Campaign for Gas Tax Enlists Foes, Prepares for Ballot Fight : Transportation: Developers drop opposition and join effort while teachers appear mollified. Deukmejian leadership is criticized.

SACRAMENTO —  Having quieted the threat of opposition from developers and teachers, a campaign for the biggest gasoline tax increase in state history has shifted into high gear with a strategy that attempts to turn potholes and traffic congestion into a political asset.

If it is approved by the voters in June, the tax measure will spark a wave of highway and mass transit construction that its supporters believe eventually will ease the state’s crippling congestion and rehabilitate its many crumbling highways. But if it fails, it means a current moratorium on new construction will be extended a minimum of a year.

With the latest Los Angeles Times Poll showing opponents outnumbering supporters by a wide margin, Republican Gov. George Deukmejian and a coalition of business, labor and political leaders have their work cut out for them in persuading voters to add 5 cents a gallon as of Aug. 1, then another penny each year until 1995.

Even without any well-financed opposition, political strategists see the campaign to win voter endorsement of a tax increase as a difficult battle, particularly in a state where the anti-tax sentiment is well-organized and highly vocal.

Earlier this year, both the California Teachers Assn. and the California Building Industry Assn. were threatening to finance a campaign against the measure. Lawmakers, scrambling to squelch any organized opposition, agreed to changes and clarifications in the proposal to satisfy the teachers’ concern that it might hurt funding for education and the developers’ worry that an accompanying program to reduce congestion was unworkable.

As a result, the builders group earlier this month publicly pledged to work for passage of the tax. Although the teachers association has not formally withdrawn its opposition, officials are optimistic it will.

The withdrawal of their opposition would leave local anti-tax groups as the major opponents to the proposed gasoline tax increase. Ted Costa, president of the Sacramento-based People’s Advocate, said his and other anti-tax organizations are opposing the tax increase individually, but so far have no coordinated statewide campaign to defeat it at the polls.

Political strategists, however, say promoters of the gasoline tax measure have a hidden opponent: a general public distrust of Sacramento politicians and their spending proposals. That public skepticism, they say, has been exacerbated by former state Sen. Joseph B. Montoya’s (D-Whittier) recent conviction on extortion, racketeering and money-laundering charges.

“We’ve not tried to fool anyone. We’ve told people that this is going to be a tough campaign,” said Michael Frost, Deukmejian’s chief-of-staff and his liaison with the gasoline tax campaign. “It’s always difficult to get people to increase taxes. . . . We think it’s winable but it’s going to take a major education effort on our part.”

What the coalition is trying to pass on the June 5 ballot are two proposals--Proposition 108, which authorizes a $1-billion bond issue for mass transit, and Proposition 111, which modifies the state spending limit to allow, among other things, additional spending for transportation.

Although technically voters won’t be voting on the gasoline tax proposal, it cannot go into effect without the passage of the spending limit measure. Both the ballot language and the ballot arguments note repeatedly that the measure will trigger a gas tax increase. The tax boost--together with a 55% rise in truck weight fees--would finance $15.5 billion of a 10-year, $18.5-billion transportation improvement program.

“In these measures you’re asking the voters to do two things. You’re asking them to raise the gas tax and you’re asking them to relax general fund spending,” said Arthur Bauer, executive vice president of Californians for Better Transportation. “You’re asking them to make some big changes in the way we do business in California. That’s a tough order. It’s winable, but it’s uphill.”

Although the campaign has the backing of a coalition whose size and diversity is almost unprecedented, it is Deukmejian who seems to hold center stage in it. A conservative who until now has made his opposition to tax increases a hallmark of his political career, Deukmejian helped pass the measures in the Legislature and has agreed to head the campaign to win voter approval.

Both Deukmejian’s critics and his supporters see the campaign as a major milestone in his Administration that will be used by politicians and academicians to help judge his effectiveness as a governor.

“If he fails, it would show that he has not been effective in dealing with the transportation problems,” said Charles Price, a political science professor at Cal State Chico.

Indeed, said Frost, the governor’s aide, if the campaign loses, “everybody knows the governor’s going to be blamed. And he knows that. We all know that.”

On the other hand, said Controller Gray Davis, a Democrat, success can mean that Deukmejian can “claim to have contributed significantly to California’s transportation future. It represents the most significant piece of legislation passed on his watch.”

Deukmejian is campaign chairman, but the campaign strategy is being mapped by a professional consulting firm--Burlingame-based Woodward & McDowell--that specializes in ballot propositions.

Using public opinion polls as his guide, consultant Dick Woodward says the best way to sell the gasoline tax increase is to emphasize, region by region, the potholes that will be fixed, the bridges that will be retrofitted for earthquake safety and the roads, rail stations, overpasses and underpasses that will be built if the measure passes. Hidden in his message is the inference that the same things won’t be fixed and built if the ballot measure does not pass.

As part of the strategy, the California Transportation Commission has begun to specify the new construction projects in the State Transportation Improvement Plan that dwindling tax resources are forcing it to delay each month.

As the election draws near, Woodward said the campaign will pepper voters with television and radio spots, newspaper advertising and direct-mail touting the virtues of various projects for each area of the state. His plan is to devote at least 80% of the $5 million Deukmejian has pledged to raise for the campaign to “communicating with the public.”

Woodward devised his campaign strategy before later poll results showed him that the concentration on local projects and local officials had another advantage: It would draw attention away from the Legislature, whose standing with the public has been further sullied by Montoya’s conviction.

“It (Montoya’s conviction) really doesn’t help. The general public at the moment does not view the Legislature, or Sacramento for that matter, very highly. I think we’re better off talking about support and endorsements from others,” Woodward said.

But this reluctance to emphasize the Sacramento connections to the gasoline tax increase stops short of the governor, who is expected to have a major role in the campaign. Both Frost and Woodward said Deukmejian’s campaign activities will be directed at selling his old constituency--the anti-tax conservatives--on the idea of a tax increase.

Said Frost: “There is a constituency out there who basically doesn’t like taxes and the governor is the leader of that constituency. I mean he is the person who has probably led the no-tax movement in California over the last seven years. . . . He’s dealing with his own base of supporters and telling them, explaining to them, why it’s important for the future of the state to do this.”

Yet Frost and Woodward’s confidence is not shared by everyone. Some worry that Proposition 116, another June ballot proposal authorizing $1.9 billion in bonds for rail transit that is being pushed by the Planning and Conservation League, an environmental group, may draw voters away from the coalition’s Proposition 108. While Proposition 108 provides a broad list of intercity, commuter and urban corridors that will be eligible for the funds, Proposition 116 names specific programs--such as a new commuter rail service between Los Angeles and San Bernardino counties--that it will help finance.

“I think the whole transportation community is being outfoxed by the league,” said one businessman. He said the league was able to get the three top gubernatorial contenders--Democrats John K. Van de Kamp and Dianne Feinstein and Republican Pete Wilson--to sign its ballot arguments while the only name on the coalition’s measures with any political pizazz is Deukmejian’s. Wilson and Feinstein, however, are supporting the tax increase, while Van de Kamp has taken no position pending a formal action on the issue by the teachers’ association.

Gerald Meral, the league’s executive director, said the two camps have informally agreed not to fight each other. “Our hope is that there is no competition and that they (the two propositions) are complementary to each other. Both are needed,” he said. “Our position is a vote for 116 is a good thing and if you want to vote for the others, that’s good, too.”

Behind the scenes at the coalition, other businessmen have complained that the gasoline tax campaign did not crank up fast enough, that business interests that were quick to pledge financial support have been slow to fork over the dollars and that Deukmejian’s leadership has been lackadaisical.

“He (Deukmejian) is not busting his butt,” said one business leader privately. He argued that Deukmejian’s speeches on the gasoline tax have been pedestrian at best, that the governor did not push to hire a consulting firm until December and that the campaign is far from its $5-million campaign goal. As of the end of March, Tom Hiltachk, the campaign treasurer, said collections stood at $470,000.

Complaints about the campaign reached Deukmejian’s ear at one emotional strategy session and angered the usually unflappable governor and his staff, Frost said.

“My reaction to that is the same as the governor’s reaction: ‘What in the hell do they want him to do?’ ” snapped Frost. “I mean he is doing everything he can possibly do to get this passed and I think that kind of criticism is coming from people who aren’t doing their own job. They are sort of sitting back and criticizing, but they are not out helping row the boat basically and the governor is.”

He said Deukmejian personally lined up business people to conduct the fund raising and pitched the proposed gasoline tax increase “in every major speech.”

Woodward acknowledged that fund raising has been slow, but that, he said, was because many business leaders were waiting to see if the teacher and developer associations were going to make good on their threats to conduct an organized campaign against the measures. “The operative assumption has been that if you have a well-financed opposition to this issue it’s going to be very difficult to win,” Woodward said. “So the so-called smart money was waiting to see what’s going to happen.”

Since the last financial report was filed, Frost said the fund raising has picked up substantially and boosted his confidence that the campaign will be able to reach or exceed the $5-million goal.

He said that the money is essential for the “kind of media and mail campaign that needs to be done during the last several weeks” and that the gasoline tax measure is doomed without it.