Why California’s Dams are Breaking

Oroville Dam 2Here’s a study you may find interesting:

Among all states, California spends the lowest percent of its budget on infrastructure, according to a report last year from the Center for Budget and Policy Priorities.

The Golden State invested only 3.3 percent of its budget in 2013 on infrastructure, one of only three states that spent less than 4 percent. Texas, the most comparable state in size and population, spent almost twice as much at 6.4 percent.

We can easily see the result of this neglect. California’s roads and bridges are among the worst in the country, and the Oroville dam’s two spillways, when finally called upon to work in February, were quickly rendered useless, creating the potential for a devastating flood.

Incredibly, the state was warned in 2005 that the emergency spillway at Oroville was totally inadequate. Three environmental groups pointed out that because the spillway is a hill of bare dirt and not covered in concrete, that dirt would quickly erode as soon as water hit it, creating a potential lake-draining catastrophe. And that is exactly what happened, forcing officials to evacuate nearly 200,000 people downstream.

Despite the warning, the state chose to do nothing for 12 years. For that matter, the state has done little over the years to capture more water to supply the increasing population. That means a good deal of the heavy rainfall from this winter is draining into the ocean.

To his credit, Gov. Jerry Brown did admit recently that the state has not spent what it should on infrastructure and there is now $187 billion worth of unmet needs. Continued failure to invest, he said, could lead to an “apocalypse and absolute disaster.”

And to their credit, the state’s business community has long pushed for more infrastructure investment, seeing it as the foundation for a sound economy.

So now everyone agrees that something needs to be done. The only real question is how it will all be paid for. You can almost predict where this is headed: The legislature will push for some kind of tax increase. Even though the state has a record general fund budget and even though legislators have diverted money from infrastructure for years, the statehouse gang will cry that they just don’t have the money to pay for it all. Lack of money. That’s the problem, they’ll say.

Well, here’s another study you may find interesting:

Among all states, California collects the sixth-highest amount of tax money on a per capita basis, according to the Tax Policy Center, a left-leaning think tank.

In other words, the state already taxes its people and businesses heavily. Money is not the problem. Spending is the problem.

ditor and publisher of the San Fernando Valley Business Journal.

This piece was originally published by Fox and Hounds Daily

To Prioritize Infrastructure, Consider All State Spending

Infrastructure constructionNotable in the reaction to Governor Jerry Brown’s Friday press conference outlining money for dam and water infrastructure, while declaring the need for California to tackle all its infrastructure backlog, was the response from one of the leaders of the fight for improved infrastructure. California Business Roundtable president Rob Lapsley issued a release echoing the governor’s call on structural improvements and cost, but focused on “the real issue at hand” — state spending.

Everyone agrees that California infrastructure needs repair and the money to make those repairs happen. The debate is over how to fund repairs and build projects.

Negotiations on reaching a deal on funding infrastructure improvements have been going on for some time and business community leaders have been deeply involved. Meanwhile, the more open debate on infrastructure funding continues with the capitol generally separated into two camps, one headed by Democrats who want tax increases and the other by Republicans who want to redirect current funding for infrastructure purposes.

However, Lapsley broadened the debate by discussing overall state spending as part of a larger fix for funding the state’s priorities.

Laplsey wrote, “California is one of the highest taxed states in the nation and, even after passing even more taxes through Prop 55 last November, the state is effectively out of money. We have record general fund and special fund revenues, but it has been decades since infrastructure investment was a priority in our state budget.”

While pledging to support the Brown Administration’s efforts to secure infrastructure dollars from Washington, Lapsley wrote, “we need an honest rational discussion in the Legislature on how to pay for state salaries, pensions and pension debt, health care, dams, flood control, roads, transit, schools and other infrastructure needs while expediting solutions through real regulatory reform that apply to all economically important projects, and not just the politically favored few.”

California’s infrastructure, as California Chamber of Commerce president Allan Zaremberg noted in a release tied to the governor’s press conference, “is a key component of maintaining and improving California’s economy for everyone’s benefit.”

Simply put, infrastructure improvements must be a priority of state spending because the improvements benefit all Californians economically and on safety issues.

Lapsley rightly points out infrastructure has been a low priority for California lawmakers for some time. That has to change.

The change will have to include discussing spending on all other programs in this high tax state. We must consider the spending on pensions and salaries and debt and all the issues Lapsley raised if we are to focus attention on the paramount needs of infrastructure. In the end, improving infrastructure would advance the economy, which in turn would benefit all the other areas funded by the state budget.

Editor of Fox & Hounds and President of the Small Business Action Committee.

This piece was originally published by Fox and Hounds Daily

California Needs Infrastructure, and Unions Should be Helping

Road work“Infrastructure” is a perennial topic that enters and leaves California’s public consciousness in the following manner: A politician says “we must rebuild our crumbling infrastructure,” journalists report it, almost nothing is done, and the infrastructure continues to crumble. The talking point is made. Check the box. Repeat. Decades pass.

If you’ve driven west on Interstate 580 from California’s central valley into the San Francisco Bay Area, “infrastructure” becomes more than a hard-to-pronounce, sort of awkward sounding four syllable word that emanates from the mouths of politicians every election cycle. Because the divots, pot-holes, fissures and bumps on Interstate 580 west are impossible to ignore. The road is literally falling apart.

It isn’t enough to marvel at how Californians tolerate this negligence. Because it harms our quality of life. Today the failure is measured in terms of how many cars and trucks require far more frequent maintenance to repair their battered suspensions because we can’t fix our roads. Today it’s short showers and annoying light switches that turn off automatically because we won’t build new water and power infrastructure. But tomorrow it could be a catastrophe, as entire regions are potentially denied water, power or transportation, because over time, less and less viable infrastructure became critical to supporting more and more people.

Why? Why have California’s policymakers paid lip service to infrastructure for the last 20-30 years, all the while watching it crumble? Here are three reasons:

(1) Environmentalists provide the moral cover for neglect. There isn’t a road, a bridge, a power plant, a port upgrade, new housing, a water treatment plant – not one scratch in the ground that isn’t bitterly contested by the environmentalist lobby. Powerful environmentalist organizations, often receiving government funds, with opportunistic trial lawyers populating their boards of directors, have an incentive to tie every possible infrastructure investment up in knots. While some environmental oversight is necessary, the challenge of complying with every environmentalist objection deters all but the wealthiest corporations, and creates costly delays that last for decades.

(2) Many corporate special interests benefit from neglect. Corporations who own existing sources of supply can charge higher prices and generate higher profits. Utilities are the obvious examples of this – ever since “decoupling” legislation was passed in California, the only way utilities can generate higher profits is to raise unit costs, since unit output and profit percentages are fixed by law. So if water costs $2.00 per CCU instead of $0.25, or if electricity costs $0.50 per KWH instead of $0.05, utility companies make a killing for their shareholders. Similarly, owners of land that has finally been approved for development, or quarries that got operating permits before the regulations made them prohibitive, are able to sell their inventory at fantastic markups.

(3) Public sector unions also benefit from infrastructure neglect. Taxpayer funds that ought to be paying to construct and upgrade roads and bridges end up being allocated instead to pay government workers higher salaries and fund generous pensions. These unions also benefit from the legislated and entirely artificial scarcity that drives up prices for land and homes, because it increases property tax revenue. And of course, every additional environmentalist inspired regulation and code means more unionized government inspectors and enforcement officers can be hired. Government over-management and mismanagement always benefits public sector unions.

So where is California’s private sector labor movement when it comes to infrastructure? Here is a quote from the California Labor Federation’s website, under “Advocacy / Key Issues.” Revealingly, this is number ten of ten on their “issues” page:

“Invest in California’s Infrastructure: We must have a comprehensive strategy for making investments in infrastructure and a sustainable, equitable way to finance them. We need to restore our public transportation systems, modernize our rail system and rebuild our roads and waterways. We must double our efforts to build high speed rail in California.”

Apart from “high speed rail,” a project that fails to justify itself under any rational cost/benefit analysis, this all sounds good. But where’s the follow up?

When scoping meetings are held to approve infrastructure projects, whether it is widening a highway, approving a new subdivision, repairing a bridge, or building the Temperance Flat or Sites reservoirs, where are the unions? Why aren’t hundreds of them showing up two hours early to these meetings, elbowing the environmentalist trial lawyers and their zealous puppets out of the room? Why aren’t they packing the out-of-control California Air Resources Board meetings to show solidarity with the workers in dairies, agriculture, manufacturing, mining and timber, trucking, and countless other industries who employ hundreds of thousands of Californians?

Instead California’s labor unions typically resort to “greenmail,” a tactic that goes as follows: Pick a project that the environmentalist lobby doesn’t actually object to, then sue the developer on environmentalist grounds until they concede to enact a project labor agreement, than drop the lawsuit.

Is this the best they can do?

California’s private sector labor movement should consider how environmentalism, married with the special interests of monopolistic corporations, allied with government labor whose agenda is utterly different than their own, have destroyed literally millions of good jobs in this state. They should consider how close California is to becoming an authoritarian wasteland, where land, water, energy, housing and transportation are cynically rationed by this alliance of oligarchs and elitists. They need to wake up and fight for their core principles – the welfare of workers and their families.

An essential point that union leaders and their members ought to understand is the cost of building infrastructure in California is prohibitive for reasons that go far beyond paying a prevailing wage, or even the cost of hiring a few extra employees on a project to comply with union work rules. The costs are prohibitive because oligarchs and elitists have colluded to make every element of a project more expensive – the land, power, materials, transportation, staging, permits, and time-delays. The compounding effect of these pernicious barriers have enriched oligarchs, government workers, and the trial lawyers representing the environmentalists. They’ve made the rest of us poorer, and they’re the real reason we don’t have more good jobs.

To take one dramatic example, consider the Carlsbad desalination plant, which – not even including distribution pipes to move the water into the municipal supply – was built at at a capital cost of $12,733 per acre foot of annual capacity. Compare that to the Sorek desalination plant, completed in Israel in 2013 at a capital cost of $4,111 per acre foot of annual capacity, less than one-third as much! This was accomplished in a nation where labor is not cheap, nor is the government a paragon of free market deregulation. This is not an isolated case.

It is a crime against all Californians that other developed nations can build infrastructure for less than one-third what it costs here, and that other states in the U.S. can build infrastructure for less than half what it costs in California. Labor costs occupy a dwindling percentage of what infrastructure projects cost, which means that unions should start lobbying aggressively for infrastructure investment, instead of playing petty greenmail games. They may not win every project labor agreement battle. But they will win the war to create millions of good new jobs, and change California from a land of authoritarian scarcity back into a land of opportunity and abundance.

Ed Ring is the president of the California Policy Center.

Conventional Fuels Still of Vital Importance to California

Gas-Pump-blue-generic+flippedThe American Society of Civil Engineers recognized oil as an element of “infrastructure” in California in its 2016 Infrastructure Report Card. That report card clearly documents the fact that there are no easy answers to our complex energy and transportation challenges for the future.

Fossil fuel permeates every aspect of our daily lives. It has driven an exponential increase in human numbers and civilizations from the horse-and-buggy days. It enables us to easily get to work, school and medical facilities as well as the freedom to travel for family and recreational purposes. It supports the quality of life Californians take for granted. We need more – not less – fossil fuels to develop economies and basic infrastructures for the people of developing and third world countries.

This has been lost on the part of many lawmakers and regulators who have come under intense pressure from the powerful anti-oil lobby to eliminate fossil fuel production and use at the local and state level in California, primarily to reduce greenhouse gas emissions associated with climate change. Wind and solar are only able to provide intermittent electricity to the grid, but cannot provide the oil or the oil by-products that are the basis of every component of modern civilizations’ industries and infrastructures. This is an overly simplistic approach to addressing the complex international challenge of forestalling global warming.

The fact is, oil is the only energy source that is technically able to power about 95 percent of our state’s 32 million vehicles with transportation fuel demands of 40 million gallons per day. It’s just common sense to produce as much of that crude oil and manufacture the transportation fuels as much as possible in California for its 38 million citizens who live on an “energy island” for several reasons: First, our state has the nation’s strictest environmental laws, generating far lower greenhouse gas emissions than those associated with producing and transporting oil from countries with weaker rules. Second, it would provide California consumers with the energy security necessary to protect us from disruptive and costly supply interruptions. Third, it would be good for our economy, providing jobs and revenues right here in California instead of in other states and countries.

Despite this reality, regulators continue to recklessly forge ahead with schemes to force an immediate move away from reliable fossil fuels in favor of alternatives and renewables. With both in-state crude oil production and shipments from Alaska on the decline, shipments from foreign countries, already at 52 percent of California’s needs, will be increasing. An alternative to reduce dependency on foreign crude is approval of crude transport by rail from the Midwest or Canada to meet the demands on the California energy island.

One scenario under consideration by the Air Resources Board would mandate that the number of electric, plug-in hybrid and fuel-cell vehicles increase from the current 300,000 to 5 million and 40 percent of new car sales by 2030, regardless of cost or feasibility.

There are local efforts underway as well. For example, here in the Valley area, two of three planned phases to expand access to the San Fernando Road bike path have been completed, and the third is underway. But is it intellectually honest to think that Valley commuters will be able to use a roughly three-mile bike path to get to jobs throughout the more than 4,000 square miles of Los Angeles County alone?

A recent traffic study concluded that six of the most congested stretches of highway in the United States are in the Los Angeles area. The101 Freeway in the Valley earned the dubious distinction as the worst highway in the country, where during rush hour it can take 91 minutes to travel 26 miles at an average speed of 17 miles an hour.

So how do we reconcile the desire to fight global warming with the real-life transportation needs of Valley motorists and our counterparts throughout the state? First, some perspective may be helpful: according to the California Energy Commission, our state contributes a miniscule 1 percent of total worldwide greenhouse gas emissions. It’s been a decade since the passage of the flagship climate change policy AB 32, yet, the state has not been transparent with the results of its emission crusade, and remains on a go-it-alone path to micromanage the California emissions that generates billions of dollars for the government at the expense of businesses and the financially challenged. So no matter how much inconvenience and cost we impose on drivers, we are likely to see a return that is purely symbolic, not substantive.

And no matter how many electric cars we put on the road, they will still be stuck in the same maddening traffic jams that increasingly enrage users of more conventional vehicles.

Let’s hope that future generations will be up to the challenge facing humanity to mitigate climate change responsibly and cost-effectively. Meanwhile, as the society of civil engineers report card suggests, California might do well to focus more attention and resources on improving transportation infrastructure to make commuting easier and cleaner for the folks in the Valley and elsewhere.

ounder of PTS Staffing Solutions, a technical staffing agency headquartered in Irvine

Brown and Legislature Hit Infrastructure Funding Gridlock

Infrastructure constructionWith big infrastructure questions still unanswered, Gov. Jerry Brown has found himself at loggerheads with lawmakers in Sacramento.

From water storage to road repair and beyond, legislators have not met Brown eye to eye, raising the prospect of a protracted conflict that continues well into next year, with elections looming next November.

Diminishing returns

Brown had prided himself on a relatively hands-off approach to Sacramento’s fractured political configuration, which has seen moderate Democrats sink strict environmental regulations and Republicans adopt an on-again, off-again approach to negotiations with the governor’s office. “This particular approach of mine has worked in the past,” Brown said, according to the Los Angeles Times. But between California’s drought and its challenges in shifting away from the gas tax to maintain public roads, that comfortable attitude has begun to show diminishing returns.

“Administration officials estimate that $59 billion is needed for state roads, and local officials say an additional $78 billion is required for cities and counties. The longer it takes to reach a deal, the bigger the price tag will be,” the Times reported.

Analysts and opinion writers, long frustrated with the low quality of California’s roads, have homed in on the latest round of infrastructure troubles. “Traffic accidents in California increased by 13 percent over a three-year period — the result of terrible roads and worse drivers,” as Victor Davis Hanson wrote in the San Jose Mercury News. Hanson and others have held up roads as a barometer of the state’s broader political and economic health. “Why is California choosing the path of Detroit,” he asked, “growing government that it cannot pay for, shorting the middle classes, hiking taxes but providing shoddy services and infrastructure in return, and obsessing over minor bumper-sticker issues while ignoring existential crises?”

Looking for leadership

Brown has even taken some implicit heat on infrastructure from within his own administration. The state’s treasury secretary John Chiang recently revealed his belief that the governor needs to launch a new, transparent and top-to-bottom review of California’s infrastructure needs.

“Chiang wants to use the treasurer’s office to foster long-term thinking that California is sorely lacking and arguably has lacked since Pat Brown was governor in the 1960s, Chiang said at his keynote address to the California Debt and Investment Advisory Commission’s event before the Bond Buyer’s California Public Finance Conference,” according to Bond Buyer.

“One of the challenges the state faces is to persuade people of the importance of long-term investment in an environment where many of them distrust the financial markets, Chiang said. That’s where transparency comes in. The state has made progress in governance and management evidenced by its boosted bond ratings, but people still ask what the long-range plan is, Chiang said. […] Such a study would need to come from the governor and the state Legislature, however, not the treasurer’s office, Chiang said. His office’s role would be to provide education.”

Winter worries

Clouding the picture further, Congressional Republicans in Washington have taken Brown to task on plans for shoring up the state’s water infrastructure. “The Republican members of California’s delegation are demanding a government plan to store the deluge of water that could come with El Nino this winter,” the Sacramento Bee reported. “Fourteen GOP lawmakers will send a letter to President Barack Obama and Gov. Jerry Brown on Thursday asking for specifics about how federal and state agencies expect to capture, save and transport water. […] Rep. Devin Nunes, R-Calif., said the governor has opposed a plan approved by the House, and the Senate hasn’t proposed one of its own.”

Meanwhile, the public utilities have joined in the chorus. In an op-ed at the Los Angeles Daily News, California Water Association executive director Jack Hawks warned that “we cannot build a reliable water supply on conservation alone. Customers have been doing an outstanding job during the current drought emergency, but this level of conservation is not sustainable over the long term.”

Originally published by CalWatchdog.com

CA Legislature Debates How to Fund Road Repair

LA-Freeway-Xchange-110-105There is consensus that California’s road and highways must be fixed. There is no consensus how the fix should be paid for. The Special Session legislative meeting Friday was called a first step in finding agreement to the funding problem. The Democrats see tax increases as part of the mix; Republicans want to prioritize the use of existing dollars for the roads. The tricky part of compromise is the push for any taxes in the context of so many other tax increases that could be presented to voters.

Governor Jerry Brown has proposed a yearly funding package for the roads of $3.6 billion. The package includes a 6-cent gasoline tax increase, an 11-cent diesel tax increase, both tied to inflation, a $65 car fee and cap-and-trade funds. His proposal is little more than half what legislative Democrats and a coalition of business, labor and construction groups have called for.

Republican proposals also include cap-and-trade money. In this case, the money would be used directly for the roads. The governor’s plan would funnel cap-and-trade dollars to bus lanes and rail. The Republicans also would trim CalTrans staff, direct weight fees and other transportation monies exclusively for the roads and employee other methods without raising taxes.

Not only have the Republicans expressed opposition to tax increases but there is no certainty that all Democratic legislators would support a tax increase.

The informal group of Moderate Democrats who banned together to stop the provision in climate change bill SB 350 to cut petroleum use in half over 15 years objected that their constituents would pay a higher cost for commuting. Cap-and-trade that now covers gasoline refining and has raised the cost of gasoline about 10-cents a gallon. Additional taxes on gasoline would adversely affect many of their constituents, the moderate Democrats believe.

The governor wants the funding package to move through the legislature quickly for strategic reasons.

For one thing, the plunging cost of gasoline may undermine the argument that the gas tax increase will hurt low-income drivers. Even a tax increase on gas would leave the cost of a gallon of gasoline well below recent price levels.

If debate lingers until next year, it becomes an issue for candidates running for office in an election year. Remember, a car fee increase was a major reason for a governor’s recall just a decade ago.

If a package of gasoline taxes and car fees should end up on the ballot it would probably get a cold stare from the voters. Likely there will be a number of tax increases on the November ballot. An extension of Proposition 30, a cigarette tax, perhaps a property tax, maybe others could be on that ballot. A roads funding package will not look so good in the context of all these tax increase proposals.

The roads and highways are the veins and arteries that pump life into our economic system. They must be cared for to prevent the economic system from getting a form of man-made sclerosis. The governor and legislators during the Special Session are walking a tightrope to balance the need to improve the roads and highways with voters being turned-off by a slew of tax proposals.

Originally published by Fox and Hounds Daily

On Bullet Train, Voters Finally May Get to Apply the Brakes

high speed rail trainPencils have erasers. Computers have the undo command and the escape key.

If you had it to do over again, would you vote for the bullet train?

It was called the “Safe, Reliable High-Speed Passenger Train Bond Act” on the 2008 ballot, and it authorized $9 billion in bonds — borrowed money — to “partially fund” a high-speed train system in California.

The ballot measure required that there would be “private and public matching funds,” “accountability and oversight” and a focus on completing “Phase I” from Los Angeles to San Francisco to Anaheim. Bond funds could not be spent on the other corridors, like Fresno to Bakersfield, unless there was “no negative impact on the construction of Phase I.”

Today the estimated cost is over $68 billion, private and federal funds are not in sight, and accountability has been cut back — instead of two spending reports to the Legislature every year, only one report every two years will be required. And “Phase I” broke ground in Fresno.

Place your finger on the escape key and stand by. State Sen. Andy Vidak, R-Fresno, has introduced a bill, co-authored by Assemblyman Rudy Salas, D-Bakersfield, to put the bullet train before the voters again. If Senate Bill 3 (SBX1-3) can muster a two-thirds vote in the state Senate and Assembly, it will be on the June 2016 ballot.

The measure would freeze spending on the bullet train and direct unspent funds to the Department of Transportation to be used for roads, which would come in handy because California needs $59 billion just to maintain the freeways for the next 10 years. Gov. Jerry Brown has called a special session of the Legislature to look for revenue to fill the state’s transportation budget pothole after signing a “balanced” budget that left that item out.

The non-partisan Legislative Analyst’s Office offered some suggestions that illustrate the difference between what tax increases can raise and what the bullet train costs.

• Raising the tax on a gallon of gasoline brings in $150 million per 1 cent increase.

• Raising the tax on a gallon of diesel fuel collects $30 million per 1 cent increase.

• Raising the vehicle registration fee nets $33 million per $1 increase.

• Doubling the vehicle weight fees raises about $1 billion.

• Raising the vehicle license fee hauls in roughly $3 billion per 1 percent increase.

There are other options. The LAO says lawmakers could prioritize the budget to use money from the general fund to maintain and construct roads. Billions in cap-and-trade revenue, collected from fees now levied on gasoline and diesel fuel, could be used for highway projects that reduce traffic and improve mileage.

Additionally, $900 million that was loaned from state transportation accounts to the general fund could be repaid and used for roads. “Efficiency and effectiveness” could be improved by prioritizing cost-effective maintenance projects, increasing accountability and oversight, and examining Caltrans’ “capital outlay support” program to see if it is “operating efficiently.” Hint, hint.

The scrimping, saving and tax hikes needed to maintain the freeways can’t begin to address all the other transportation infrastructure needs, and we still have to pay for the rising costs of Medi-Cal, unfunded pensions and health benefits for state employees, and desperately needed water projects.

In 2008, the ballot argument for the bullet train promised high-speed rail “without raising taxes,” but it’s a shell game if tax revenue is spent on the train while taxes are raised for the roads.

Sen. Vidak’s bipartisan bill ought to have the support of every lawmaker. Voters deserve a chance to undo the bullet train and escape from this mess.

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Reach the author at Susan@SusanShelley.com or follow Susan on Twitter: @Susan_Shelley.

​Why Higher Taxes for Potholes is a Bad Idea

road_blockTo paraphrase Ronald Reagan, here we go again. Once more, taxpayers are being told by our political elites that, if we want good roads, we have to have higher taxes.

Just a few weeks ago, this column exposed the politicians’ plan to hike gas taxes along with vehicle license fees and registration. This plan, by San Jose lawmaker Jim Beall, would slam taxpayers in three ways. First, it would raise at least $3 billion annually by increasing the gas tax by another 10 cents a gallon. Second, it would hike the vehicle license fee, which is based on value, by more than 50 percent over 5 years. Third, it would increase the cost to register a vehicle by over 80 percent.

The latest scheme is Assembly Constitutional Amendment 4 which would weaken Proposition 13 by eliminating the two-thirds vote for local transportation sales taxes. ACA 4 is a bad idea. California already has the highest state sales tax in the nation. Not only that, but sales taxes are highly regressive, hitting the poor and working middle class the hardest.

It is true that California ranks very low nationally in the condition of its roads and highways. But, in addition to an already high sales tax we also have the highest income tax rate in America and the 4th highest gas tax. (And, by the way, that gas tax doesn’t even include the cost of California’s one of a kind “cap and trade” regulations which substantially increases the cost of every gallon of fuel pumped in California).

The truth is that the sad condition of our highways has nothing to do with the lack of tax dollars and has everything to do with poor management and bad choices in deciding where our transportation dollars are spent. Our taxes are far more likely to be paying for projects we don’t even need — like High Speed Rail — or a bloated Caltrans budget than they are for fixing roads.

There’s another compelling reason why, should it ever make it to the ballot, ACA 4 deserves to be resoundingly defeated.  At least 20 counties in California, including all the large ones, have already passed higher sales taxes with the two-thirds supermajority vote mandated by Prop 13. Billions of dollars have been raised by these so-called “Self-Help Counties” all for transportation purposes. In going to the voters, local officials have to make sure that they propose projects that are truly needed. Lowering the vote threshold will only incentivize waste and the funding of pet projects, not the high priority needs of California motorists.

We believe very strongly that taxpayers shouldn’t have to pay the price for bad decisions made by politicians and bureaucrats. Until our elected leaders direct the vast amount of money already available for highway improvements to those needed projects, we certainly shouldn’t consider even higher taxes and weakening Prop. 13. That’s why HJTA will oppose ACA 4 and we urge all California taxpayers to do the same.

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.

Originally published by the HJTA.org

CA Politicians Reach Into Transportation Funds, Ignore Crumbling Infrastructure

california roads infrastructureNow there is no question that road and bridge maintenance is lagging in the Golden State. Most counties have an average pavement rating of “at risk” or “poor” according to a finding by the California Transportation Commission. In addition to the safety hazards caused by poor road maintenance, there is a direct cost to the average California driver of hundreds of dollars for vehicle maintenance and tire wear.

Before assuming that that the Sacramento politicians are justified in seeking to dig deeper into drivers’ wallets, it is important to point out that billions in transportation tax dollars have been spent on other programs. State government has been diverting a billion dollars a year in annual truck weight fees to pay debt service on general obligation bonds and another $100 million annually in gas tax revenues to the general fund.

Now, in theory, all transportation tax revenues are to go for transportation purposes. Voters have passed several propositions they were assured would guarantee this result.

However, Sacramento has used slight-of-hand to divert these revenues. For example, after voters approved $20 billion in transportation bonds in 2006, bonds that were to be repaid from the general fund, officials later decided to use transportation tax revenue for bond repayment, freeing up general fund revenue for other purposes.

Some will argue that it is appropriate that transportation taxes repay transportation bonds, but voters were lead to believe the money would come from the general fund. When the state passes school bonds, they are repaid from the general fund.  When water bonds are passed, they too are repaid by the general fund. There is no reason transportation bonds should be different. By using transportation tax revenue to pay off bonds, there is not enough money left to maintain the improvements the bonds pay for.

Senate Republican Leader Bob Huff has a better idea that will slap the hands of those who have been reaching into the transportation tax cookie jar and diverting funds from road and bridge maintenance. Huff’s legislation, Senate Constitutional Amendment 7, would close the loopholes and stop this theft of transportation dollars. SCA 7 is the only plan in the Legislature that would provide funds to improve state roads and highways without raising taxes.

However don’t look for quick or easy passage of SCA 7. Its flaw? It does not require a tax increase and for the majority party in Sacramento, which is obsessed with extracting more money from taxpayers, this flaw is likely to be fatal.

It is hard to blame California drivers if they feel a like a lot like the late comedian Rodney Dangerfield who would complain, “I don’t get no respect.”

Jon Coupal is president of the Howard Jarvis Taxpayers Association. Originally posted on HJTA.

Libertarians, Government Unions and Infrastructure Development

 

“Alright, but apart from the sanitation, the medicine, education, wine, public order, irrigation, roads, the fresh water system and public health, what have the Romans ever done for us?”
–  John Cleese, Monty Python’s Life of Brian, 1979

Infrastructure constructionAny discussion of California’s neglected infrastructure has to recognize the three factors most responsible: Libertarians, environmentalists and government unions. Picking libertarians as the first example is not by accident, because libertarians are perhaps the most unwitting participants in the squelching of public infrastructure investment. By resisting government involvement in any massive public works project, libertarians provide cover to public sector unions who know that public works funding competes for tax revenues with their own pay and benefits.

When it comes to squelching public infrastructure investment, however, nobody can compete with California’s environmentalist lobby. Their lawsuits have stalled infrastructure development for decades. And the identity of interests between government unions and environmentalists is multi-faceted. The most obvious is that when there is no money for infrastructure there is more money for government worker pay and benefits. And of course, the more environmentalist regulations are passed, the more need to hire more unionized government workers.

Then there are the unintended and largely unnoticed financial consequences of environmentalism abetting the government union agenda. As California’s carbon emission auction collections slowly grow into billions per year, government jobs are redefined to incorporate “climate change mitigation.” Code inspectors and planning department personnel become climate change enforcers ala revised building codes and zoning laws. Bus drivers become mass transit workers mitigating climate change. Firefighters combat lengthier fire seasons, and even police are called into action because hotter weather is correlated to higher crime rates. And as they work to mitigate the impact of climate change, all of them quietly qualify for a share of the carbon emission auction proceeds.

The unintended economic consequences of environmentalism abetting the government union agenda are among the hardest to explain. Of course environmentalism can slow down economic growth. At some reasonable level – which we’re well beyond – that’s even desirable. But the environmentalist squelching of public infrastructure development, along with competitive private sector development of land, energy and water resources, has created artificial scarcity. In turn, this drives up asset values which helps government pension funds two ways (1) directly through appreciation of their invested assets, and (2) indirectly, by creating new real estate collateral for consumer borrowing which stimulates consumer spending which creates corporate profits and stock appreciation. In short, the economic consequences of artificial scarcity are asset bubbles that, for a time, keep unionized government worker pension funds solvent. When you can’t afford to own a modest home, or run an energy intensive business, remember this.

What libertarians and environmentalists both need to understand is that massive public works are one of the prerequisites for broadly distributed prosperity. And the environmentalist bias against massive civil engineering projects is two-faced. For example, managing delta salinity, the flow of the San Joaquin River, and the very existence of one of the largest refuges for waterfowl in the American southwest, the Salton Sea, are all dependent on dams, aqueducts and irrigation. But no more?

If you search for interest groups that favor massive civil engineering projects, you’ll look far and wide and find nothing of significance. Private sector unions ought to be leading the charge, but in recognition of the power of environmentalists and government unions, they settle for politically correct projects of marginal productive value – high speed rail, delta tunnels, and the occasional stadium. The Silicon Valley lobby is even worse – rather than support abundance through innovation, they embrace conservation through surveillance. If Californians recovered an additional 10 million acre feet per year of fresh water through civil engineering projects such as desalination, dam storage, and sewage reuse, there would be no need to embed internet devices into “smart” (and mandatory) side loading washers, low flow toilets, water meters, dish washers, and irrigation systems.

The biggest challenge ideologically however confronts libertarians. Because in the real world, we need to build civil infrastructure within a financial and legal framework that relies to some significant degree on government. If libertarians can reconcile their ideals with the needs of Californians, they might rally private sector union leadership, practical environmentalists, and altruistic members of the public sector. Massive infrastructure development in California on all fronts is long overdue. The revenue producing elements of this infrastructure could be financed through the pension funds – only consuming a fraction of their assets – and give truth to their currently preposterous assertion that they’re helping our economy.

Imagine if California’s government, with help from private and federal sources, was truly committed to creating abundance again through massive civil engineering projects across all areas of critical infrastructure. Can libertarians find a formula that would enable them to urgently support this without violating their core ideals? Can they support development while also being the watchdog against corruption? It could make all the difference in the world.

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Ed Ring is the executive director of the California Policy Center.