Fuel Tax. The Lemon Grove City Council has approved the Local Option Fuel Tax. LE:mmt 3/5/82