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www.ortrucking.orgIssue 3, Summer 2016
LEGISLATIVE UPDATE
scenarios, there will be a significant budget deficit. Legislative
Fiscal estimates that it will be around $750 million per year or
$1.5 billion per biennial budget cycle. The Democrats
certainly do not favor sufficient budget reductions necessary
to address the problem. You may have heard Governor
Brown say that we have a revenue problem. Of course, this
means an increase in taxes, and businesses will most likely be
the target.
The Democrats have already indicated that they want to pass
a Transportation Funding Package early in the 2017 session.
If they pickup sufficient seats in the House, they won’t need
any Republican votes to pass a tax increase. It appears their
strategy is to pass the Transportation Funding Package and
then balance the budget with a tax increase on business.
Under this scenario, I don’t think we will like either the
Transportation Funding Package or the business tax, as many
of our issues, including the Low Carbon Fuel Standard, will
not be addressed. It will also be likely that the transportation
tax increase will be more than we can bear; the Speaker has
said that she wants a billion dollars per year for
transportation. This would require close to a 100% increase
in the weight mile tax plus some sort of business tax increase.
The Republicans have said that they do not support this
approach. They want to deal with transportation funding at
the end of the 2017 session so that a transportation tax
increase and a business tax increase can be considered
together. This works if the Republicans don’t lose any seats in
on
Transportation Funding
the House. However, when confronted with two potential tax
increases, it is likely that the Democrats will kick the
Transportation Funding Package to the curb and focus on
balancing the budget. The reason this is a likely result is that
the Democrats will not want to give the Republicans the
leverage they would have if both tax bills were to move
forward close to the mandatory date for adjournment. The
Legislature must balance the budget. They do not have to
fund transportation.
The other possible scenario is that the Republicans actually
pickup seats in the House. They then would have the leverage
to insist upon passage of a Transportation Funding Package,
that we might like, and balance cuts with increased revenues
to address the budget problem. The challenge is that business
is going to have to fund somewhere in the neighborhood of
$20 million just to defeat M97 and an additional amount to
fund the House Republican campaigns at a sufficient level to
actually take back seats. This is a lot of money and more than
business has spent in any previous election cycle.
Sorry, but none of this sounds particularly good. As an
industry, we can sit on the sidelines and wait to see what
happens. However, I don’t think you will like the result. If
there ever was a time when you need to look at an investment
in politics, as an investment in your business, now is that
time. Please, consider an investment in Truck PAC and M97.
You can contact either Jana or me for more information or
help in making your contribution.