Without Government Unions, there Would be No Gas Tax Increase

LA-Freeway-Xchange-110-105Nobody argues that California’s roads need huge upgrades. But the solution didn’t require the $0.12 per gallon tax hike that went into effect Nov. 1. The root cause of these neglected roads – and the reason even more taxes will never be enough to fix them – is the power of public sector unions, whose agenda is consistently at odds with the public interest. Let us count the ways.

1 – CalTrans mismanagement:

CalTrans could have done a much better job of maintaining California’s roads. One of the most diligent critics (and auditors) of CalTrans is state Senator John Moorlach (R-Costa Mesa), the only CPA in California’s state legislature. Last year, Moorlach released a report on CalTrans which he summarized in “7-Step Fix for ‘Mismanaged’ Caltrans,” an article on his official website. Just a few highlights include the following:

  • In May 2014 the Legislative Analyst Office determined that CalTrans was overstaffed by 3,500 architects and engineers, costing over $500 million per year.
  • While to an average state transportation agency outsources over 50% of its work, CalTrans outsources only 10% of its work. Arizona and Florida outsource more than 80%.
  • 54% of CalTrans staff is at or near retirement age, so a hiring freeze would reduce staff merely through attrition, without requiring layoffs.

But Moorlach didn’t make explicit the reason CalTrans is mismanaged. It’s because the unions that run Sacramento don’t want to outsource CalTrans work. The unions don’t want to reduce CalTrans headcount, or hold CalTrans management accountable. Those actions might help Californians, but they would undermine union power.

2 – Bullet train boondoggle:

Money that could have been allocated to maintain and improve California’s roads is being squandered on a train that will do nothing to ameliorate California’s transportation challenges. A LOT of money. According to the American Road and Transportation Builders Association, California’s freeways can be resurfaced and have a lane added in each direction at a cost of roughly $5.0 million per mile in rural areas, about twice that in urban areas.

Meanwhile, the latest estimate for California’s “bullet train,” is $98 billion (that’s $245 million per mile), thanks to construction delays, and design challenges including nearly 50 miles of tunnels through seismically active mountains to the north and south. And hardly anyone is going to ride it. Ridership won’t even pay operating costs. But Sacramento pushes ahead with this monstrous waste when that same money could (at the urban price of $10 million per mile) resurface and add a lane in each direction to 10,000 miles of California’s freeways. Imagine smooth, unclogged roads. It’s not impossible. It’s just policy priorities.

But while bad roads destroy the chassis of millions of cars and trucks, and commuters endure stop-and-go traffic year after year, the California High Speed Rail Authority dutifully pushes on. Why?

Because that’s what the government employee unions want. They don’t want roads, with all the flexibility and autonomy that roads offer. They want to create a gigantic high-speed rail empire, with tens of thousands of new public employees to drive the trains, maintain the trains, maintain the tracks, and provide security, running up staggering annual deficits. But all of them will be members of public sector unions.

3 – All rapid transit boondoggles:

In a handful of very dense urban areas around the U.S., fast intercity trains make economic sense. But most light rail schemes, along with laughably absurd “streetcar” schemes that actually block urban lanes sorely needed by vehicles, do not achieve levels of ridership that even begin to justify their construction when the alternative is using that money for better, wider connector roads and freeways. The impact of ride sharing apps, the advent of non-polluting cars, and the option of using buses to accomplish mass transit goals all speak to the superior versatility of roads over rail for urban transportation.

So why do California’s cities continue to poor billions into light rail and streetcars, when that money could be used to unclog the roads?

To reiterate: The public sector unions that run California want tens of thousands of new public employees to operate the trains and streetcars, maintain them, maintain the tracks, and provide security, running up staggering annual deficits. But doing this means that public sector union membership – hence public sector union power – will increase.

4 – CEQA reform so people can live closer to the jobs:

The median home value in the United States today is $202,700. The median home value in California today is $509,600, 2.5 times as much! There is no shortage of land in California, and the alleged shortages of energy and water are self-inflicted as the result of policies enacted by California’s state legislature. But instead of reforming California’s Environmental Quality ActSB 375AB 32, and countless other laws that have made building homes in California nearly impossible, California’s legislature is doubling down on more government solutions – primarily to subsidize either extremely high density housing, or subsidized housing for the economically disadvantaged, or both.

None of this is necessary. Outside of California’s major urban centers, there is no reason homes cannot be profitably built and sold at a median price of $202,700, and there is no reason the people living in those homes cannot drive or ride share to work on fast, unclogged freeways.

But California’s public sector unions want more regulations on home building, and they want more subsidized public housing. Because those solutions, even though inadequate and coercive, enable them to hire vast new bureaucracies to enforce the many regulations and administer the public assets. Unleashing the private sector to build affordable homes in a competitive market would rob these unions of their opportunity to acquire more power. It’s that simple.

5 – Insatiable appetite for pension fund contributions:

According to a California Policy Center study, taking barely adequate annual employer pension contributions into account, the average unionized state/local government worker in California makes over $120,000 per year in pay and benefits. But to adequately fund their promised pension benefits, employers will need to pay at least another $20,000 per employee to the pension funds. This funding gap, which equates to over $20 billion per year, is the additional amount that is required to cover the difference between how much California’s public employee pension funds currently collect from taxpayers, and how much they need to collect to keep the promises that union controlled politicians have made to the government unions they “negotiate” with. That is a best-case scenario.

It could be much worse. A 2016 California Policy Center analysis (ref. table 2-C) estimated that under a worst-case scenario, the annual costs to fund California’s public employee pension funds could cost taxpayers nearly $70 billion more per year than they are currently paying.

And by the way, California’s pension funds are themselves almost entirely under the control of public sector unions – research the background of CalPERS and CalSTRS board directors to verify the degree of influence they have. Absent significant reform, funding California’s public employee pensions is going to continue to consume every dollar in new taxes for the next several decades. The cumulative financial impact of funding these pensions is easily triple that of the bullet train’s $100 billion fiasco, probably much more.

Let’s not mince words. Government unions control California. They collect and spend over $1.0 billion every year, and spend most of that money on either explicit political campaigning and lobbying, or soft advocacy via expensive public relations campaigns and sponsored academic studies. Their presence is felt everywhere, from local transit districts to the governor’s office. They make or break politicians at will, by outspending or outlasting their opponents. At best, California’s most powerful corporate players do not cross these unions, often they collude with them.

California’s public sector unions operate as senior partners in a coalition that includes left-wing oligarchs especially in the Silicon Valley, extreme environmentalists and their powerful trial lawyer cohorts, and the Latino Legislative Caucus – usurped by leftist radicals – and their many allies in the social justice/identity politics industry. The power of this government union led coalition is nearly absolute, and the consequences to California’s private sector working class have been nothing short of devastating.

Government unions force California’s agencies to over-hire, overpay, and mismanage, because that benefits their members even as it harms the public. These unions enforce absurd policy priorities that further harm the public in order to increase their power. They are the reason California has increased its gas tax.

This article was originally published by the California Policy Center

REFERENCES

Pump bump: California drivers to pay 12 cents more per gallon starting Wednesday – San Jose Mercury, Oct. 31, 2017
http://www.mercurynews.com/2017/10/31/pump-bump-california-drivers-to-pay-12-cents-more-per-gallon-starting-wednesday/

California’s gas tax increases Wednesday – Los Angeles Times, October 31, 2017
http://www.latimes.com/politics/la-pol-ca-gas-tax-increase-political-battle-20171031-story.html

How much you’ll REALLY pay in gasoline tax in California – San Diego Union Tribune, Apr. 23, 2017
http://www.sandiegouniontribune.com/business/energy-green/sd-fi-california-gastax-20170413-story.html

What Californians Could Build Using the $64 Billion Bullet Train Budget – California Policy Center, Mar. 21, 2017
http://californiapolicycenter.org/what-californians-could-build-using-the-64-billion-bullet-train-budget/

American Road and Transportation Builders Association – FAQs, ref. “How much does it cost to build a mile of road?
https://www.artba.org/about/faq/

High-Speed Rail Delay More than Triples Planned Cost to San Jose – San Jose Inside, Oct. 2, 2017
http://www.sanjoseinside.com/2017/10/02/high-speed-rail-delay-more-than-triples-planned-cost-to-san-jose/

A 13.5-mile tunnel will make or break California’s bullet train – Los Angeles Times, Oct. 21, 2017
http://www.latimes.com/local/california/la-me-bullet-train-tunnel-20171021-story.html

California Environmental Quality Act – Wikipedia
https://en.wikipedia.org/wiki/California_Environmental_Quality_Act

State Senate bills aim to make homes more affordable, but they won’t spur nearly enough construction – Los Angeles Times, Aug. 11, 2017
http://www.latimes.com/politics/la-pol-ca-state-housing-deal-effects-20170811-htmlstory.html

California’s Public Sector Compensation Trends – California Policy Center, Jan. 2017
http://californiapolicycenter.org/californias-public-sector-compensation-trends/

What is the Average Pension for a Retired Government Worker in California? – California Policy Center, Mar. 2017
http://californiapolicycenter.org/what-is-the-average-pension-for-a-retired-government-worker-in-california/

The Coming Public Pension Apocalypse, and What to Do About It – California Policy Center, May 2016
http://californiapolicycenter.org/the-coming-public-pension-apocalypse/

John Moorlach — Government Union Costs

The California Policy Center is back with another well written piece on the power of public employee unions, Sacramento’s “Daddy” (see MOORLACH UPDATE — Secretive and Expensive Union Deals — November 3, 2017).

You know I’ve been ferreting out the disappointing data that makes California’s Department of Transportation, Caltrans, one of the most disappointing DOTs in the nation and that reform is preferred over a new tax; that I have opposed high-speed rail from the get go; that I have opposed trolleys in Orange County; that I tried a CEQA reform legislative effort last year; and you know I’ve been warning you about public employee defined benefit pension plan rising costs for more than 16 years. This piece addresses them all.

BONUS:  Recently, I have begun my own weekly podcast, “The O.C. – Sacramento Connection.” On these podcasts, I have and will continue to share my thoughts on  several issues including some of the ones in this update.

CLICK HERE to listen to my podcasts on iTunes free of charge.

INVITATION: My District Office has started a new Veterans Day tradition. Last year we had a simple afternoon ceremony at Crystal Cove State Beach to review the World War II history within its boundaries. Dan Worthington discussed the Fire Station, a WWII bunker that kept an eye on the California coast during the beginning of the war, pre-radar, to signal the alarm should the Japanese Fleet appear over the horizon. There is a similar location at Bolsa Chica and the west side of Catalina Island has ten such bunkers!

This year we have invited noted author Chris Epting to speak on the subject of “The Day the War Hit The Shore.” Orange County incurred civilian casualties stateside during WWII, an extremely rare occurrence. This tragic episode has been lost over time, but has many valuable lessons to this day.

Please attend your traditional Veterans Day ceremonies at the eleventh hour of the eleventh day of the eleventh month on Saturday. If you want an afternoon break, join us at 3 p.m. We’ll meet at 21871 Newland Street in Huntington Beach. There should be some parking spaces at the neighboring wildlife center.

We will also have surviving family members present of those who were lost to this unique chapter in WWII local history. If you enjoy local Orange County history, this will be a relaxed setting to actually share war stories. Please RSVP with Aly Henderson at aly.john@sen.ca.gov or 714-662-6050.

Pothole Coast Highway: California Faces an Infrastructure Crisis

Pot hole in residential road surface

The Pacific Coast Highway stretch between Dana Point in Orange County, Calif., at the southern end, and Fort Bragg in Mendocino on the northern end, “is a bucket-list trip,” the New York Daily News enthused two years ago. “Stretching 650 curve-hugging, jaw-dropping miles along the ruggedly beautiful central coast of California, Highway 1 is one of the most scenic roads in the country.”

What the newspaper didn’t mention is that anyone winding along California roads might think that the Big One has already hit. Streets and highways across the state are in awful shape: a cracked, crumbling mess pock-marked with potholes, which tend to grow larger due to time, weather, and government negligence.

Some potholes grew so monstrous after recent heavy winter rains that California Highway Patrol officers in Oakland actually named one — “Steve.” They should have called it “Jerry,” after Governor Brown, who has done little about the state’s failing infrastructure except talk about it, while continuing to seek funding for a costly and unnecessary high-speed rail system. A bit of help for the weary motorist who’s thinking about making a justifiable claim against Caltrans for the damage it’s done to his car? Not in Brown’s California. Chapman University professor and City Journal contributing editor Joel Kotkin wrote last year in the Orange County Register that Brown’s goal “is to make congestion so terrible that people will be forced out of their cars and onto transit.”

Not all of California’s infrastructure problems can be blamed on the winter weather. In 2015, in the midst of a withering drought, the Mercury News reported that a family’s car hit a “killer pothole” near Sacramento with such force that its airbags inflated. Repairs would have cost nearly $15,000, so the insurance company wrote if off as a total loss. Though that might sound like a one-off event, California roads are indeed wrecking cars. “Deficient roads” in the Los Angeles area cost motorists an average $2,800 in annual repair costs. The state implicitly admits that its roads are a mess through a law that enables car owners who feel they’ve “lost money or property as a result of any action or inaction by Caltrans” to make five-figure claims against the agency.

The Reason Foundation, which for decades has rated road conditions across the country, ranked California roads 42nd in the nation in its 22nd Annual Highway Report. The state is 45th in rural-interstate pavement condition, 48th in urban-interstate pavement condition, and 48th in congestion in urbanized areas, the study says. “Half of the nation’s rural interstate mileage in poor condition is located in just five states,” says Reason’s Adrian Moore, and California is one of them. Media reports say that nearly 60 percent of the roads need repair. Will Kempton, a former Caltrans director, told the Los Angeles Times in February that road conditions were the worst he’d ever seen.

Roads aren’t the only infrastructure breaking down in California; its dams are no longer trustworthy. The Oroville Dam in the Sierra Nevada foothills almost failed this winter when its main spillway fell apart. It didn’t, but its near-collapse was a warning, as the New York Times reported, that the state’s “network of dams and waterways is suffering from age and stress.” The San Francisco Chronicle said a year ago that “there are 200 dams in California that are at least partially filled with mud and are approaching the end of their working lives.”

This isn’t a surprise to policymakers, who’ve been on notice for some time. According to the Association of Dam Safety Officials, California had 334 “high-hazard potential” dams in 2005; by 2015, 678 earned that designation. Officials were told in 2005 that the emergency spillway at the Oroville Dam posed a serious risk.

Also vulnerable are the state’s levees, especially those in the Sacramento-San Joaquin River Delta network. Problems in this patchwork of largely muddy banks, built by farmers rather than civil engineers, put much of the state’s water supply at grave risk.

Rather than fix the state’s vital artery system and shore up its dams and levees, Brown and other policymakers prefer to focus on the shiny bauble of high-speed rail and a fanciful mixture of mass transit and bike lanes in an effort to move Californians out of their cars and into forms of transportation favored by Sacramento’s political bosses. Those who resist the agenda because they want to maintain the freedom facilitated by cars are likely to be hit with a new fuel-tax hike (in a state that already has some of the highest fuel taxes in the country).

More taxes, tolls, or user fees might be tolerable if the additional dollars improved the roads. But California has a history of taxing motorists to pay for pet projects that have zero connection with improved street and highway conditions. The Golden State’s existing patterns of density and sprawl have made reliance on car travel a necessity for most residents. Mass-transit advocates can wish for magical people-moving networks that will make cars obsolete, but the state’s planners need to focus on repairing the infrastructure we already have before they start implementing their dreams of a shining California future.

California: Time for a Major Change in Course

Governor Jerry Brown, California Attorney General Xavier Becerra, legislative and other government officials are fixated on battling the new administration in Washington with almost total disregard for California’s major problems and unmet needs. Failure to address these pressing problems threatens the viability of a state whose status is rapidly being transformed from “golden” to “tarnished.”

To help the political class refocus on the important, here is a list of the most exigent problems accompanied by modest solutions, as compiled by a couple of veteran taxpayer advocates who speak with, and hear from, thousands of California taxpayers.

  • car highway roadRoads & Highways – Just about any road trip one drives on in California confirms that we have gone from a world leader in highway capacity and quality to barely a third world contender. Major changes are in order. Our gasoline tax must be dedicated to roads and highways alone, not to other general fund uses like paying off state general obligation bonds, as is now the practice. Also, Senator John Moorlach’s demands to reform Caltrans should be a top priority. California spends 4.7 times as much per mile of state highway than the national average, according to the Competitive Enterprise Institute, and a 2014 government report concluded the transportation agency was over-staffed by 3,500 positions. Additionally, we should end the practice of requiring “prevailing wages” on public works projects, which are estimated to add up to 20 percent on every road and other public improvement.
  • Energy Costs – Gasoline formulation requirements, “cap and trade” and other responses to climate change must be revisited with demonstrable science and hard-headed realism to help low and middle income Californians who struggle with the costs of transportation and household energy. This is not climate change denial, but rather a recognition that it is patently unfair to burden the citizens of one state with the entirety of a global problem.
  • Business Regulations and Lawsuit Abuse – Manufacturing restrictions, wage and salary rules, workers’ compensation standards, frivolous lawsuits and “sue and settle” standards have driven the aerospace and most other manufacturing industries out of California. Time for tort and regulatory reform to establish a business-friendly climate that will encourage refugees to return and lure others to relocate here. Note: The Nestle Corporation has just announced it is moving its U.S. headquarters from Glendale to Rosslyn, Virginia taking hundreds of high paying jobs with them.
  • Land Development and Housing Costs – The mid ‘70s pioneering California Environmental Quality Act has created a nightmare for those seeking affordable, conveniently located housing, workplaces and shopping centers. It has been used as a weapon by environmentalists, competitors, “NIMBYs” and labor organizations to limit – and dramatically drive up the cost of homes, apartments and other needed facilities. Fortunately, despite the best efforts of some in Sacramento, Proposition 13 remains on the job protecting homeowners from runaway property taxes that could force them from their homes.
  • Public Transit – Gov. Brown’s “Bullet Train to Nowhere” is in a death spiral due to lack of public support, refusal of the federal government and the private sector to provide additional funds, and out of control costs due to mismanagement, malfeasance and insurmountable engineering hurdles. But fixed route/fixed rail transit remains part of the liberal social planners’ mantra. Other than in highly congested urban areas, public transit is unjustifiable in terms of both capital and operating costs. With the advent of Lyft, Uber, self-driving cars and even Elon Musk’s Hyperloop — that, within a few years, could move passengers at a faction of the cost of rail — private companies and entrepreneurs are offering answers to the mobility problem. This justifies placing renewed emphasis on fixing and expanding our highway system.
  • Education Improvements and Cost Control – “School choice” is the answer to improving K-12 student learning results. The political clout of the California Teachers Association and other teacher unions has blocked progress. Properly framed ballot initiatives may be the only realistic avenue to reform as we must stop the automatic and mindless Proposition 98 commitment of nearly half of general fund revenues – regardless of need – to K-12 and community colleges.
  • Public Employee Wages, Benefits and Pension Reforms – Public sector compensation costs for California, at both the state and local levels, are now clearly unsustainable. According to the Department of Labor, California state and local employees are the highest compensated in all 50 states. Pay, benefits and pensions of public employees have become disproportionate to their private sector counterparts who foot the bill. Adding to the approaching calamity is mismanagement – which has included criminal bribery – at CalPERS, the state’s largest public employee pension fund. Politically motivated investment strategies and fanciful predictions of return on those investments have left taxpayers on the hook for hundreds of billions of dollars in unfunded liability for current and future retirees. Consideration must be given to shuttering CalPERS and fairly allocating to each current employee their share of the retirement funds, arranging for the public employer to make up the difference for what has been promised to date, and move from “defined benefit” to “defined contribution” plans for all existing and future employees. Otherwise, this pension burden has the potential to grow so large that California will not be able to fund the most basic services and as residents flee to other states, the last one out will be asked to turn out the lights.

We call on our representatives to stop pursuing discretionary causes and pet projects and come to grips with these real problems facing all Californians.

Lewis K. Uhler is Founder and Chairman of the National Tax Limitation Committee and National Tax Limitation Foundation. He was a contemporary and collaborator with both Ronald Reagan and Milton Friedman in California and across the country.

Jon Coupal is the President of the Howard Jarvis Taxpayers Association. He is a recognized expert in California fiscal affairs and has argued numerous tax cases before the courts. 

This piece was originally published by HJTA.org

California Transportation System Improves – But Still Ranked Low By New Study

Infrastructure constructionSACRAMENTO – Despite its well-documented inefficiencies and travails, California’s Department of Transportation (Caltrans) has managed to improve the state’s system of roads, bridges and freeways incrementally in recent years, according to a newly released annual survey of state highway systems by the free-market-oriented Reason Foundation.

Reason’s 22nd Annual Highway Report ranked California 42nd. While this is still in the lowest category, the ranking has steadily improved over the years, moving up from a low of 46th. Because of data-collection delays, the rankings only go through 2013.

The study measures a number of important factors: Road conditions on freeways and primary commercial highways, the state of each state’s bridges, fatality rates and various costs per mile – administrative, maintenance, capital costs and expenditures.

California has done particularly poorly on the spending side of the equation. It ranked 44th in total disbursements per mile; 43rd in maintenance disbursements per mile; 40th in capital and bridge disbursements per mile; and 47th in administrative disbursements. That reinforces a California state auditor study from last summer showing that Caltrans may have as many as 3,500 unnecessary job positions.

The state’s overall per-mile capital and bridges cost totaled nearly $170,000 – far costlier than highest-ranked South Carolina, at nearly $21,000, or middle-ranked Utah, at nearly $78,000. But California wasn’t nearly the worst. Worst-ranked New Jersey spends $839,000 per mile; Florida spends more than $380,000; and Illinois spends nearly $202,000. On administrative costs, California spends more than $47,000 per mile, compared to $1,107 per mile in top-ranked Kentucky and $3,762 in 10th ranked Texas.

On the bad side, California had one of the highest proportions of rural interstate mileage in poor condition, at 6.52 percent. Its urban interstate mileage in poor condition was even worse, at 13.32 percent, which isn’t a surprise to anyone who regularly navigates the Los Angeles, San Diego or Bay Area highway systems. The survey only looks at state-owned highway systems, not at the myriad local and regional systems that are in various conditions.

“The good news is that California reported the lowest percentage of deficient bridges of any state in the nation,” according to Reason Vice President Adrian Moore, writing in the Orange County Register. California also ranked 10th in highway fatalities with a rate of 0.9 per 100 million vehicle miles. The best performance was in Massachusetts, with 0.58 fatalities per 100 million miles and the worst was Montana, with 1.9 fatalities per 100 million miles. Those rates, however, have been dropping nationwide.

One of the survey’s authors, Reason Senior Fellow David T. Hartgen, told me Caltrans didn’t do anything dramatic between 2012 and 2013 to explain the rating improvement – but it did improve a significant number of bridges and roadways.

“A widening performance gap seems to be emerging between most states that are making progress and a few states that are finding it difficult to improve,” according to the report’s authors. “There is also increasing evidence that higher-level road systems (Interstates, other freeways and principal arterials) are in better shape than lower-level road systems, particularly local roads.”

The good news: California is among those states that are improving. The bad news: It has an extremely long way to go to reduce congestion and bring state and local roads up to snuff. On a controversial note, California’s recently released transportation plan seems to downplay the importance of expanding the state’s highway and road infrastructure.

The “California Transportation Plan 2040” focuses more on battling climate change than on expanding the state’s already clogged network of highways. “By 2040, California will have completed an integrated rail system linking every major region in the state, with seamless one-ticket transfers to local transit,” wrote Transportation Secretary Brian Kelly.

“Responding to the desires of millennials and aging baby boomers alike, we will further invest in complete, safe pedestrian and bicycle networks,” Kelly added. He also promised a new approach toward lowering maintenance costs on roads and bridges. But the state’s blueprint relies heavily on alternative transportation sources, rather than on freeways and road construction, given the “transportation system must do its part to reduce these threats (climate change) to our environment and health.”

Other reports paint a mostly gloomy picture of California’s transportation situation. Last year, the Senate Transportation and Infrastructure Development Committee – during a special session designed to come up with additional funding for transportation programs – reported that “54 of California’s 58 counties have an average pavement rating of ‘poor’ or ‘at risk,’ with much of this deterioration occurring over the past six years.”

Reason found California to top the national charts on bridge condition, but the state Senate pointed to 3,000 “structurally deficient bridges.” The committee pointed to an expected doubling of freight moved on California’s freeways (from 2002 to 2035), to suggest that the state’s infrastructure will face an accelerated level of deterioration.

The session failed to come up with a long-term funding solution, but that will no doubt be a top item for the Legislature next year.

Steven Greenhut is Western region director for the R Street Institute. He is based in Sacramento. Write to him at sgreenhut@rstreet.org.

This piece was originally published by CalWatchdog.com

Engaging in Transportation Reform Head On

california roads infrastructureLast week’s column presented the case for strong opposition to any new transportation taxes in California. But on Thursday, the Executive Director of Transportation California, Will Kempton, published a response in Fox and Hounds, a California political blog run by Joel Fox, which repeated the need for higher taxes.

Will Kempton is a respected transportation expert who agrees with the central premise of my original column. That is, that California’s transportation crisis can no longer be ignored. California has a transportation and road repair maintenance backlog that some estimate will total $58 billion over the next ten years. It is also true that, thanks to alternative vehicles and more fuel efficient cars (and never mind the infamous “gas tax swap”) that fuel tax revenues have become more volatile year-over-year.

So, now that we’ve agreed on the need, how do we deal with it? Mr. Kempton argues that we have no choice but to raise taxes. Not only do we disagree, but it is abundantly clear that practically all of this backlog can be funded using existing General Fund resources. Consider:

  • Nearly $1 billion a year of truck weight fees are being diverted from road repair to paying off transportation bond debt. Total: $10 billion over ten years.
  • Nearly $9 billion in bonds for high speed rail can be diverted for road construction. (And if voter approval is deemed necessary, that measure passes in a heartbeat).
  • Currently, California spends only 20 percent of its $10 billion General Fund transportation budget on road maintenance. Especially with General Fund revenue at record levels, a boost to 50 percent does not seem excessive: Total: $30 billion over ten years.
  • Currently, $500 million in $3 billion worth of cap-and-trade funding goes to road maintenance. Doubling that amount adds $5 billion over ten years.

The grand total of these reforms is $54 billion over ten years. Granted, not all of these things can be done overnight and the first two items will likely require statewide voter approval. But the Legislature still has plenty of time to qualify a constitutional amendment for the November ballot. And obviously, placing a greater General Fund emphasis on transportation projects will require that we figure out how to prioritize our resources better in the face of a record $122 billion budget.

Let’s be honest. It is really the word “prioritize” that is at issue here. Some of these reforms will be easier to implement than others, but unless we engage them head on, which hasn’t happened in the Legislature, how can we ever hope to solve this problem? Taxpayers should refuse to accept the incessant call for higher taxes when relatively simple reforms that could add tens of billions of dollars of funding to our roads, without raising taxes, are ignored. How can we discuss a punitive and regressive gas tax increase when common-sense legislation by State Senator John Moorlach to privatize a small portion of CalTrans projects, or to  establish a pilot project to have county transportation agencies assume projects from CalTrans, are quickly rejected in their first policy committee?

We agree with Kempton that the status quo is no longer acceptable. But there are a myriad of fiscal and policy changes that are viable and should be discussed and implemented. And until legislative Democrats, the transportation community, labor and environmentalists are willing to even come to the table, why should the burden be on California motorists to pay higher taxes?

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece was originally published by HJTA.org

Excessive State Budget Pushed Forward by Dems

BudgetThursday, Sacramento Democrats all voted in support of a budget that has an unknown cost, but is estimated to easily exceed the governor’s record-level budget spending that he proposed just two weeks ago. The Assembly’s current budget proposal is essentially a blank check committed to using record levels of taxes collected for a laundry list of bloated bureaucracies and wasteful projects.

This new budget proposal hides unilateral government plans to increase fees on every car owner and taxes on every cellphone user in California. Wasteful projects like the high speed rail are rewarded with $145 million of additional largesse. Furthermore, mismanaged bureaucracies such as Caltrans receive increased funding with zero oversight while California drivers experience worst in the nation traffic conditions.

On top of the $10 yearly vehicle registration fee hike and nearly 400 percent cellphone tax increase, some of the other highlights from the Democrats’ “Blank Check” Budget include a $145.2 million appropriation for high-speed rail, $2.1 billion for an “optional” Obamacare expansion, and an additional $3.2 billion for the recently raised minimum wage.
Undoubtedly, the constant flow of high profile businesses leaving California will only accelerate with the Legislative Democrat’s budget proposals. Costly new mandates like the $15/hr minimum wage and highest in the nation taxes have prompted CEO magazine to once again name California as the worst state in which to do business, a distinction it has held every year the survey has been conducted.

Simply put, California voters need to clearly understand that the Democrat agenda of higher taxes, unending regulations, and “blank check” government spending has led California off the cliff and resulted in massive debt, job scarcity, and the nation’s highest poverty rate. June and November elections are coming, and it’s time for Californians to stand up and just say no to Democrats and their free spending ways.

This piece was originally published by the Flash Report

Government Waste Negates Justification for Transportation Tax Hike

LA-Freeway-Xchange-110-105A personal digression: My father was head of the Iowa Department of Transportation (then called the Iowa Highway Commission) in the late ’60s and early ’70s before he was appointed by President Ford to serve as Deputy Federal Highway Administrator. (Of course, he lost that job when Jimmy Carter became president, but he continued to work in the private sector for a transportation think tank.) When I was in high school, I remember him coming home from an ASHTO conference. That organization, the Association of State Highway and Transportation Officials, was a pretty well respected group and still is. He was complaining bitterly about what was going on in California. I don’t recall his exact words, but the gist of it was that the new head of California’s transportation agency, called CalTrans, had been taken over by a certifiably crazy person (with no background in transportation policy) by the name of Adriana Gianturco. According to my father, in the 1950s and ’60s, California had the best transportation agency in the entire world. But all that changed with the election of a new, anti-growth, small-is-beautiful governor by the name of Jerry Brown.

Now, fast forward 40 years. Gov. Brown, version 2.0, proposes a budget that assumes a big increase in transportation taxes and fees. The California Legislature shouldn’t just say no, it should say hell no.

Where to start? First, let’s take judicial notice of the fact that California is already a high tax state with the highest income tax rate and the highest state sales tax in America. But more relevant for the issue at hand, we also have the highest fuel costs in the nation. This is because of both the 4th highest excise tax on fuel and the fact that refineries are burdened with additional costs to comply with California’s environmental regulations.

The high cost to drive in California might be understandable if we were getting value for our tax dollars. But we aren’t. A big problem is that Caltrans is dysfunctional, plain and simple. It has never fully recovered from the days when the agency was effectively destroyed by Gianturco. A report by the California State Auditor just a couple of months ago concluded that a primary responsibility of Caltrans – maintenance of our highways – is not being executed in a manner that is even close to being efficient or competent. Senator John Moorlach, the only CPA currently serving in the California legislature, reacted saying that “This audit reinforces the fact that our bad roads are not a result of a lack of funding. They’re a result of a lack of competence at Caltrans.” Moreover, a report by the Legislative Analyst concluded that Caltrans is overstaffed by 3,500 employees costing California taxpayers over a half billion dollars a year. All this compels the obvious question: Why, for goodness sake, do we want to give these people even more money?

Another unneeded and costly practice consists of project labor agreements for transportation construction projects. These pro-union policies shut out otherwise competent companies from bidding on projects resulting in California taxpayers shelling out as high as 25% more than they should for building highways and bridges.

Finally, California’s environmental requirements are legendary for their inefficiency while also doing little for the environment. Exhibit A in this foolishness is Gov. Brown’s incomprehensible pursuit of the ill-fated high speed rail project. Not only has the project failed to live up to any of the promises made to voters, it is currently being kept alive only by virtue of the state’s diversion of “cap and trade” funds which are supposed to be expended on projects that reduce greenhouse gas emissions. But in the Kafkaesque world of California transportation policies, the LAO has concluded that the construction of the HSR project actually produces a net increase in emissions, at least for the foreseeable future.

No one disputes the dire need for improvements in California’s transportation infrastructure. But imposing draconian taxes and higher registration fees that serve only to punish the middle class while wasting billions on projects that don’t help getting Californians get to work or school cannot and should not be tolerated. Legislators who present themselves to voters as fiscally responsible need to understand that a vote for higher transportation taxes will engender a very angry response from their constituents.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piecd was originally published by the Howard Jarvis Taxpayers Association

It’s Time to Shift Road Funding to Counties

los-angeles-freeway-helicopter-1Last week, yet another high-profile scandal involving mismanagement rocked the California Department of Transportation – Caldrons, and yesterday I  introduced Senate Bill 1141, which would launch a pilot program shifting road funds and maintenance duties from Caltrans to county governments.

Caltrans is one of the worst managed, most inefficient government agencies in the nation.  Just look at the metrics. Californians pay among the highest gas taxes and the highest per-mile road maintenance, yet we also have the nation’s fifth worst roads.  Those are clear signs that Caltrans is dysfunctional and wasting taxpayer money.  If Caltrans was a private company, it would have been out of business long ago.

SB 1141 would launch a pilot program that allows two California counties to handle their own road maintenance needs, and to receive the road funding that typically would have been administered by Caltrans for those maintenance needs.

County governments are much more accountable to the taxpayers than the bureaucracy at Caltrans. County governments know their needs and have a history of getting the job done. Senate Bill 1141 allows counties to prove they can do much better than Caltrans.

Last week, the State Auditor found that Caltrans had intentionally lied to legislators about implementing the results of a 2009 efficiency study – one that recommended moving money and manpower to the highest need areas and managing efficiencies to help fix roads with the existing resources.  Caltrans management reassured legislators that they were implementing the study’s recommendations, when, in fact, they had ignored them altogether and continued with an inefficient, labor-union friendly resource allocation.

Auditors also found that Caltrans has little, and often no, cost control measures, and that Caltrans often fails to even track project costs.  The State Auditor is telling it straight when she says there are ‘weak cost controls’ that ‘create opportunities for fraud, waste and abuse.’ Sixty-two percent of Caltrans projects are over budget, and now we are beginning to know why.  We can no longer tolerate this nonsense. It’s time to provide constructive and necessary solutions.

SB 1141 would provide a real-world study on moving resources to counties and making our road dollars stretch much further.  More information on SB 1141 can be found HERE.

California State Senate, 37th District

Originally published by Fox and Hounds Daily

Controversial New Program Will Track Your Driving — For Tax Purposes

carpool-laneAs state drivers’ changing habits undermined roughly a hundred years of gasoline taxes, California officials debuted a controversial new pilot program designed to make up the difference.

“The state of California is looking for 5,000 volunteers this summer for an experiment with potentially major pocketbook ramifications,” the Sacramento Bee noted. The so-called California Road Charge pilot program, proposed by the state Legislature, has tasked “Caltrans and other transportation officials to set up a nine-month test to see what it would be like if drivers paid for state road repairs based on how many miles they drive in their cars or trucks rather than how many gallons they buy at the pump.”

Aiming for a July start and a nine-month run, the program “already has a list of 4,300 people who are game,” according to Next City. “Participants will continue to pay the pump tax, but receive simulated monthly statements detailing how much they would pay under a road usage system.”

Losing gas

With gas prices, gas taxes and gasoline usage all sinking, lawmakers have labored to settle on a different way to collect revenue from road usage. “In California, drivers now pay 30 cents per gallon, plus 18 cents a gallon in federal tax,” the San Francisco Chronicle reported.

“Not only are politicians averse to raising the tax — which hasn’t been bumped up since 1994, with polls showing extreme distaste from voters — but also the continuing rise in fuel efficiency and the boom in electric vehicles ensure the steady evaporation of revenues even as more cars roll up more miles on the road. Gas taxes are expected to bring in $4.5 billion this fiscal year, 16 percent less than last year and 21 percent less than in 2014. Projections call for revenues to drop another 6.5 percent in the coming year.”

Just last month, regulators signaled the shifts to come by throwing their weight behind a further drop in the gas tax. “California drivers will pay 2.2 cents less per gallon of gasoline, starting in July, after a divided Board of Equalization voted to cut the excise tax,” according to U-T San Diego.

“‘Lowering the rate is the right thing to do and I’m sure Californians will welcome this reduction,’ board vice chair George Runner said in a statement after the agency voted 3-2 to pass the reduction that was recommended by BOE staff.”

Making the transition

From a regulatory standpoint, moving toward a per-mile tax would offer an additional advantage — a relatively smooth and seamless transition from a logistical and bureaucratic standpoint. Of the four vendors recruited to track mileage in the new pilot program, three “are already providing bonus services to fleet managers based on vehicle data,” according to Techwire.net.

“Azuga currently offers fleets a device they plug straight into a vehicle’s OBDII computer — a standard component in all vehicles made after 1996. Aside from automatically reporting mileage back to fleet managers, the computer is what alerts drivers to specific problems in the engine and can also offer information about what’s going on under the hood,” the site noted. “Two of the other companies signed up to track the mileage of participants in California’s test program, Intelligent Mechatronic Systems and EROAD, offer similar services. The fourth vendor, Arvato Mobility Solutions, will manage the accounts.”

Although privacy advocates have expressed skittishness and dismay, many Californians have grown accustomed to their driving habits being monitored electronically. California Road Charge will offer “the option to allow the state to monitor their in-vehicle computer, tracking where they go so they aren’t charged for the use of private or out-of-state roads,” Next City noted. “Recognizing that many will see this as an intrusion on their privacy, the state is testing other ways to collect this data, like periodic odometer reading verifications. California will also experiment with offering drivers weekly or monthly ‘all-you-can-drive’ passes.”

This article was originally published by CalWatchdog.com