Low gas prices at the pump may be celebrated by drivers, but those bargain prices are “decimating” the funding stream for improvements to Kings County’s state highways, according to a local transportation planning official.
Proceeds from the gasoline excise tax — which goes up or down depending on the price — are plummeting due to low gas prices.
Another gasoline tax — this one a fixed per-gallon charge — is also declining due to more fuel-efficient cars, hybrids and the push for all-electric vehicles.
None of this is good for Kings’ prospects for significant highway improvements, according to Terri King, executive director of the Kings County Association of Governments.
Kings said the 12th Avenue/Highway 198 interchange work that has been snarling traffic for weeks could be the last local Caltrans-funded highway improvement project Kings County residents see for a long time.
The only remaining Kings County highway project that has been funded is putting in landscaping and plants at the interchange once the construction work is done.
King said that funding to build an overcrossing at the Ninth Avenue/Highway 198 crossing will be delayed indefinitely.
“This is utter decimation of the State Transportation Improvement Program funding,” King said. “We won’t have any projects added for quite some time, possibly decades. It’s sad.”
Because Kings County doesn’t have a self-help transportation sales tax increment, it relies on the state program for new construction projects on Highways 198, 43 and 41.
On the wish list: Widening Highway 41 to four lanes all the way to Fresno and widening Highway 198 to four lanes from Naval Air Station Lemoore to Interstate 5.
The declining gas tax revenue stream will also affect street budgets in Hanford and Lemoore. Gas taxes are the single-largest source of funding for those cities’ roadwork.
“We’re very concerned,” said Lou Camara, Hanford public works director. “In the long-term, going forward, if this revenue stream is not corrected by the state, it will have a big impact on the maintenance of our roadways.”
Camara noted that Measure S, a sales tax increase rejected by Hanford voters in 2014, would have funded roads.
In Lemoore, maintenance projects will go forward despite the shortfall, according to Nathan Olson, public works director.
Olson said the city will dip into general fund money to close the gap.
“We’re not going to put anything on hold,” he said.
The shortfall has once again resurrected the subject of slightly raising local sales taxes to fund transportation improvements.
Given the failure of Measure S, officials expressed little confidence that Kings County voters would stomach another tax increase.
“I think the public has spoken, at least for the time being,” Camara said.
The low gas prices that are cutting into gasoline excise tax revenues aren’t likely to go up anytime soon, according Bernard Weinstein, a gas price expert at Southern Methodist University in Texas.
Normally, oil supply would contract to match slumping worldwide demand. Weinstein said geopolitical factors are complicating the picture.
He said Saudi Arabia is keeping its production high (and losing money in the process) in order to maintain low prices. The goal is to hurt its No. 1 rival, Iran.
Iran’s government gets much of its cash from oil revenue. So does Russia, Iran’s main ally.
“It’s political agendas that are being played out,” Weinstein said.
Weinstein thinks the Organization of Oil Exporting Countries — an organization heavily influenced by the Saudis — will eventually stop what Weinstein called the “insanity” of the current situation. He’s just not sure when
“It could go on for a few more years,” he said.
Meanwhile, King noted that the California Legislature is considering two bills that would boost transportation funding.
In the interim, she said the Kings County Association of Governments will be looking for federal highway funding.
“We’re trying to do a workaround,” King said.