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

7 Key Measures of California’s Transportation Challenges

1. CA’s gas taxes are the 4thhighest in the nation.

According to the American Petroleum Institute, California’s 61-cent-per-gallon gas taxes are the 4th highest in the nation, behind only Pennsylvania, New York and Hawaii. This does not include the recent addition of extra cap-and-trade taxes resulting from bringing fossil fuels under California’s AB 32 law.

2. CA’s gas prices are the nation’s highest.

According to AAA, the current national average price for a gallon of ‘regular’ gasoline is $2.63. California’s current average price is $3.69 per gallon (as of 8/5/15).

3. CA’s gas tax & transportation fees yield $10.6 billion annually.

According to the State of California, Department of Transportation, Division of Budgets, 2014/2015 Fiscal Year estimates, the State brings in at least $10.6 billion in taxes and fees “dedicated to transportation purposes.”

4. Caltrans spends just 20% of that revenue on state road repair & new construction.  

Last year, Caltrans spent $1.2 billion in state road maintenance & repair, and $850 million in new construction.  Similar amounts are planned for the 2015/2016 CA State budget.

5. Caltrans wastes half a billion $$ annually on extra staffing.

The Legislative Analyst’s Office (LAO) report on the review of the Caltrans’ Capital Outlay Support Program found that the agency is overstaffed by 3,500 positions at a cost of $500 million per year.

6. CA’s roads rank near the bottom in every category, including:

  • 46th in rural interstate pavement condition
  • 49th in urban interstate pavement condition
  • 46th in urban interstate congestion

7. Poor road conditions cost Californians $17 billion yearly in vehicle repairs.

34% of CA’s major roads are rated to be in “poor” condition. Driving on roads in need of repair costs California motorists $17 billion a year in extra vehicle repairs and operating costs – $702.88 per motorist.

Originally published by Fox and Hounds Daily

John Moorlach is a California State Senate, 37th District

​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

Self-Driving Cars Getting Dinged Up on CA Roads

google carGoogle admitted that its self-driving cars had racked up some dings on California’s streets, prompting a flurry of interest and caution among analysts closely watching the tech giant’s foray onto American roads. Reported NBC News:

“Four of the nearly 50 self-driving cars now rolling around California have gotten into accidents since September, when the state began issuing permits for companies to test them on public roads. Two accidents happened while the cars were in control; in the other two, the person who still must be behind the wheel was driving, a person familiar with the accident reports told The Associated Press.”

Setting standards

The relatively minor news provoked outsized attention, especially in California, because of the way self-driving cars heighten the tension between public issues of safety and transparency. “The fact that neither the companies nor the state have revealed the accidents,” noted the AP, “troubles some who say the public should have information to monitor the rollout of technology that its own developers acknowledge is imperfect.”

On the other hand, the layer of secrecy involved in the incidents came courtesy of California’s own pro-privacy regulations. “In half of the fender benders,” Endgaget reported, “the cars were in control when the accident occurred, and all of them happened at speeds of under 10 MPH.” None resulted in injuries; because of “the state’s privacy laws, the report doesn’t indicate any further details — like if they happened while backing out of a parking space, for example.”

The head of Google’s automated car program, Chris Urmson, emphasized that Google’s cars encountered just 11 accidents over 6 years and nearly 1 million miles on the road. Ironically, he suggested, the real lack of transparency that should concern drivers is the uncertainty surrounding the nature of unreported accidents with little damage and no injuries: “according to National Highway Traffic Safety Administration data, these incidents account for 55 percent of all crashes. It’s hard to know what’s really going on out on the streets unless you’re doing miles and miles of driving every day.”

Self-driving trucks

Meanwhile, across the border in Nevada, Daimler Trucks North America became the first to license a self-driving big rig this week in Nevada, as USA Today reported:

“Four of the experimental Freightliner trucks — Freightliner is a Daimler unit — drove around Nevada for a total of 10,000 miles over six months, says Steve Nadig, the chief engineer on the project.”

Self driving truckIn addition to a test track in Germany, Daimler sent out two trucks on “quiet public roads in Nevada,” according to Wired. “To earn the autonomous vehicle license plate from Nevada, Daimler needed to prove the system could safely cover 10,000 miles on its own.”

In a Las Vegas press conference, Daimler board member Wolfgang Bernhard depicted the trucks as a step ahead of self-driving cars in safety, desirability and economic impact. But Bernhard conceded that the trucks wouldn’t hit commercial viability until “enough U.S. states allow them on their roads to make inter-state commerce viable,” as Reuters summarized his remarks.

Despite the regulatory challenges and red tape involved in licensing self-driving trucks, said Bernhard, California — along with nearby Arizona and auto-centric Michigan — “had shown an interest in self-driving trucks, but more states would need to get on board before the federal government took up the issue.”

Analysts did quickly flag one big economic difference between self-driving cars and trucks: jobs. Whereas switching to automated cars wouldn’t necessary eliminate jobs, automated trucks would eventually render truckers increasingly obsolete. “The trucking industry constantly struggles to find enough drivers, even when unemployment is high,” noted Vox. “And the cost of a machine operating a vehicle will be dramatically cheaper than the cost of a human.”

Originally published on CalWatchdog.com

Overtaxed Californian’s Want More Services But Not More Gas Taxes

A recent statewide poll by The Field Research Corporation found that voters strongly believe that state and local governments in California should be spending more money to improve roadway conditions, but at the same time the same voters are divided on raising new tax dollars to pay for the improvements.

los-angeles-freeway-helicopter-1In fact, a whopping 76 percent of California voters view California’s existing gasoline tax, which is used in part to pay for new roads and maintenance, as too high already, according to the Field poll.

These voters have good reason to share the view that California’s gas taxes (like its’ income and state sales taxes) are already too high. California’s gas tax per gallon is complicated and involves Federal, state sales and excise taxes. According to George Runner, a member of the state’s Board of Equalization, which administers the tax, California consumers already pay 71 cents per gallon every time they fill up their tanks in taxes, while the average paid in other states is 50 cents per gallon, according to Runner.

Motor vehicle fuel taxes will add close to $5 billion in revenue to state coffer’s in 2015, but the amount of revenue is trending down, as cars become more fuel-efficient and use less gas. Yet even with $5 billion in tax revenues just from the gas tax, largely intended for roads, California still suffers from a vast network of pot-holed roadways in need of repair.

In beautiful Sonoma County in California’s bucolic wine country, it is estimated that there are 1,400 miles of roads that will require $1.6 billion to repair, money that the county on its own simply doesn’t have to fix the roads. In San Joaquin County in the state’s Central Valley, estimates are that another $1.25 billion is necessary to fix and maintain 3,288 miles of roads over the next 10 years, and that as a result of shrinking Federal and state dollars for road maintenance, the roads may fall into further disrepair. These needs are not to mention the road networks in need of attention in major population centers like Los Angeles, San Francisco, and San Diego counties.

Part of the reason Sonoma cannot repair its roads is because of the substantial drain that out-of-control public employee union pension liabilities costs the county.

Since 2000, spending on pensions has grown 400 percent. Sonoma is simply strapped for cash and in order to afford its pension payment obligations, it must reduce other pubic spending including fixing roads. Public employee union pension obligations are swamping city-after-city in California with the result being reduction in other public services.

In San Jose, for example, roads are “pocked with potholes” and libraries closed three days a week, because of generous public employee pension obligations that gobble up so much of the city’s annual budget. As a result even some police services have been eliminated, such as in its burglary unit.

A Democratic State Senator is looking at new ways to raise taxes and has proposed legislation to tax all automobiles on actual road use, rather that just gasoline consumed, in an effort to make owners of more fuel efficient vehicles pay higher taxes. But the idea of installing an electronic device in California automobiles that would measure the amount of miles driven so taxes could be levied on a per mile basis instead of at the pump did not prove too popular in the recent Field poll, which found 66 percent opposed to the idea and only 30 percent in favor.

The real answer to funding necessary public services by state and local government and doing things like fixing roads and restoring police services in states like California is to re-establish priorities in favor of taxpayers and not government.

That process will necessarily involve rethinking the poor decisions government managers have made in the past on allowing for too generous public employee pensions, which are draining funds for other necessary services.

When the biggest line item in a government budget becomes pensions as opposed to public services, government is transformed from serving the public to serving itself. In California, people already feel they are overtaxed. Roads will continue to deteriorate, as will the general quality of life, until the state’s politicians understand that government needs to start spending less on itself, reform pensions, and spend better in favor of taxpayers without taxing more.

Originally published by the Blaze

James V. Lacy, a frequent guest on Fox Business News Channel’s “Varney and Company,” is author of “Taxifornia: Liberal’s Laboratory to Bankrupt America.”

Atkins Proposes $1.8 Billion Tax on CA Drivers

For the second time in as many weeks Californians got the news that Sacramento politicians are proposing yet another big tax hike.  The truth is that new taxes would never be required were it not for Sacramento’s mismanagement of existing tax dollars.

Last week, it was the proposal to deal with the very real problem of “revenue volatility” in California’s tax structure with the very unreal “solution” of a $10 billion tax on services.

But the latest proposal comes from new Senate leader Toni Atkins who proposes a brand new tax on drivers to pay for highway and road repairs in California.  This new “fee” would take $1.8 billion dollars out of the pockets of hard working California citizens over the next five years.

Now, most Californians would wholeheartedly agree that our roads are in terrible shape.  Years of neglect have resulted in a highway system that, according to a recent state report, requires a massive infusion of $59 billion.  But taxpayers have a very good question that has yet to be answered:  How is it that California has the highest gas tax in the nation and yet cannot keep its roads in decent condition?

Moreover, although the exact nature of this new “fee” has yet to be determined, Senator Atkins’ comments in proposing the new revenue source can only be described as foolish and insulting. Here is what she said:  “California cannot have a strong middle class or a thriving economy if our roadways are congested and people and goods cannot move efficiently.”

Really?  A left-wing politician now claims that this new tax is needed to protect the middle class?  She is simply blind to the truth that the progressive policies of heavy taxation and over regulation are crushing the middle class in California.  As is so common now in California, statements from politicians such as Atkins reveal a profound disconnect between their pampered lives and the lives of ordinary citizens.

So, instead of slamming Californians with another tax hike, what is a better way to meet the funding needs for our crumbling highway system?  Glad you asked.

First, let’s demand that gas tax revenues pay for roads, not bike lanes, environmental mitigation programs and mass transit.  The latter programs are all well and good, but gas taxes should go for roads.  (For purposes of full disclosure, as a cyclist I support bike lanes.  But I don’t want my gas taxes paying for them).

Second, how much of our transportation dollars are wasted on burdensome labor restrictions?  So-called “Project Labor Agreements” add between 25 to 35% to the cost of highway construction. Let’s get rid of PLA’s and, while we’re at it, “prevailing wage” laws which also add to the cost of construction unnecessarily.

Third, let’s direct valuable transportation dollars to those systems that actually work.  This would mean abandoning the doomed-to-fail High Speed Rail Project that is sucking up tax dollars in a way that voters never approved.

Fourth, we can agree that gas tax revenue has fallen a bit short of expectations because cars are now more fuel efficient.  But if that is the case, why does the state still subsidize electric vehicles? Shouldn’t we abandon those subsidies and direct those dollars to filling potholes?

Instead of reflexively demanding higher taxes, our elected officials should do what other states seem to do without controversy – prioritize spending.  Now there’s a novel concept.

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 at HJTA.org

CARTOON: Fix CA Roads?

Roads cartoon

Wolverton, Cagle Cartoons

Jerry Brown Wants Greater Investment in CA Roads

As reported by the Sacramento Bee:

With the bipartisan water bond accord in their rear-view, California Gov. Jerry Brown implored lawmakers Monday to come together and begin the costly task of repairing the state’s crumbling roads.

Brown said following passage of the $7.5 billion water bond that it’s equally important for the state to deal with its long-standing road and highway challenges. California faces $59 billion in deferred road maintenance, and the price tag to meet the state’s long-term transportation needs is significantly higher.

“Each year, we fall further and further behind and we must do something about it,” Brown said during a speech marking …

 

Pension spiking results in crumbling CA roads

From roads to bridges and well beyond, California’s neglected infrastructure won’t receive relief this election cycle.

For years, the state has lavished money on other projects — especially public pensions. Despite a flurry of bad press surrounding the crushing burdens those pensions place on cities and municipalities, the trend is set to continue.

When voters go to the polls next week, they’ll face a dizzying array of proposed tax increases. All told, Californians must contend with 140 different ballot proposals, largely because of pension-imposed budgetary pressure.

Competing priorities

Pensions have climbed steadily upward while infrastructure has crumbled away, according to findings published in the Sacramento Bee. “Six-figure pensions for mid-level public servants have brought the state to the point where one out of every nine state and local tax dollars goes to pay for pensions,” wrote Mark Blucher. In 1994, he noted, the figure reached just one in 16 tax dollars. “Tax increases now do not increase government services, but simply service government pensions.”

The Golden State’s infrastructure needs have become critical. To repair its local roads, California must make up a budgetary shortfall of $1 billion annually — amounting to $78.3 billion in total, according to the new California Statewide Local Streets and Roads Needs Assessment Report.

And although some 40 percent of state bridges need repair, as the American Society of Civil Engineers estimated, about one-fourth of California’s pensions are still unfunded, Blucher observed. To reverse the tide of funds ebbing away from infrastructure, he suggested, cities faced with bankruptcy and debt restructuring would need the authority to renegotiate contracts with public employee unions.

Setbacks in Stockton

The quest for that kind of authority, which reformers have urged for years, has been stopped short in the days before November’s election. Recently, creditors affected by the city of Stockton’s bankruptcy challenged the so-called “California rule” that has long protected public union contracts from renegotiation in times of fiscal trouble.

Franklin Resources refused to take a haircut that yielded pennies on the dollar while Stockton’s public pensions remained completely protected. Initially, the bankruptcy judge hearing the case, Christopher Klein, seemed to side in principle with Franklin. He ruled that the California Public Employees Retirement System was not constitutionally immune from the kind of cuts imposed by cities entering into bankruptcy.

But Klein reserved himself on the right to rule in favor of a deal in which CalPERS was spared anyway. In fact, that is precisely what Klein did in his final holding. Deciding that “workers would be the real victims” if CalPERS were not shielded from liability, yesterday Klein authorized Stockton to simply reduce public workers’ pay, affecting pensions only indirectly.

Although Franklin has vowed to consider its next steps, policymakers have already concluded that the lid has not been blown off of the legal prejudice in favor of public pensions.

No end in sight

With the Stockton case tipping in CalPERS’ direction, pension reform in California has been thrown into doubt.

New reports recently revealed that ever-increasing sums of money have flowed from Sacramento into the fund’s coffers. Last year alone, according to the Los Angeles Times, CalPERS received more than $8 billion in government cash, quadrupling its haul over the course of the past 10 years.

CalPERS, the Times reported, voted in August to adopt 99 new types of pension bonuses.  Meanwhile, its gap between current resources and pension promises has hit an estimated $100 million.

Gov. Jerry Brown, whose administration tried and failed this summer to prevent pension spiking by the fund, has ordered another round of investigations into whether the perks are “legal and appropriate,” according to the Times.

Meanwhile, as anyone who recently has driven on California’s once world-class roads has found out, the asphalt keeps crumbling.

This article was originally published at CalWatchdog.com