California’s Transportation Future – The Common Road

LA-Freeway-Xchange-110-105With light rail, high speed rail, and possibly passenger drones and hyperloop pods just around the corner, it’s easy to forget that the most versatile mode of transportation remains the common road. Able to accommodate anything with wheels, from bicycles and wheelchairs to articulated buses and 80 ton trucks, and ranging from dirt tracks to super highways, roads still deliver the vast majority of passenger miles.

As vehicles continue to evolve, roads will need to evolve apace. Roads of the future will need to be able to accommodate high speed autonomous vehicles. They will also need to be smart, interacting with individual vehicles to safely enable higher traffic densities at higher speeds. But can California build roads competitively? How expensive are road construction and maintenance costs in California compared with other states in the U.S.? How can California make the most efficient use of its public transportation funds?

PHYSICAL VARIABLES AFFECTING CONSTRUCTION COSTS

The Federal Highway Administration maintains a cost/benefit model called “HERS” (Highway Economic Requirements System) which they use to evaluate highway construction and highway improvement projects. One of the products of HERS is the FHWA’s most recent summary of road construction costs, updated in 2015. Its findings reveal both the complexity facing any cost analysis as well as the wide range of results for similar projects.

For example, on the FHWA website’s HERS summary page, Exhibit A-1 “Typical Costs per Lane Mile Assumed in HERS by Type of Improvement” data is presented in nine columns, each representing a typical project category for which the FHWA analyzes costs. They are: “Reconstruct and Widen Lane,” “Reconstruct Existing Lane,” “Resurface and Widen Lane,” “Resurface Existing Lane,” “Improve Shoulder,” “Add Lane, Normal Cost,” “Add Lane, Equivalent High Cost,” New Alignment, Normal,” “New Alignment, High.”

The FHWA then break their results in each of the nine project categories into two broad groups; rural and urban. Within each of those two groups, they offer the subgroups; “Interstate,” “Other Principal Arterial” (these two are combined in the “Rural” group), “Minor Arterial,” and “Major Collector.” This creates seven cost groups, each of which are then further split. For “Rural” categories, they split into “Flat,” “Rolling,” and “Mountainous.” For “Urban” categories, they split into “Small Urban,” “Small Urbanized,” “Large Urbanized,” and “Major Urbanized.”

To make a long story short, and to state the obvious, “cost per lane mile” is never one number. The FHWA’s HERS table, which itself is a reductive, arguably arbitrary summary, there are 252 distinct cost per lane mile estimates, 24 per project category. And within these nine categories, the range of costs is dramatic.

According to the HERS analysis, adding a new lane to an interstate on flat terrain in a rural area costs $2.7 million per lane mile. To do the same thing in a major urbanized area costs $62.4 million per lane mile, more than twenty times as much. Even minor projects display wide ranges in cost. Resurfacing an existing lane of a principal arterial in a flat, rural area costs $279,000 per lane mile. To do the same in a major urbanized area costs $825,000 per lane mile, three times as much.

The fact that topography, existing usage and population density affect road construction costs isn’t news. But the wide variation in costs that result from these physical variables compounds the other major factor affecting road construction costs, which is the political and economic environment of the states where projects occur. As will be seen, the FHWA compiles state by state data on road construction. This data, however, is apparently not sufficient to allow the FHWA to produce a HERS summary showing costs per lane mile by state.

EXAMINING FEDERAL DATA ON ROAD EXPENDITURES BY STATE

The FHWA Office of Highway Policy Administration does issue a highway statistics report, updated annually, that provides valuable per state data on highway mileage and transportation budgets. Their 2016 report is available but incomplete (still missing key tables such as “Disbursements by States for Highways”) so the 2015 report is still the most current. These tables are uniformly formatted and downloadable.

California’s Spending per Mile vs. Condition of Roads

An excellent analysis of FHWA data is produced every year by the Reason Foundation. Earlier this year they released “23rd Annual Highway Report,”ranking each state’s highway system in 11 categories, including highway spending, pavement and bridge conditions, traffic congestion, and fatality rates.” Highlights from this study can offer insights into how efficiently California is spending its highway dollars compared to other states through using the following logic: How does California rank in terms of how much it spends per mile, compared to how California ranks in terms of the condition of its roads.

Overall California is ranked 43 among the 50 states “Total Disbursements per mile.” California is ranked 41 in “Capital & Bridge Disbursements per mile,” 47 in “Maintenance Disbursements per mile, and 46 in “Administrative Disbursements per mile.” In terms of road condition, California is ranked 33 in “Rural Interstate Pavement Condition,” 45 in “Urban Interstate Pavement Condition,” and 46 in “Rural Arterial Pavement Condition.”

There’s not too much you can conclude from that in terms of efficient use of funds. Among the 50 states, California appears to be at or near the bottom 10% in spending per mile of road, and also in pavement condition.

In terms of cost-efficiency, among all states, this data suggests California is in the middle of the pack.

How Centralized Are California’s Road and Highway Agencies?

Within the FHWA data an interesting finding is the great variation between states in road mileage under state administration vs. road mileage under other administration – mostly cities and counties, but also federal. Only a few states, mostly the larger western states, have any significant mileage administered directly by the federal government – Alaska 14%, Arizona 22%, Idaho 16%, Montana 16%, New Mexico 16%, Oregon 28% and Washington 11%, and Wyoming 13%. Most all other states have low single digit percentages of roads administered by the federal government. The national average is 3%. California, only 6%.

State administration of road construction is higher, but still relatively low. The national average is 19% of road mileage administered by state agencies. California’s is significantly lower than average, at only 8%. Altogether, nationally, 78% of road mileage is administered by local agencies, mostly cities and counties. In California, 87% of road mileage is administered locally.

Before inferring too much from this fact, that road construction and administration is overwhelmingly ran by local agencies, FHWA funding data is useful. The data shows that total funding for roads in California in 2015 was $19.0 billion. Of that, 44% ($8.3 billion) was for “Capital Outlay,” which refers to new roads, new lanes on existing roads, new bridges, and bridge upgrades. The national average is 47% of all road spending on capital.

More to the point, the CalTrans budget in 2015 was $10.5 billion. According to the California Office of Legislative Analyst, that “includes $3.9 billion for capital outlay, $2 billion for local assistance, 1.8 billion for highway maintenance and operations, and $1.7 billion to provide the support necessary to deliver capital highway projects. How much of that was reported to the FHWA as part of the total $8.3 billion spent on capital? Certainly the $3.9 billion “for capital outlay.” Probably the “$1.7 billion to provide the support necessary to deliver capital highway projects”? What about the $2.0 billion of local assistance? For capital projects, it appears that between $5.6 billion and $7.6 billion of the total spending of $8.3 billion came from CalTrans.

The State of California’s role in total spending on road transportation is also reflected in the budget allocations in that year for the California Highway Patrol, $2.4 billion, which is included in the FHWA’s total for California, under “Law Enforcement” ($3.4 billion). It is possible, if not likely, that the state’s $1.1 billion for the Dept. of Motor Vehicles is included either in the Law Enforcement or Administration categories in the FHWA data, or allocated between them. Finally, the finance charges – interest payments and debt retirement totaling $1.5 billion – are not coming out of the budgets for the state’s transportation agencies, but some percentage of that total is paid by the state. Altogether it is likely that the State of California directly funded about $12 billion, roughly 63% of the $19 billion spent on road construction and administration in 2015.

Based on funding data, state agencies clearly play a central role in constructing and maintaining California’s roads.

California’s Spending per Lane Mile vs. Percentage of Lane Miles in Urban Areas

An interesting alternative way to get at how efficiently California uses its public transportation funds is to evaluate based on the expanded variables of total lane-miles instead of state administered road mileage, and total spending on roads by all public transportation agencies instead of just Caltrans. The rationale for using lane-miles relies on the assumption that it is more costly to build a mile of six lane highway (three lanes in each direction) than a mile of two lane road, meaning that lane miles provides a more meaningful denominator, if the numerator is total public spending on roads. The rationale for examining spending by all public transportation agencies relies on the assumption that many, if not most of the political and economic factors that govern road construction costs in California are common throughout the state, having the same effect on construction costs regardless of the funding source.

Using FHWA data on lane miles and total spending by state to calculate spending per lane-mile, California was found to average $43,999 in total spending per lane-mile. This ranks California 42 among all states. The national average is $25,474 in transportation spending per lane-mile. Put another way, for every dollar that, on average, is spent to build and maintain a lane-mile in the nation as a whole, California spends $1.73. This suggests that California is not spending its transportation funds nearly as efficiently as the most other states, but without considering other variables this is a misleading statistic.

One of the largest factors determining cost per lane-mile is urbanization. This is clearly evident in the previously mentioned FHWA website’s HERS summary page, Exhibit A-1 “Typical Costs per Lane Mile Assumed in HERS by Type of Improvement,” where costs per lane-mile are uniformly higher in urban areas, and in some cases far higher. As noted earlier, “According to the HERS analysis, adding a new lane to an interstate on flat terrain in a rural area costs $2.7 million per lane mile. To do the same thing in a major urbanized area costs $62.4 million per lane mile, more than twenty times as much.”

The idea that road construction costs more in urban areas can be attributed to several interrelated factors: Land values are typically greater in densely populated areas. Construction challenges are greater in urban areas where it is more likely that existing structures may have to be acquired and demolished to permit road construction or widening. Labor costs are typically higher in urban areas. Urbanized regions also are likely to have more local restrictions on development, leading to more costly permitting processes and higher fees. There are other key factors influencing road construction costs – for example, climate and topography – but urbanization is easily quantifiable and likely the most significant of them.

For this reason, the following chart includes not only spending per lane-mile by state, but also includes the percentage of lane-miles, by state, that are in urban areas. Here, California distinguishes itself as one of the most urbanized states, having 59% of its lane-miles within urban areas. The national average, by contrast, is almost half that; only 31% of the nation’s lane miles are located in urban areas. Tracking these two rankings, spending per lane-mile and percentage of urban lane miles, permits an illuminating comparison. If one assumes there is a correlation between cost per lane mile and percentage of lane miles in urban areas, then how a state ranks in one should be similar to the how it ranks in the other.

Six states conform exactly to this assumption. Utah, for example, is the 24th most expensive state to construct roads per lane-mile, and it has the 24th most rural percentage of roads. Similarly, Illinois has a $/mile rank of 34, and it has a rural road % rank of 34. Texas, Pennsylvania, New Jersey, and the District of Colombia all have $/mile rankings exactly equal to their rural road % ranking. Five more states have a deviation between their $/mile rank and their rural road % rank of only one. California’s is only two – it is ranked 42 in its cost per lane mile, making it quite expensive relative to most states, but it is ranked 44th in its percentage of lane-miles in rural areas, meaning it is one of the most urbanized states.

The final set of columns on the chart, on the right, show a score for each state based on the rural road percent ranking less the $/mile ranking. If the score is negative, that means the state spending on lane miles ranks better (less per mile) than its rank based on its percentage of rural lane-miles. In other words if the score is negative, that means the state is spending less per lane mile than one might expect based on their level of urbanization, and if the score is positive, the state is spending more per lane mile than one might expect based on their level of urbanization.

Once again, California is in the middle of the pack.

Spending per Lane-Mile by State; Percentage of Urban Lane-Miles by State
(Source: Federal Highway Administration, 2015)

If one assigns any credence to these rankings, it presents interesting questions. Why is it that states like Georgia and Tennessee, which are relatively urbanized, are among the top performers in terms of being able to cost-effectively construct and maintain their roads? In the case of Tennessee, it isn’t as if they’ve neglected their roads, they are in the top ten in all three FHWA measurements of pavement condition. Georgia’s scores on pavement condition put them in the middle among states.

In some of the poorly ranked states, topography and climate may be factors. Alaska, the one of the least urbanized states nonetheless is one of the most expensive states to build and maintain roads, which should come as no surprise. Most of the states with low scores have harsh climates.

A final note regarding California – while it shows a high correlation between its cost per lane-mile and its level of urbanization, it does not score well in the three pavement condition indexes; 33 out of 50 for rural interstates, 45 out of 50 for urban interstates, and 46 out of 50 for rural arterial roads.

California can do better.

OBSERVATIONS AND RECOMMENDATIONS

Federal data indicates that while California scores poorly compared to other states in terms of road conditions, California also spends less than other states in terms of expenditures per lane mile. Considered in isolation, those two facts only suggest that California is using its transportation funds no more and no less efficiently than the average state. While federal data also indicates that California, overall, spends nearly twice as much per lane-mile as the national average, California is also more heavily urbanized, and normalizing for that reveals again that California is being roughly as cost effective in its use of transportation dollars as the average state.

When factoring in the condition of California’s roads, however, which are near the bottom in pavement condition indexes, California is not using its transportation dollars as well as it could.

Anecdotally, literally everyone surveyed – and we talked with representatives from dozens of agencies, research firms, and transportation agencies – agreed that per mile road construction costs are higher in California than most other states. But the federal data we had access to does not offer documentary proof of that, and Caltrans, despite numerous attempts, could not produce data on per mile construction costs that could be compared to national averages.

The lack of transparency, the complexity, and the subjective nature of any resulting analysis makes it difficult to assert with any certainty where California falls relative to other states – it is either somewhat below average, or far below average, but making that call requires a level of evidence and clarity that is simply not available. Ultimately it does not matter where California falls in that continuum, because regardless of how efficiently California spends their public transportation funds per lane mile of new or upgraded roads, there are ways to improve. The following recommendations were heard repeatedly, from contractors, trade associations, and researchers familiar with the topic. The first two in particular:

(1) Reform CEQA

CEQA, or the California Environmental Quality Act, is a “statute that requires state and local agencies to identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible.” While the intent behind CEQA is entirely justifiable, in practice it has added time and expense to infrastructure projects in California, often with little if any actual environmental benefit. An excellent summary of how to reform CEQA appeared in the Los Angeles Times in Sept. 2017, written by Byron De Arakal, vice chairman of the Costa Mesa Planning Commission. It mirrors other summaries offered by other informed advocates for reform and can be summarized as follows:

  • End duplicative lawsuits: Put an end to the interminable, costly legal process by disallowing serial, duplicative lawsuits challenging projects that have completed the CEQA process, have been previously litigated and have fulfilled any mitigation orders.
  • Full disclosure of identity of litigants: Require all entities that file CEQA lawsuits to fully disclose their identities and their environmental or, increasingly, non-environmental interest.
  • Outlaw legal delaying tactics: California law already sets goals of wrapping up CEQA lawsuits — including appeals — in nine months, but other court rules still leave room for procedural gamesmanship that push CEQA proceedings past a year and beyond. Without harming the ability of all sides to prepare their cases, those delaying tactics could be outlawed.
  • Prohibit rulings that stop entire project on single issue: Judges can currently toss out an entire project based on a few deficiencies in environmental impact report. Restraints can be added to the law to make “fix-it ticket” remedies the norm, not the exception.
  • Loser pays legal fees: Currently, the losing party in most California civil actions pays the tab for court costs and attorney’s fees, but that’s not always the case with CEQA lawsuits. Those who bring CEQA actions shouldn’t be allowed to skip out of court if they lose without having to pick up the tab of the prevailing party.

(2) Restructure Caltrans

Caltrans currently outsources only about 10% of its work. Despite repeated attempts to legislate changes that would require Caltrans to use contractors to lower costs, no action has been taken. In a report prepared in 2015 by state senator Moorlach, the failure of California’s legislature to implement reforms is described: “In previous administrations, Governor Schwarzenegger pushed for an 89/11 ratio and could not achieve it. Even Governor Brown proposed a reduced ratio that was rejected by the Legislature.”

By maintaining permanent engineering staff instead of contracting, whenever projects are concluded these engineers are often idle until another project comes along. The Legislative Analyst’s Office in 2015 reported that there were 3,500 of these positions created for programs that have expired, requiring an extra $500 million each year.

The advantage of contracting out engineering work isn’t merely based on more efficiently allocating personnel to projects to avoid down time. When Caltrans does the designing, then puts the project out for bids, the contracting companies have to conduct redundant design analysis in order to prepare their bids. This also contributes to increased costs which are passed on to the taxpayer as well as extra time. In moving to a system where Caltrans just specifies the project goals and lets the contractors prepare competitive bids based on in-house designs, the taxpayer saves time and money. Ways to restructure Caltrans might include:

  • Immediately increase the ratio of contracted work from 10% to 20%.
  • Permit the headcount of in-house engineers at Caltrans to reduce through retirements and voluntary departures, systematically increasing the ratio of contracted work as the number of Caltrans in-house engineers decreases. Set a goal of at least 50% contracted work within five years.
  • Abolish the current requirement that the state legislature has to approve any projects that are contracted by Caltrans instead of designed in-house.

(3) Decentralize and Innovate

On the FAQ page for Elon Musk’s Boring Company, the following innovations are proposed to lower the cost of tunneling by a factor of between 4 and 10: (1) Triple the power output of the tunnel boring machine’s cutting unit, (2) Continuously tunnel instead of alternating between boring and installing supporting walls, (3) Automate the tunnel boring machine, eliminating most human operators, (4) Go electric, and (5) Engage in tunneling R&D. More generally, on that FAQ page the following provocative assertion is made: “the construction industry is one of the only sectors in our economy that has not improved its productivity in the last 50 years.”

How can California use public transportation dollars to nurture innovation that will deliver more people to more places, faster, safely, for less money? One way would be to nurture competition by nearly eliminating Caltrans. Why should one state agency control nearly two-thirds of the funds for road construction and maintenance in California? Why not reduce Caltrans to a couple dozen administrators to handle federal regulations and direct federal funds and move all road work, expansion and maintenance to the counties? The counties can conform to a general state plan, but there’s no reason to have a state bureaucracy any more when the counties can be challenged to be more efficient, effective and non-duplicative in their work.

Imagine the innovation that might come out of Santa Clara County, where stretches of roadway could be immediately prioritized to add smart lanes where autonomous cars – including mini-buses and share cars – can operate safely at much higher densities and speeds. Imagine the innovation that might come out of Los Angeles County, where entire transit corridors could have congestion greatly relieved because thousands of cars are being swiftly and safely transported from point to point in underground tunnels. Imagine the innovation that might come out of San Francisco, where congestion pricing completely eliminates their chronic gridlock, or out of Orange County, where private investors team up with public agencies to use roboticized equipment to perform heavy road construction at a fraction of the cost for conventional processes?

Why not decentralize transportation management in California and turn the counties into laboratories of innovation?

(4) Expand Into the Vastness of California

It is an accident of history that California is so densely urbanized. Most metropolitan regions on the east coast, developed gradually over three centuries or more, have thousands of square miles of spacious suburbs, and tens of thousands of even more spacious expanses of moderately settled lands on the edges of remaining wilderness areas. California, in stark contrast, has nearly 18 million people residing in greater Los Angeles and over 7 million people residing in the greater San Francisco Bay Area. If you add residents of the San Diego region and Sacramento regions, you account for 32 million out of a population of 39 million. And yet all of California’s urban areas, the most densely urbanized in the nation, only constitute five percent of its 163,696 square miles! The math is compelling – you could settle ten million people in four person households on half-acre lots and it would only consume 1,953 miles. Double that for roads, parks, commercial and industrial space, and you are still only talking about urbanizing another 2.4% of California’s land. The idea that we cannot do this is preposterous.

The cost of infrastructure, roads in particular, is much higher in urban areas. So why not expand along the nearly empty Interstate 5 corridor, creating new towns and cities that are spacious and zoned to never become congested? Why not upgrade I-5 to accommodate high speed smart vehicles that provide nearly the speed of high-speed rail, while preserving the point-to-point convenience that only a car can offer? Why not expand along the entire fringe of California’s great Central Valley, where currently thousands of square miles of cattle rangeland are being taken out of production anyway? Why not build more roads on this raw land, bringing down the cost both for roads and the homes that will be built around them?

(5) Change the Conventional Wisdom

California’s policymakers have adhered increasingly to a philosophy of limits. Urban containment. Densification. Less energy use. Less water consumption. Fewer cars and more mass transit. But it isn’t working. It isn’t working because California has the highest cost of living in the nation. Using less energy and water never rewards consumers, because the water and energy never were the primary cost within their utility bills – the cost of the infrastructure and overhead was the primary cost, and those costs only go up with renewables. Cramming home construction into limited areas not only destroys the ambiance of existing neighborhoods, but simply cannot increase the supply of homes enough to lower the cost.

There is a completely different approach that would cost less and improve the quality of life for all Californians. Without abandoning but merely scaling back the ambition of new conservation and efficiency mandates, free up funds to build safe, generation III+ advanced nuclear reactors. At the same time, construct desalination plants on the Southern California coast, enough of them to supply the entire Los Angeles basin with fresh water. Instead of mandating water rationing for households, put the money that would have been necessary to retrofit all those homes into new ways to reuse water and capture storm runoff.

Paying for all of this wouldn’t have to rely exclusively on public funds. Private sector investment could fund most of the energy and water infrastructure. Water supplies could be even more easily balanced by permitting water markets where farmers could sell their water allotments without losing their grandfathered water rights. If the permit process and mandated design requirements were reduced, builders could carpet former cattle ranches with new homes, sold for a profit at affordable prices.

CONCLUSION

This is the final segment of a four part excursion into California’s transportation future. In each section the same themes emerged: It isn’t just what gets built to serve future Californians, it’s how cost effectively the money is spent. Innovation and regulatory reform – CEQA in particular, but also repealing SB 375AB 32, and related anti-growth legislation – together have the potential to lower the cost of infrastructure, transportation in particular, by at least 50%.

California’s current policies have stifled innovation and created artificial scarcity of literally every primary necessity – housing, energy, water and transportation. Each year, to comply with legislative mandates, California’s taxpayers are turning over billions of dollars to attorneys, consultants and bureaucrats, instead of paying engineers and heavy equipment operators to actually build things.

The innovation that persists despite California’s unwelcoming policy environment is inspiring. Right here are the pioneering companies that will deliver flying cars, commercial access to outer space, breakthrough modes of transportation such as hyperloop and urban tunnels. Right here are the companies that will deliver self-driving cars, cars on demand, high-speed smart cars. These things will happen within a time frame that is, by the standards of human history, breathtakingly short. And with the right assortment of pro-growth policies in place, more of them will happen right here.

California’s transportation future cannot be predicted with any certainty. If the past few decades have taught us anything, it is that innovation routinely delivers products and solutions that nobody could have possibly imagined. But it is a reasonably safe bet that the common road is the most useful mode of transportation infrastructure for which public policy can risk public funds. A flat surface where wheeled conveyances of every conceivable design can all travel from point to point, clean, smart, versatile, sustainable, and fast.

Edward Ring co-founded the California Policy Center in 2010 and served as its first president.

California’s Transportation Future, Part One – The Fatally Flawed Centerpiece

California’s Transportation Future, Part Two – The Hyperloop Option

California’s Transportation Future, Part Three – Next Generation Vehicles

REFERENCES

[1] Federal Highway Administration – Highway Economic Requirements System

[2] Office of Highway Policy Information – Highway Statistics 2015

California’s Transportation Future – Next Generation Vehicles

The next generation of vehicles will transform transportation in several fundamental ways. What is coming will be as revolutionary in our time as the transition from horses to horseless carriages was over a century ago. Some increments of this dawning revolution are already here in realized products. Electric drivetrains. Collision avoidance systems. Self-driving cars. Cars on demand. Aerial drones. Nearly all of the enabling technology for this dawning revolution is already here. Artificial intelligence. Visual recognition and sensor systems that use radar, sonar and LIDAR laser scanning. Mapping capabilities. GPS. Data collection. Memory chips. Communications systems. And every one of these technologies, along with investment capital, more than anywhere else, is concentrated in California.

As this revolution unfolds, our conception of what constitutes vehicular transport will change. Many vehicles will be modular and reconfigurable. On the road surface, the wheeled chassis, or “skateboard,” will contain the essentials to power and navigate the vehicle. Depending on the duty cycle, a skateboard chassis may be small, only capable of carrying a two passenger cabin, or small freight payload. Other skateboards will range in size from those capable of carrying a sedan or SUV sized passenger unit, all the way to the largest versions which, with freight or passenger units attached, would weigh up to 80,000 pounds.

Even more variation will be present in the passenger modules. An SUV sized passenger module, for example, might hold 6-8 passengers like a mini-bus. Or it might be a conference room or an office where a group of passengers could conduct work while being transported. Or it might be a sleeper unit, a rolling hotel room, where a lone passenger or a family or work crew would sleep while en-route to their destination.

Perhaps even more amazing are the aerial modules that are coming. A passenger module may arrive at a staging area on a wheeled chassis, where an aerial drone will attach itself to the top of the passenger module at the same time as that module is released from the skateboard chassis. In an automated, seamless process, the occupants will then be flown beneath this drone to their intended destination.

SELF DRIVING VEHICLES

All of the above is happening with surprising rapidity. Dozens of partnerships between major automakers and the technology partners they need to complete this process have already been formed and continue to be formed. San Francisco based Uber is working with Volkswagon and Nvidia, a major chipmaker and world leader in visual computing. Uber is also working with Toyota to develop self driving cars. Silicon Valley based Tesla continues to test “full self-driving hardware,” competing with Google spin-off Waymo, also located in Silicon Valley. Another credible Silicon Valley self-driving car startup is Aurora, which as reported by the San Jose Mercury earlier this year, is “formed by one-time heads of autonomous car projects at Google parent Alphabet and Tesla [and] will develop self-driving electric vehicles with Volkswagen and Hyundai Motor.”

Not to be excluded, Silicon Valley heavyweight Apple is confounding critics who claimed they might find achieving their business model of vertical integration too challenging to include vehicles. According to a March 2018 report in Fortune, referring to testing in California, “with 45 cars on the road, Apple is now testing more vehicles than its top rivals. Tesla, for instance, has 39 permits. Uber has 29 permits, according to the report. Alphabet’s Waymo had more than 100 permits in June 2017 and has 24 now.”

According to the same report, “Apple is now second behind General Motors’ Cruise company, which has 110 self-driving car permits in California.” The GM owned company, Cruise Automation, is headquartered in San Francisco. GM’s strategy? According to The Street, GM intends to “deploy self-driving taxis in dense urban environments to take passengers from point A to point B. Rather than a one-time sale of the vehicle, the automaker can milk hundreds of thousands of dollars in revenue per vehicle.” And in that same report, Ford’s strategy is “using a new vehicle capable of carrying both people or items. The unit will run a hybrid engine and operate about 20 hours per day.”

The Mercedes F 015 “Luxury in Motion” Self-Driving Concept Car

Mercedes F 015

The above photo of the Mercedes F 015 “Luxury in Motion” Self-Driving Concept Car provides a glimpse into just how much vehicular travel is going to change. Note that the dashboard and control surfaces, including an almost vestigial steering wheel, are on the right side of the compartment. The front seats are swiveled to face the rear seats, turning the area into more of a lounge or conference room than a traditional vehicle compartment. The presumption is that most of the time the car will be self-driving, allowing the passengers to pursue many of the same sedentary activity options in the vehicle that they might pursue outside the vehicle.

When it comes to major automakers and high-tech corporations, it’s hard to find a company that’s not getting involved in autonomous vehicles. A March 2018 report in TechWorld attempts to catalog all of them – some not already mentioned above include Rinspeed AG, a Swiss automaker teamed up with Samsung; Volvo, teamed up with Uber; Chinese internet giant Baidu’s self-driving vehicle platform Apollo, which includes vehicle hardware, software and cloud data platforms to help others in the autonomous cars industry; Intel, which bought Israel-based driverless car technology firm Mobileye, in partnership together with BMW; Audi in partnership with graphics cards maker Nvidia; the list goes on.

Convinced yet? Driverless vehicles are coming. They are coming in myriad forms and will employ myriad business models. Stepping to the curb and using your phone to dial up a robotic ride, any type of ride, to any destination, will become commonplace. Scheduling personalized transportation services in advance will become routine. Ownership models will become more diverse. Individuals will own cars, but so will automakers, transit agencies, taxi services; who will own these cars of the future and to what purpose is only limited by one’s imagination.

PASSENGER DRONES

If the world of self-driving cars is just around the corner, then just down the street, also set to arrive sooner than expected, are passenger drones. And again, most of the major players are operating in California. Uber has formed “Uber Air,” or Elevate, to develop aerial transportation systems. Google has two companies, operating in stealth, Cora, and Kitty Hawk. Also active in California are the companies Aurora, in partnership with Boeing, and Vahana, in partnership with Airbus.

Cora’s experimental electric powered “Air Taxi” –
takes off like a helicopter, flies like a plane

Air Taxi

An interesting company based in Santa Cruz is Joby Aviation. While over a $130 million in financing and over 120 employees isn’t all that much so far, Joby Aviation appears to be a serious contender. Investors include Intel Capital, Toyota AI Ventures, JetBlue Technology Ventures, and Capricorn Investment Group. Despite being one of the most secretive startups in a sector where stealth is the rule, not the exception, an excellent report on Joby’s progress was published by Bloomberg earlier this year.  From a remote test station deep in the mountains of California’s central coast, the Bloomberg reporters were given a ride. From the article: “Powered by electric motors and sophisticated control software, the taxi performs like a cross between a drone and a small plane, able to zip straight up on takeoff and then fly at twice the speed of a helicopter while making about as much noise as a swarm of superbees.”

This is fascinating stuff. Apparently most “air taxis” (or “sky cabs”) being developed are powered by electricity, and in many respects are just enlarged versions of the drones now commonly used by hobbyists and photographers. Joby Aviation intends to build an aircraft with a range of 150 miles on a single battery charge, carrying up to four passengers. They would travel at relatively low altitudes to avoid having to pressurize the cabin. They expect to be “100 times more quiet during takeoff and landing than a helicopter and near-silent during flyovers.”

LAND/AIR HYBRIDS

No discussion of the imminent revolution in vehicle transportation is complete without considering the possibility of travel by land and by air in the same passenger module, with a separate wheeled module for land travel, which detaches from the passenger module when it is lifted airborne by a flight module. As reported earlier this year in Electrek.co, Audi and Airbus are working on just such a solution. The following two images are from a visualization of this futuristic transportation option prepared by Italdesign in partnership with Audi and Airbus.

Aerial drone/electric car hybrid concept –
passenger module prepares to detach from land module

Aerial drone electric car

Aerial drone/electric car hybrid concept –
passenger module now attached to flight module

flight module

The Hyperlane Option

If the Hyperloop might represent the fastest conceivable mode of land based travel, then, similarly, the “Hyperlane” might represent the fastest conceivable mode of travel by autonomous wheeled vehicles on a flat road surface. The hyperlane concept was conceived by UC Berkeley graduate students, Baiyu Chen and Anthony Barrs, who proposed the hyperlane concept in 2017 as their winning entry in the Association of Equipment Manufacturers “Infrastructure Vision 2050 Challenge.” AEM’s 2017 challenge to entrants was to present concepts to “support high-speed transportation by the year 2050.”

As reported in Fortune, “The duo’s idea was to construct a ‘Hyperlane,’ or a single platform the size of four interstate lanes that would run parallel to pre-existing highways in order for self-driving cars to travel at high speeds with no chance of getting into a jam. …’we realized we could remove the tracks and deploy new, emerging technologies like autonomous vehicles.’”

Whether the Hyperlane is a dedicated four lane highway, elevated over existing highways on existing right-of-ways, or additional specialized lanes similar to the HOV lanes we’ve already got, emerging automotive technologies support safer, denser traffic at higher speeds. Electric traction motors not only have extraordinary torque which delivers impressive acceleration, they also have a wide functional RPM range, zero to 20,000, far greater than combustion engines. Back in the 1990s, a prototype version of the now legendary General Motors EV1 was clocked at 183 MPH. The current crop of electric vehicles have top speeds that are deliberately limited by software; the Chevy Volt tops out at 100 MPH, the Tesla Roadster at 125 MPH, and the Tesla Model S at 130 MPH.

Using dedicated lanes for high speed vehicular travel has been tried already. The fast lanes on the German autobahns easily qualify. If you’re driving 120 MPH in the fast lane on the autobahn, you’d better watch your rear view mirror, because if a car traveling 160 MPH crashes into your rear end, it’s your fault. German drivers obey strict rules, the most critical of which is slower drivers must always yield to faster drivers by moving promptly into the left lanes, and faster drivers must never pass on the right. And it works. The fatality rate on the autobahn is much lower than on the United States interstate system.

The Case for Cars

The conventional enlightened policy wisdom is that driving cars on roads is an obsolete way for millions of people to travel. Policy driven alternatives, costing billions each year, include light rail, high-speed rail, trolleys and bike lanes. In support of these policy alternatives, “transit villages” are zoned, along with “densification,” based on the theory that if more people live near mass transit stations, and, in general, if more people live and work in smaller urban footprints, there will be less need for people to own cars.

To explore the costs and benefits of densification and urban containment goes beyond the scope of this report. But the primary problems currently inherent in relying on cars to fulfill the requirements of mass transportation – low speeds, unsafe, congested roads – are all being solved through innovation. With upgraded roads and updated driving laws, modern cars can sustain speeds as fast or faster than California’s proposed high speed rail. And there are a variety of ways that the new innovations that are transforming vehicular travel will increase safety and relieve congestion.

Private sector funding:

With minimal government investment, the private sector is creating connected and autonomous vehicles, completely redefining the car. The enabling technologies draw from diverse industries, resulting in consortiums that bring together participants from sectors including automotive, semiconductor, telecommunications, smart phones, aerospace, robotics and AI. One challenge is ensuring that the makers of this next generation of vehicles incorporate common standards.

To navigate the roads without a driver, self-driving cars rely on vehicle to vehicle (V2V) and vehicle to infrastructure (V2I) communications. The Michigan-based Center for Automotive Research, (CAR) with a mission ” to educate, inform and advise stakeholders, policy makers, and the general public on critical issues facing the automotive industry,” has produced several recent reports evaluating what they call “intelligent transportation systems.” In their 2017 report “Planning for Connected and Automated Vehicles,” they define V2V systems as “wireless communication between vehicles, such as safety warnings and messages.” They define V2I systems as “wireless communications between vehicles and the infrastructure, such as a system that connects a vehicle to cellular towers for navigation purposes.”

As the technology matures, several industry associations are working to harmonize standards for intelligent transportation systems, nationally and globally. In CAR’s 2016 report “Global Harmonization of Connected Vehicle Communications Standards,” they explain how interoperable communications systems in vehicles are necessary to resolve the following questions:

  • Which entities communicate and to whom (e.g., vehicle, pedestrian, roadside infrastructure, central servers)?
  • Which message set is used within the communication?
  • What media and channel allocation is used (e.g., 5.9 GHz)?
  • What application is implemented and how?

Private entities supported by industry are funding this effort and working closely with the U.S. Dept. of Transportation as well as with most states. Just a few of the major organizations involved in this effort include the International Organization for Standardization (ISO), ASTM InternationalSAE InternationalInstitute of Electrical and Electronics Engineers (IEEE), National Transportation Communications for Intelligent Transportation System Protocol(NTCIP), American National Standards Institute (ANSI), European Committee for Standardization (CEN), European Committee for Electrotechnical Standardization (CENELEC), and the European Telecommunications Institute(ETSI).

In April 2018, as reported in the industry publication Transport Topics, two of the most prominent associations involved in setting standards, the Institute of Electrical and Electronics Engineers and the American Center for Mobility announced they have signed a memorandum of understanding with the  to help accelerate development and deployment of voluntary technical standards for connected and autonomous vehicles.

Lower costs to the consumer:

To some extent, the fact that consumers will spend less for transportation is a function of the convergence of increasingly automated manufacturing, the availability and superiority of new composite materials to replace expensive steel, global competition, and progressively lower costs for software, chip sets, sensors and other high-tech components. Moore’s law is alive and well, and doesn’t just apply to semiconductors. But lower costs and more options for consumers of transportation will not only result from ongoing advances in manufacturing, they will also result from the rollout of a variety of new business models that offer a variety of new modes of transportation.

The disruptive impact of Uber, a ride hailing service that has challenged the taxi industry to its roots, is an early example of what is coming. Uber and its competitors are already testing autonomous vehicles, something that will become common. These driverless taxis will cost less to ride, since there won’t be a driver. Similarly, privately funded “micro-transit” services will offer mini bus services based on a connectivity and AI driven dynamic awareness of consumer demand and road conditions, offering shared rides based on aggregating riders who are boarding and exiting the mini bus along routes that are optimized to move the most passengers the fewest miles in the lowest amount of time.

Ride sharing, the 21st century version of picking up a hitchhiker, will also become a more viable option than ever. For example, participants in many ride sharing services will be members, vetted in a manner similar to the vetting that occurs with the hosts and the occupants of Airbnb properties. The advantage for the vehicle owner, of course, is a having a paying passenger join them on their commute, with the added benefit of becoming eligible to drive in carpool lanes.

Car sharing, where the user takes over a vehicle, is similar to a conventional car rental. The differences are a reflection of the new technologies. For example, using their smart phone or other connected device, consumers will order a car, and within minutes the driverless vehicle will arrive wherever they are. The car can be rented by the hour, or per day, or for a longer period. The price includes fuel and insurance costs.

Also on the way are mobility services, online aggregators of all transportation options. These mobility services will offer consumers transportation options tailored to their preferences. A consumer will be presented with a variety of ways to reach their destination, ranging from a single vehicle going point-to-point to a collection of travel legs utilizing public and private transit services.

The sheer variety of these emerging transportation options, primarily funded by the private sector, suggest that there will be vibrant competition for the consumer, driving down prices. Another significant factor in lowering prices is the fact that in general, the transportation services being offered will involve multiple riders on each vehicle, spreading the per-mile costs over more people, lowering per-mile costs for each of them.

Less traffic congestion:

The ability of next generation vehicles to create cost-incentives for individuals to opt out of purchasing their own cars will reduce the number of cars competing for space on congested roads. It will also reduce the demand for parking spaces and parking garages. This will be accomplished in a variety of ways. Through ride hailing, ride sharing and micro-transit services, fewer cars will be used to deliver the same number of commuters from bedroom communities to urban centers. Through sharing of self driving cars, an early commuter may arrive at their destination, but the car itself will immediately drive itself to the nearest next consumer, transporting them to their destination instead of taking up a parking space for the rest of the day. Mobility services will present consumers with customized options, resulting in compelling incentives for them to opt out of purchasing a car, or a second car.

The other way 21st century vehicles will alleviate traffic congestion is because as semi-autonomous vehicles – for example, collision avoidance systems which are already standard on most new cars – and fully self-driving vehicles become widely adopted, the safe distance between vehicles will shrink, as will the safe speed for vehicles. The adoption of next generation vehicles will mean that the same network of lanes and roads will be able to deliver more people. Michigan’s  Center for Automotive Research, in their 2017 “Future Cities” report, depicts how in the long term, once autonomous cars are fully adopted, urban boulevards may be reconfigured with narrower lanes and fewer lanes, without compromising mobility.

Autonomous Cars – Same Road Capacity With Narrower and Fewer Lanes

Autonomous Cars

PREPARING FOR NEXT GENERATION VEHICLES

It appears likely that the technologies for next generation vehicles, operating on roads and in the air, will mature faster than our ability to develop policies and infrastructure to accommodate them. This is particularly difficult since autonomous vehicles will not suddenly displace conventional manually controlled vehicles on our roads, but will share the roads with them for many decades. But the encouraging possibility with next generation vehicles is that the public infrastructure necessary to support them is relatively limited compared to the transit solutions that currently consume huge allocations of public resources.

For example, establishing uniform standards for autonomous vehicles is being actively coordinated and funded by the major automakers and aerospace companies, along with other private sector participants. The role of the state and federal departments regulating highway travel and aviation is vital, but will not consume significant funds compared to the cost of major infrastructure investments.

In the case of aviation, next generation solutions, ranging from passenger drones today to the supersonic electric airplanes that are likely tomorrow, are virtually all designed for vertical takeoff and landing, meaning that expensive airport runway infrastructure does not require expansion in order to accommodate them.

Similarly, autonomous land-based vehicles are designed to operate at higher speeds in closer proximity to each other, reducing the need to increase road capacity. Moreover, the emerging business model for next generation vehicles strongly incentivizes consumers to forego purchasing their own car, opting instead for ride hailing, ride sharing, car sharing and micro-transit services, which also reduces the number of cars sharing the road. These new mobility solutions will also reduce demand for parking spaces and parking garages, taking further pressure off of infrastructure requirements.

It may be that for urban areas, the impact of next generation vehicles combined with the contributions from aerial transportation options, combined with congestion pricing, will mean that the only road investment necessary within urban centers is to maintain and upgrade existing roads. For major intercity connector roads, highways and freeways, however, important policy decisions loom. Because as it is, these roads are not designed or maintained in a manner sufficient to allow next generation vehicles to reach their potential.

The implications of this are profound. Next generation vehicles, in all sizes and configurations, have the potential to replace most if not all proposed mass transit solutions both for intercity and long-range travel. The maximum safe and sustainable cruising speed of a modern electric vehicle is conservatively pegged at 120 MPH. Vehicles of the future will not only be configured similarly to conventional cars and SUVs, they will also be mobile hotel rooms, entertainment lounges, offices, conference rooms, and buses of all sizes, offering countless levels of services. On properly designed and maintained roads, there is no reason these vehicular solutions cannot replace literally all current or proposed modes of surface based transit, certainly including high-speed rail but probably including light rail as well.

Policymakers have a choice. They can recognize that private industry is creating new ways to travel on land and in the air. They can cooperate to develop uniform standards and updated laws to expedite this transformation. They can revise zoning laws, redirect funding priorities, and invest in new roads and communications infrastructure. Or they can neglect road construction and instead continue to build public mass transit systems that offer dubious prospects of ever solving growing transportation bottlenecks.

Elon Musk’s Boring Company is a privately funded transit solution that transports private vehicles point-to-point underground, moving them on and off surface streets with elevators. On the Boring Company’s FAQ page, focused on ways to dramatically reduce the costs of tunneling, a provocative assertion is made: “The construction industry is one of the only sectors in our economy that has not improved its productivity in the last 50 years.”

The next installment in this series will explore the implications of this assertion. What would it take to improve productivity in the heavy road construction industry? There has been a healthy public discussion regarding how much it will cost to build California’s high speed railroad. But how much would it cost to build roads in California? How much would it cost not only to catch up on all the deferred maintenance on California’s roads, and upgrade them incrementally, but to actually build new roads, north to south and coast to mountains, engineered for the cars of the future?

*   *   *

This article is the 3rd in a series on California’s transportation future. The first installment was “California’s Transportation Future, Part One – The Fatally Flawed Centerpiece,” published in April 2018. The second installment was “California’s Transportation Future, Part Two – The Hyperloop Option,” published in May 2018. Edward Ring co-founded the California Policy Center in 2010 and served as its president through 2016. He is a prolific writer on the topics of political reform and sustainable economic development.

The Public Deserves Transparency of Pricing at the Pump

Gas TaxFuel prices in California are among the highest in the country, as a result of some of the highest taxes in the country, plus the costs associated with compliance with various State environmental laws, which trickle down to the consumer, resulting in Californian’s paying as much as $1 more per gallon than most folks in the country. A bill currently working its way through Sacramento is SB 1074 (Moorlach) “Transparency in fuel taxes”.

Most everything that is bought, from clothes, computers, vehicles, etc., are based on price plus tax, except one item – transportation fuels, as the posted price includes everything.

Case in point was SB1 for Transportation Infrastructure funding that is targeted to raise $52 billion for infrastructure projects, added 12 cents to gasoline and 20 cents to diesel on November 1, 2016. With California already having some of the highest fuel taxes in the nation, the cost of those fuels did not change last November, but the posted price at the pump did change, but was not transparent to the public as to why fuel prices went up.

Low Carbon Fuel Standard (LCFS) compliance is getting tougher to meet each year as well as more costly each year. Today, the California Energy Commission (CEC) shows that the LCFS adds 10.1 cents per gallon for gasoline, and 6.8 cents for diesel. Those costs trickle down to the consumer and are hidden within the posted price of fuel at the pump.

The CEC also shows that Fuels Under the Cap (FUTC) i.e., the “boutique” fuel standards for gasoline and diesel required by the Federal Clean Air Act and the California Air Resources Board (CARB) to meet the state’s fuel blending requirements for reformulated gasoline standards accounts for 11.9 cents per gallon for gasoline, and 14.5 cents for diesel. Again, those costs trickle down to the consumer and are hidden within the posted price of fuel at the pump.

Cap & Trade revenues are funding the High Speed Bullet train as well as many other “green” projects. Within numerous state government agencies, there is a feeding frenzy on getting a piece of those lucrative cap and trade “fee” revenues for their projects. Again, those costs trickle down to the consumer and are hidden within the posted price of fuel at the pump.

The CEC shows that California fuel consumption is at the highest level since 2007. Fuels consumption for California’s 35 million registered vehicles in 2016, of which more than 90% were not EV’s, was 52 million gallons per DAY of gasoline and diesel. Sounds like a lot of fuel, but it’s only about 1 plus gallons per day per vehicle, resulting in refueling requirements every week or two.

With numerous incentives, 50% of the EVs in the nation are in one state-California, but they only represent about 7% of the 35 million registered vehicles. With the other 49 states accounting for the other 50%, it appears that nationwide, they are not endeavored by the EVs.

On a go forward basis, internal combustion engines appears to be the choice of citizens. The California economy is heavily driven by affordable transportation. Yet, Californians pay more per gallon of gasoline and diesel due to costs that are not transparent to the public.

A Yes vote on SB 1074 would expand transparency at the pump by creating a Quick Read (QR) Code that directly links the consumer with updated costs of taxes and regulated costs associated with the production of each gallon of fuel purchased would demonstrate that our elected representatives favor transparency of the costs that are included on the posted prices for fuel at the pumps to show the public why Californians are paying as much as $1 more per gallon than the rest of the nation.

On the contrary, a No vote on SB 1074 would demonstrate that our elected officials do not want the public to know why our fuel costs are among the most expensive in the country.

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

This article was originally published by Fox and Hounds Daily

Did Sacramento break the law in transportation tax rush?

los-angeles-freewaysDid lawmakers break the law when they passed Senate Bill 1, the transportation tax increase?

There’s a quaint provision in the California Constitution that reads, “A person who seeks to influence the vote or action of a member of the Legislature in the member’s legislative capacity by bribery, promise of reward, intimidation, or other dishonest means, or a member of the Legislature so influenced, is guilty of a felony.”

By the time Gov. Jerry Brown finished twisting arms and greasing palms to pass a massive transportation tax hike, that antique language was on the curb like a broken grandfather clock waiting for a bulky-item pickup.

Brown and legislative leaders promised a billion dollars for specific local projects in the districts of wavering lawmakers, and one termed-out Republican senator made a deal for a law to protect people in his profession — civil engineering, not the profession you’re thinking of — from liability in construction lawsuits.

It’s not easy to prove a quid pro quo, Latin meaning “something for something.” People don’t typically leave a written record that says, “I’ll vote for this if you vote for that.”

But one thing is different this time. In November, California voters passed Proposition 54, a measure aimed at guaranteeing transparency in state lawmaking. Prop. 54 says bills must be in print and online in their final form 72 hours before the Legislature votes on them.

The transportation tax increase, SB1, was posted online on April 3. If the Legislature was going to meet its self-imposed deadline to pass the bill on April 6, not one word of it could be changed before the vote.

So all the wheeling, dealing, greasing, and “promise of reward” had to go into a separate bill.

And it did.

SB132 contains a billion dollars of “that” which was negotiated in exchange for a vote on “this.”

Not only is it in writing, there are many statements on the record from lawmakers that their vote for the transportation tax was explicitly tied to a promise from the governor and legislative leaders that the “thats” would be delivered.

Are the deals spelled out in SB132 a violation of the law under Proposition 54? They are effectively amendments to SB1 that were written into a different bill. If that’s legal, then the 72-hour requirement that voters just added to the state constitution has already been thrown to the curb with the rest of the grandfather clocks.

Before the truck comes to pick up the garbage, we should retrieve that language about bribery and reward and see if it applies to outgoing Sen. Anthony Cannella’s deal to condition his vote for SB1 on the passage of SB496, a bill Cannella authored to protect “design professionals,” including civil engineers, from lawsuits stemming from future work. “Anthony is a civil engineer,” Cannella’s official bio states.

Maybe you’re thinking it won’t pass. He was ahead of you. Language was added to the billion-dollar spending bill, SB132, to make it “operative” only if SB496 is enacted.

In addition to the billion dollars of “reward” written into SB132 on April 6, the bill was amended on April 5 to add $1 billion for “augmented employee compensation.”

Yes, another $1 billion of “compensation increases and increases in benefits” for state workers was slipped in while everyone was wondering where the state spent all our transportation taxes.

Talk about being taken for a ride.

Susan Shelley is a columnist and member of the editorial board of the Southern California News Group, and the author of the book, “How Trump Won.”

Democrats eye post-election transportation session

As reported by Politico:

SACRAMENTO — After a year of stalled negotiations on a multi-billion dollar transportation plan, Democratic legislative leaders are privately discussing reconvening the state Legislature after the Nov. 8 election to take up road funding in a special session, legislative sources said.

In a lobbying effort supported by Assembly Speaker Anthony Rendon and Senate President Pro Tem Kevin de León, state Sen. Jim Beall and Assemblyman Jim Frazier, chairman of the chamber’s Transportation Committee, have reached out to colleagues in recent days to seek support for a transportation bill.

Frazier and Beall helped craft a $7.4 billion transportation proposal this year that would have included a 17-cent-per-gallon increase in the gas tax, though that measure would likely be amended before lawmakers take it up. Gov. Jerry Brown, who previously called for a smaller, $3.6 billion transportation package, remains resistant to the lawmakers’ more expensive proposal, sources said. …

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Special Transportation Session Stuck in Legislative Gridlock

road_blockMuch like much of the state’s traffic, the legislative special session on transportation/infrastructure is stuck in gridlock. Democratic legislators have a plan to provide $7.5 billion a year in new tax revenue. The governor’s plan also includes tax increases. Republicans want to use current tax revenue more efficiently, cap and trade funds for roads or direct some of the road related monies like truck weight fees directly into road improvements. Neither side budges.

Could this gridlock be altered by the results of November’s elections?

If the Democrats secure the two-thirds majority that would allow them to raise taxes without Republican support, then its game over, right? The Democrats will pass a tax increase and the governor will sign it.

Not necessarily.

While many Democrats are happy to blame the Republicans for the gridlock over the special session because the GOP won’t okay taxes, the scolding Democrats conveniently overlook a good portion of their own caucus, which is wary of raising gasoline taxes on constituents.

Recall that the piece dropped from the controversial SB 350 last year had to do with cutting gasoline use, which in turn would have increased gas prices, something Democrats particularly representing poorer or inner valley areas of the state did not want to do. Raising gas taxes will also add to the cost of gasoline.

Given the demands of voters to relieve gridlock on roads, the advocacy of the business community to spark the economy with a better transportation system, and the support of labor forces to get good construction jobs, you would think a compromise would be attainable.

But environmentalists and public unions don’t want to give on CEQA reform or restructuring CalTrans as some Republicans have suggested, and Republican legislators are concerned about a backlash if they raise taxes.

In the meantime, there are discussions about the possibility of a ballot initiative backed by the business community modeled after the school-funding plan, Proposition 98, which would dedicate money to transportation infrastructure and the roads.

If nothing comes out of the special session soon, other forces could attempt to deal with this crucial issue.

Originally published by Fox and Hounds Daily

Judge Rejects Uber Settlement, Saying It Lowballs California Labor Claims

As reported by Forbes.com:

A federal judge has thrown out a proposed $100 million settlement negotiated by a Boston lawyer on behalf of more than 200,000 Uber drivers in California and Massachusetts, saying it places too low a value on potentially costly claims drivers could bring under California labor laws.

U.S. District Judge Edward Chen, who has consistently ruled in favor of attorney Shannon Liss-Riordan over Uber’s fierce objections, rejected the settlement because it allocated only $1 million for claims under California’s Private Attorneys General Act, a law that allows employees to sue for civil penalties on behalf of the state. The California Labor and Workforce Development Agency estimated the value of those claims to be $1 billion if a court determined Uber drivers were employees and not independent contractors, as Uber maintains.

The judge also dismissed as meaningless an unusual provision in the settlement that would increase it from $84 million to $100 million if Uber held a successful initial public offering, saying he couldn’t consider that part of the deal since he had no assurance it would happen. (Uber, which has a private market value of $28-$60 billion based on recent venture capital rounds, told the judge “it would not be proper” to respond to his questions about an IPO.)

The settlement came on the eve of the first trial, and Chen’s rejection puts …

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Gas tax hike of 17 cents per gallon part of new transportation funding plan

As reported by the Los Angeles Times:

Two Democratic lawmakers unveiled a $7.4-billion transportation plan late Wednesday, the latest effort to break through a yearlong logjam over the state’s funding woes.

The plan, highlighted by an increase of 17 cents per gallon in the gas tax, comes from Assemblyman Jim Frazier (D-Oakley) and Sen. Jim Beall (D-San Jose) in an attempt to unify the disparate proposals the pair had previously introduced in their respective houses.

The combined plan is more than double Gov. Jerry Brown’s $3.6-billion proposal, which calls for a 6-cent gas tax hike.

“We need to be able to have a big plan to be able to be effective and catch back up,” Frazier said.

Last summer, Brown called a special session of the Legislature to highlight the $130-billion backlog in state and local road repairs, as well as the billions more in other transportation budget deficits. But lawmakers have made little progress, especially with gas tax hikes — which would require a bipartisan supermajority vote — on the table. …

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The Good, Bad and Ugly – Impending Bills Impact Small Business

http://www.dreamstime.com/-image21552155As the Legislature reconvenes this week for its final month of business for the 2015-2016 legislative session, NFIB California reflected on victories and challenges ahead per the “The Good, The Bad, & The Ugly” bill list. Bills included in this list represent those which will have the greatest impact, either negative or positive, to our 22,000 small businesses across California.

As we enter these final four weeks of the legislative session, NFIB is prepared to hit the ground running to ensure the voice and interests of our 22,000 small business members, and their hundreds of thousands of employees, are heard regarding our remaining priority issues.

NFIB was proud to help stop a handful of ugly bills such as SB 878 (Leyva), the Predictive Scheduling Mandate, and SB 1161 (Allen), the ‘California Climate Science Truth and Accountability Act’ so far this year. However, several bad bills remain alive and we are prepared to put forth every effort to protect small business in these final weeks.

Environmental mandates, transportation taxes, protected family leave, and agricultural workers’ mandates are some of our top policy concerns as the legislature wraps up this two-year session. Given the current lack of transparency in the legislature, it is impossible to know every issue that will be brought up since bills can, and will, be gutted-and-amended without notice to the public.

AB 2757 (Gonzalez), which mandates overtime pay for agricultural employees, is a perfect example: this bill died on the Assembly Floor months ago, but has resurfaced in the form of AB 1066 without full committee scrutiny.

In the first half of the legislative session, we witnessed how swiftly the Legislature can ram through devastating public policy with the enactment of Senate Bill 3 (Leno), which increased the state minimum wage to $15 per hour. Therefore, our 22,000 members will be highly engaged and informed on these policy issues with a regularly updated ‘The Good, The Bad, & The Ugly’ bill list.

Currently, the list includes 39 bills total (23 active): 14 good (5 active); 7 bad (6 active); and 18 ugly (12 active). This list reflects proposals from the 2015-2016 legislative session, and as new bills are introduced or morphed into substantively new bills, this list will be updated. You can always find the current version at http://www.nfib.com/ca/gbu.

CA Executive Director, National Federation of Independent Business.

This piece was originally published by Fox and Hounds Daily

Legislature Returns to Action in August: What to Watch For

CA-legislatureAugust is sure to be a busy month in Sacramento, as legislators fight to get their priorities passed before the legislative session ends on August 31.

While a large number of bills will be debated, there are four things to watch for:

Environment

With the political backing of new polling, Senate Bill 32 — which would extend and increase the state’s greenhouse gas emission reduction goals — is sure to reappear.

Not only is it a legacy project for the termed-out Sen. Fran Pavley, D-Agoura Hills — who authored the 2006 measure that this bill would extend — but it is backed by both Democratic leaders, Speaker Anthony Rendon and Senate President Pro Tempore Kevin de Leon.

“A clear majority of Californians strongly support our state’s climate policies and expect their elected leaders to build on our progress battling climate change and air pollution while making investments in clean energy across our state,” de Leon said in a statement on Wednesday. “This is why the Legislature should extend our climate targets in statute by passing Senate Bill 32.”

Republicans are opposed to the measure, which leaves the power to a handful of moderate, pro-business Democrats. The bill passed the Senate in 2015, but was defeated on the Assembly floor and then granted reconsideration.

An interesting data point: 15 Assembly members didn’t vote — which is a way of voting “no” without any accountability.

Transportation

The Legislature has been in a special session on transportation since last summer to come up with a funding plan to fix the state’s crumbling roads — but with little headway. Gov. Jerry Brown estimates there are almost $6 billion worth of unfunded repairs throughout the state each year.

The dispute is largely between Democrats who have proposed additional revenues (taxes) and Republicans who believe new taxes aren’t necessary as the money already exists but has been redirected to stop budget shortfalls in other areas.

Rumor has it that Democrats will propose what could be a massive package including new revenue, like a gas tax hike, sometime next month — although, since there’s a special session, it could be introduced after the regular session ends.

Republicans are unlikely to budge, but it may not matter what they want. Republicans are in danger of ceding a supermajority to the Democrats in November. If that happens, Democrats would be able to approve new revenues without Republican support.

Of course, the required two-thirds majority wouldn’t leave much room for defections from moderate Democrats.

Overtime for farmworkers

While farmworkers do get overtime, it has a much higher threshold than other professions. A revived bill would, over time, bring the threshold in line with other professions. You may remember that this bill was defeated in June, but it has been repackaged into another bill.

Proponents argue that farmworkers shouldn’t be exempt from the same overtime and break rules as everyone else. Opponents say farmers can’t afford it, and that an industry dependent on weather and external price setting can’t be regulated the same as other professions.

It’s unclear what would be different when the next vote comes that would make business-friendly Democrats, who sided with Republicans to defeat the measure, change their votes. Election year pressure may sway some vulnerable incumbents.

Of course, the measure was only three votes shy of passage, so proponents may target the seven Assembly members who simply didn’t vote, six of whom are Democrats.

Housing

It’s widely reported that the state faces an affordable housing crisis, particularly in urban centers.

Gov. Jerry Brown has been trying to increase affordable housing supply with a plan to reduce regulatory barriers for developers trying to build low-income housing. His ideas have not been embraced by the Legislature and he faces opposition largely fromunions and environmentalists.

Meanwhile, Sen. Jim Beall, D-San Jose, still has hopes of putting a $3 billion, low-income housing bond on the November ballot.