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.
May 20, 2014
On May 15-16, the California Foundation on the Environment and the Economy (CFEE) held a conference in Sonoma, California to discuss the future of private investment in our transportation infrastructure. The event was attended by public agency representatives, members of the State Legislature and private consultants and transportation advocates. Will Kempton, Executive Director of Transportation California, provided the opening presentation, describing the nature of California’s transportation system, the uses of the system, the needs we face and the funding challenges we need to address. At the conclusion of the conference, there was general consensus that we need to extend and streamline authority for public-private partnerships in California and Transportation California will continue to work with other stakeholders to achieve that objective.
Senate panel backs transport bill to maintain funding
May 19, 2014
Reauthorization season opens with six-year bill from senate committee
(Reuters) – A U.S. Senate committee passed a six-year transportation bill on Thursday that would keep federal spending on highways and mass transit at current levels but does not tackle the looming shortfall in the Highway Trust Fund. The Senate Environment and Public Works Committee voted with bipartisan support to advance the legislation, which would spend about $53 billion a year and adjust for inflation, to the full Senate. It is not clear when the Senate will consider the bill. Other committees in the Senate and House of Representatives are working on ways to pump money into the trust fund, which pays for about 45 percent of what U.S. states spend on roads and bridges and is forecast to run out of money by the end of August.
Transportation Secretary Anthony Foxx warned this week that 700,000 jobs could be lost if Congress lets the trust fund run dry, which would hamper efforts to rebuild America’s crumbling infrastructure. Foxx this week criticized the Senate bill. “America has been waiting on a bigger solution,” he said.
Read more here.
Highway funding battle may end in gridlock
May 12, 2014
A slow-motion pile-up is coming into view on U.S. highways and Capitol Hill this summer: federal funding for road construction is running out and Congress faces a big fight over how to replenish it. The trucking industry, many state transportation directors and even a few lawmakers say the simple solution to shore up the Highway Trust Fund and avoid construction layoffs is to raise federal fuel taxes, unchanged since 1993. But in a congressional election year in which both Democrats and Republicans are wary of voter backlash, the message is clear: Not going to happen.
Read more in Reuters here.