Gas Tax: Where is Your Money Going?

SACRAMENTO -- Pattie Gibson of Sacramento loves her all-electric Smart Car. She doesn't need to buy gas. She doesn't need to buy oil. And she doesn't even mind if the state of California wants to charge her (and other electric car drivers) an extra 100 bucks each year to fix the state's roads.

"It's fair. I mean, I have not bought gas for three years," Gibson said.

But after all the years of gas taxes and registration fees, many in the state are wondering what happened to the money California's been collecting all along. And many are wondering why the state needs a tax increase to fix roads.

"I know a lot of people can say 'just get it out of somewhere else.' Well I'm telling you, and I have no reason to lie to you -- I'm not like some of those other guys running for reelection. I'm here. I'm going to be 69 next week. I'm telling you God's honest truth. This is needed. If we don't do it, the roads will crumble," said Governor Jerry Brown.

The money California collects already does pay for highway maintenance, but also for California Highway Patrol and other general fund expenditures. It pays for those thing even though there is law that the existing gas sales tax could only be spent on transportation, and that tax can't be raised without a two-thirds majority vote.

But that's where things get a little tricky. See back in 2010, when the Great Recession was about at its worse, California lawmakers actually voted to lower the sales tax on gas. But at the same time they voted to increase the excise tax. It wasn't a net increase on taxes, and it allowed them to spend the money on anything they wanted.

"I was not here. But I think folks here remember," said State Senator Josh Newman from his office at the Capitol in Sacramento.

The Democrat state senator from Fullerton has drafted an amendment, not to the proposed tax law, but to the California Constitution. It would require that the money raised by this bill be spent on roads and transportation.

"It's very explicit, and it pertains to explicitly what we're asking, which is, if we're going to raise new fees, to address the deferred backlog of transportation needs in this state, let's give you that assurance, constitutionally, that money is protected," Newman said.

While an increase in the gas tax and registration fees can be voted in by a two-thirds majority in the state legislature, the constitutional amendment would need to be approved by 50 percent of voters in California.

Still, Thursday, Republican lawmakers in California were pushing back. The sentiment on their side of the aisle: if transportation dollars could flow into the general fund in the past, why can't dollars flow out of the general fund now that California's roads have become a priority again.