Quake Repair Surtax Under Discussion

Gov. George Deukmejian said Thursday that it may be necessary to enact an emergency, temporary tax increase--probably in the form of higher gasoline or sales taxes--to meet the costs of repairing the massive earthquake damage in the Bay Area.

Deukmejian said he will meet Monday with leaders of the Legislature to discuss the possibility of a special session to deal with the disaster.

“Without any question, this is not a normal situation--it’s an extraordinary situation and we’re going to do everything that is necessary,” the governor said at a press conference with San Francisco Mayor Art Agnos.

“I have not ruled out the possibility of some kind of temporary tax increase if that is necessary in order to raise the funds that are needed to bring these communities back to normal operations and repair the very extreme damage, not only to public property but personal property as well.”

Throughout his two terms in office, Deukmejian has steadfastly opposed increasing consumer taxes. This summer, however, he did agree to support a 9-cents-a-gallon increase in the gasoline tax, but only if it is approved by voters in a June ballot measure. That money would go to transportation projects throughout the state.

The governor noted that the state has a $1-billion reserve--an emergency fund his Administration has “fought to maintain” against legislative efforts to spend the money on other programs.

“That money is available,” Deukmejian said, noting that it can be supplemented by federal assistance. “If indeed there is a need for more, then we’re going to have to seek additional resources,” he said.

The governor, who on his return to California from West Germany on Wednesday had indicated he did not believe a special legislative session would be necessary, told reporters that there is “some precedent” for enacting temporary gasoline and sales tax increases to cope with disaster. The state gasoline tax was increased 1 cent per gallon for six months in 1965 and again for three months in 1969 to finance restoration of transportation systems heavily damaged by winter storms.

Anticipating a possible special session, legislative leaders in both houses already had urged their members to be prepared for a recall to Sacramento. Assembly Speaker Willie Brown (D-San Francisco) said it is clear that extraordinary appropriations will be needed for replacement of the collapsed freeway in Oakland and to repair the San Francisco-Oakland Bay Bridge.

In Sacramento, Brown added that he would support a temporary boost in the gasoline tax for such purposes. He also said he would ask Deukmejian to call a special session soon.

A newly created bipartisan legislative earthquake “task force” headed by Brown met on Thursday to discuss how to deal with transportation and housing problems caused by the earthquake and recommended that a special session be held as quickly as possible.

On the Senate side, President Pro Tem David A. Roberti (D-Los Angeles) said he would support a temporary increase in the gasoline tax, “if it is absolutely necessary.”

At his press conference, Deukmejian emphasized that there still must be a more specific assessment of total damage done to the state and stressed that any tax hike enacted “would not be a permanent increase.”

Any such increase “in all probability” would be statewide, he said. “But I don’t want to say that as a final answer because, again, this is premature for us to be talking about it, or the nature of it or the extent of it.”

After the news conference, Assemblyman John Burton (D-San Francisco), a member of the money-handling Ways and Means Committee, told reporters: “If we have only a billion in reserve, that’s not going to cover very much.”

The first specific tax-boost idea to be offered up came Thursday from maverick Assemblyman Richard E. Floyd (D-Carson). His proposal--which is not expected to go far in the Legislature--would add a 25-cent surcharge on each gallon of gasoline sold in California for one year, raising about $3.5 billion.

Hager reported from San Francisco and Gillam from Sacramento.