The approval of Governor Brown’s tax extension plan has nothing to do with the Dorsey Drive funding as suggested here, other than Brown’s desire to gut the Redevelopment Agencies and use the money elsewhere. This action by Gov. Brown has forced government agencies to protect their existing redevelopment fund accounts by committing the money to a project. Grass Valley has chosen to fund the Dorsey Drive, thus saving the redevelopment money from the Governor’s clutches.
However, there is a Dorsey Drive funding issue that involves Prop 26 and the Gas Tax Swap that was to fund the State Transportation Improvement Program, including $10.5 million dedicated to Dorsey Drive. What was the gas tax swap you ask? The Gas Tax Swap was a combination actions to lower the sales tax rate applicable to sales of motor vehicle fuel and simultaneously raising the state excise motor vehicle fuel tax. This swap was to be effective July 1, 2010.
However, the passage of Prop 26 caused a great deal of uncertainty over the validity of the gas tax swap that was approved last March, and it may have to be re-instated. Proposition 26 calls for a two-thirds majority vote on all tax and fee increases, invalidating the complicated tax swap that lawmakers approved last March. As a result, California may lose $2.5 billion of the $8.5 billion it collects annually for highways and transit if the swap is not re-instated. This includes the $10.5 million of STIP funding for Dorsey Drive.
The Gas Tax Swap Re-Do will require the cooperation of both the Democrats and Republican to reach the required 2/3 vote to pass under Prop 26. While it will be messy process, I have been assured that the Gas Tax Swap will be re-instated, as it is revenue neutral. It does not raising taxes which would prevent the Republicans in the Assembly from supporting it on principle, and it will produce California jobs. Both the Nevada County Transportation Commission and Board of Supervisors are supporting the reinstatement. I expect that Assemblyman Dan Logue and State Senator Doug LaMalfa will support passage of the Gas Tax Swap Re-do. Stay Tuned for an update.