Senate leaves highways unfunded for another week
July 28, 2014
The Senate adjourned Thursday without voting to prevent a bankruptcy in federal transportation funding.
Senate Majority Leader Harry Reid (D-Nev.) had said he hoped to begin voting on the measure last week in the hopes of completing the nearly $11 billion extension of road and transit funding ahead of a projected bankruptcy next month. The measure would extend the federal government’s authority to collect the 18.4 cents-per-gallon gas tax that is normally used for transportation projects and add about $10.9 billion to the Department of Transportation’s coffers to close a shortfall in infrastructure projects that runs about $16 billion per year for eight months.
However, senators became bogged down in a debate over amendments to change the House’s version that would alternatively eliminate the gas or shorten the House’s version to allow for a possible increase in the levy after this year’s election. The Senate adjourned for the week around 1:45 Thursday afternoon, leaving the transportation funding extension to the final week before lawmakers take their traditional August recess.
The Obama administration has pushed lawmakers to use approximately $150 billion that it says can be saved from closing corporate tax loopholes to pay for a new long-term transportation funding package. Lawmakers have largely ignored the proposal, focusing instead on a temporary extension paid for with money from other areas of the federal budget like pension changes and custom fee increases.
Read more here.
U.S. House passes $10.9 billion transportation funding extension
July 21, 2014
The House easily passed a ten-month Highway Trust Fund patch; the fate of fund now lies with the Senate. Senate Majority Leader Harry Reid has outlined a plan to vote on three separate bills: the House one, the Senate Finance measure that differs on several issues and a plan from EPW Chair Barbara Boxer to extend policy through December in an effort to force a vote on a long-term bill this year. Read more here.
The President isn’t terribly fond of the House bill. “All this does is set us up for the crisis a few months from now,” he said. Read more here.
Newspapers across the country did NOT like the proposal, particularly the “pension smoothing” aspect, which many called a gimmick. Read an overview here.
Even comedian Jon Stewart got in some jabs about that on his TV show in a segment titled “Shabby Road.” And you can watch that here.
Highway Deal Nears
July 14, 2014
Quibbling continues over the Highway Trust Fund, but on Thursday committees in both houses approved measures that will extend current funding through May.
Sen. Tom Carper and a few others aren’t too happy about that. “Over the last five years, we’ve kicked the can down the road on the Highway Trust Fund eleven times,” Carper said. “That uncertainty has kept states and cities from being able to plan and build large-scale transportation investments that have the biggest impact on the economy. So there is no reason to think that punting on this issue to the next Congress yet again will magically yield a different result.”
Carper had pushed for Congress to extend transportation funding until the end of the year so lawmakers would be forced to debate a long-term package during the lame-duck session that will follow the November elections.
Replenished federal transportation fund needed to power California economy
July 7, 2014
California’s transportation network helps power the world’s eighth largest economy.
An op-ed in the San Diego Union-Tribune by Will Kempton and James Corless
The looming loss of all federal transportation funding for next year would threaten even the most ambitious regions in California who are raising and investing their own transportation dollars. If we lose the ability to continue investing in the transportation network that has created decades of economic opportunity and that millions of our residents depend on, California’s economic engine could be stalled — which would have huge impacts across our country. A strong national economy requires a strong California.
Every day millions of Californians use our roads, intercity passenger rail, and rapidly expanding transit systems to connect to the jobs and educational opportunities that have made us an economic powerhouse. Our state is the unparalleled trade gateway between the Far East and the rest of the country.
Unfortunately, while we can thank our transportation system for getting us here it is not up to the task of spurring our economy strongly into the future.
California must invest in a transportation system that moves people and goods efficiently to compete at the national and global levels. Cities and counties throughout our state are leading efforts to invest in their regional transportation systems to improve access to jobs, reduce congestion, and revitalize neighborhoods and communities.
Voters in 19 counties in California have opted to pass local sales tax measures for needed transportation improvements over the past three decades. These programs fund the repair of local streets and roads, improvements to crowded freeways, and construction of important rail and transit facilities. While most of these “can-do” counties in the Bay Area and Southern California are urbanized, rural counties such as Madera, Tulare, and Imperial counties have approved these measures as well
While many states and regions are stepping up to put skin in the game and fund a 21st century transportation system, we are in imminent danger of losing the federal funding that has played a critical role in building and maintaining our transportation network.
Read more in the Union-Tribune.
Senate lurches closer to highway fund stopgap
June 30, 2014
Bipartisan agreement on a transportation stopgap measure may be near
The Senate Finance Committee inched closer Thursday to bipartisan agreement on a transportation infrastructure stopgap that would carry federal road and transit funding through the midterm elections. The progress came when Finance Committee Chairman Ron Wyden (D-Ore.) agreed to delay a vote on a $9 billion patch and use the extra time to address Republican concerns. “There really isn’t the time for the two parties to go to their respective corners and battle it out,” Wyden said during a hearing.
Lawmakers are struggling to come up with a way to pay for a transportation funding bill to replace the current infrastructure appropriations bill, which is set to expire at the end of September.
Read more in “The Hill” here.
Gas tax proposal in DC; VMT suggestion in CA
June 23, 2014
Topics no one will talk about are being talked about
Senators call for 12-cent gas-tax increase to replenish highway fund
In Washington, D.C., Senators called for a 12-cent gas-tax increase to replenish the highway trust fund. “We are sick and tired of Congress talking about fixing our transportation funding shortfall and avoiding specifics simply because the solutions are politically uncomfortable,” said Sen. Chris Murphy (Conn.) at a news conference announcing the plan. “Money is not going to fall off trees or sprout out of the ground to fill the funding gap.”
Read more here.
California’s deteriorating highways need a different revenue system
Dan Walters says that Sen. DeSaulnier’s mileage-based fee is a start on finding another way to pay for maintaining the state’s highway network. Perhaps baby steps, but, “Highways are not improving with age,” he writes.
Read more here.
Budget deal spends cap-and-trade funds on high-speed rail
June 16, 2014
Legislature passes state budget six hours before deadline
California lawmakers passed the state’s main budget bill Sunday, less than six hours before the constitutional deadline. The vote comes after Gov. Jerry Brown and legislative leaders last week reached a compromise on a $156.4 billion budget package for the fiscal year beginning July 1.
Read more in the Sacramento Bee.
Budget deal spends cap-and-trade funds on high-speed rail
Two years after Gov. Jerry Brown first proposed using carbon-reduction revenue to prop up California’s beleaguered high-speed rail project, Brown and legislative leaders reached budget agreements Thursday that include the controversial funding plan. . . . In a key resolution, Brown and Democratic lawmakers agreed to use $250 million in cap-and-trade revenue – money polluters pay to offset carbon emissions – to fund construction of California’s $68 billion rail project this year, with 25 percent of carbon emission funds going to the project in future years. The amount falls short of the 33 percent Brown initially wanted, but is more than Senate Democrats proposed. Environmentalists and Republicans immediately criticized the plan, which is almost certain to be challenged in court.
The high-speed rail funding, though insufficient alone to fund construction, holds the promise of a perpetual revenue stream – one not controlled by the federal government. The allocation is a rare victory on rail for Brown, a third-term Democrat who has championed high-speed rail since taking office. The project has been beset by a fall-off in public approval and uncertainty about long-term financing, legal challenges have left state bond funding in doubt, and a more recent round of lawsuits challenge the project on environmental grounds.
Read more in the Sacramento Bee.
Another View: Transportation Coffer is Running on Empty
June 10, 2014
Dan Walters got it partly right but was wrong to suggest that efforts to redirect truck weight fees to pay for road and highway work undermine a users-pay principle, (“Road users should pay for projects,” Dan Walters, May 30).
In fact, these levies are a quintessential user fee since heavier vehicles, which cause more damage to roadways, pay to mitigate that extra wear and tear.
The real story is that the state’s transportation program is teetering on a fiscal cliff and funding for our transportation system is in a free fall. Much work is underway, such as rebuilding the W-X freeway. But these projects are the last gasp of Proposition 1B, a $19.9 billion bond issue passed by the voters in 2006 to help transportation agencies pay for long-delayed roadwork.
Once these projects are completed, you won’t be seeing many new cone zones. That’s because after peaking at about $7 billion in 2011-12, state construction allocations have plummeted to about $3 billion a year, and Caltrans expects funding to continue at that level for the foreseeable future if something isn’t done. That’s not good news considering that the state has a funding shortfall of more than $12 billion a year to repair and maintain existing roads.
The reasons are twofold: the declining purchasing power of the fixed per-gallon gas tax and the increasing fuel efficiency of cars on the road. The gas tax can no longer support the needs of an aging system and the demands for the future. A long-term solution will take time, but there is one thing Gov. Jerry Brown and the Legislature could do now: Redirect nearly $1 billion a year in truck weight fees back to fixing our roads and highways.
These fees helped pay for highway repairs for years until budget deficits in 2010 and 2011 prompted legislation that diverted the weight fees to help offset the general fund shortfall.
The money helped the state in the budget crisis. Now, the state’s finances are in the black. Given the shortfall that severely threatens the condition of our highways, lawmakers should return weight fees to transportation.
Rather than violate the users-pay principle, as Walters asserts, redirecting weight fees would reinforce that principle and help fund critical highway repairs while saving jobs. It’s vitally important that the governor and Legislature understand how dire the transportation funding picture is and restore these weight fees to their intended purpose – fixing the roads.
Construction Industry Calls for Redirection of Truck Weight Fees
May 27, 2014
FOR IMMEDIATE RELEASE
James Earp, California Alliance for Jobs
Will Kempton, Transportation California
SACRAMENTO – In a joint letter from the California Alliance for Jobs and Transportation California, construction and labor leaders called on the Governor and the Legislature to spend existing truck weight fees on transportation projects. Weight fees paid by commercial vehicles to mitigate additional roadway damage caused by heavy trucks have been directed to the State’s General Fund since 2011. The diversion of these fees, which raise nearly a billion dollars a year, was part of a deal approved by the Legislature that eliminated the State sales tax on gasoline and replaced the lost revenue with an equivalent increase in the gas tax. The money is currently being used to pay the debt service on general obligation transportation bonds to relieve pressure on the State’s General Fund.
“These bonds were originally sold to voters as obligations of the General Fund,” stated Jim Earp, Executive Director of California Alliance for Jobs. “Now that the State’s budget picture is improving, those funds should be returned to transportation accounts for road and highway work.”
The letter expresses concern about the low priority being placed on needed transportation system repairs, and points out that for the maintenance of local streets, roads and State highways, “the single most important action the Legislature could take this year is to redirect truck weight fees back to transportation repair and rehabilitation.”
Earp said doing so was especially important for two reasons. First, it would help slow down the continuing decline of the State’s road network and second, it “will keep a core of California-based contractors and thousands of skilled construction workers on the job.” Without a more-sustainable funding situation, he said many contractors specializing in highway projects may be forced out of business.
Redirecting truck weight fees back to transportation also resonates well with voters.
“Our voter research shows that the public understands the need to invest in our existing transportation infrastructure,” stated Will Kempton, Executive Director of Transportation California, “and the public overwhelmingly wants to see taxes and fees used for their intended purposes.”
The letter concludes that there is no justification for permanently diverting money that should be going to repair and rehabilitate California’s roads.
The full letter, a 30-second video explaining the subject and more-detailed information is available at www.rebuildca.org, and clicking on the links on the “Restore Truck Weight Fees to Roads” tab.
Budget and Funding Update
May 27, 2014
Last week, the Governor released the May revision to his proposed 2014-15 Budget. In terms of the transportation program, there is virtually no change from the original budget plan the Governor submitted in January. While the Administration has projected an increase in revenue of $2.4 billion compared to January, the Governor proposes to use this money for education, Medi-Cal, retirement contributions, enhancements to the judicial system, drought relief and debt reduction. There seems to be very little interest in any transportation budget issues beyond the breakdown of cap and trade revenue distribution, how much money will be available for high speed rail and Caltrans staffing for project delivery.
In addition to the fact that there is no additional transportation funding in the Governor’s revised budget, the Department of Finance has announced its opposition to SB 1418 (DeSaulnier) which would have redirected truck weight fees back to our program. Even though there appears to be some sympathy in the Legislature to address this issue, we expect the Administration will take a similar position on AB 2728 (Perea, Linder) which puts a significant damper on our efforts to achieve a legislative answer to the question of how California spends weight fee revenues. Both bills were held in suspense in the Senate and Assembly Appropriations Committees this week. This action sets a bleak tone for achieving a legislative solution to the question of redirecting these fees.
In spite of this turn of events, Transportation California and the California Alliance for Jobs have prepared an Industry Letter for distribution to the Governor and the Legislature once again highlighting the need for additional dollars to help offset the funding shortfalls for maintenance of the existing system and to provide some resources that will retain thousands of construction-based jobs. Our intent is not only to reiterate our needs to the Administration and the Legislature, but to continue the push to recapture weight fee revenues for transportation projects. This effort, if it is to be successful, will now likely have to be done as part of the budget.
We also need to recognize and acknowledge that the Governor did accelerate the repayment of a $337 million loan (principle plus interest) borrowed from the Highway Users Tax Account, and the May revision retains that payback. Both the Senate and Assembly Subcommittees dealing with transportation issues approved the accelerated loan payback this past week. In addition, the Assembly Subcommittee approved a staff proposal to augment the loan repayment with an additional $163 million from a higher than anticipated cash balance in the State Highway Account. This augmentation is not new money, but does appropriate additional money for expenditure in the budget year. The proposal also includes a request of $1.7 million and 12 limited-term positions to support the additional capital expenditures. This issue could be problematic due to the fact that the Legislative Analyst is taking a strong position that the Department is currently over-staffed, and any increase in personnel might face some tough sledding. Nonetheless, Transportation California and other stakeholders testified in support of the augmentation.
Finally, the Senate Budget Subcommittee did recommend including in the Senate version of the budget language for Caltrans to examine the feasibility of a pilot program for testing the sale of advertising on Changeable Message Signs. Transportation California is supporting this proposal, which could produce between $200 and $400 million in revenue for the State Highway Operations and Protection Program. While there is some controversy surrounding the concept, primarily because of perceived distraction issues, the Federal Highway Administration and other agencies have conducted studies which show that distraction resulting from billboards or existing electronic signs is not significant.
As this piece is finalized, the full Senate Budget Committee is working on cap and trade and high speed rail issues. The Assembly Budget Committee meets next Wednesday. We will keep you apprised of any progress. Stay tuned.