Government Waste Negates Justification for Transportation Tax Hike

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

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

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

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

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

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

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

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

This piecd was originally published by the Howard Jarvis Taxpayers Association

New Sales Tax Hike for Transit Doesn’t Add Up for Taxpayers

http://www.dreamstime.com/-image18514272Math is a funny thing.

Take averaging, for example. Mark Twain observed that if you have one foot in a bucket of ice and one foot in a bucket of boiling water, on average you’re pretty comfortable.

Similarly, consider subtraction. Somehow, government officials have calculated that subtracting money from your wallet for taxes actually puts more money in your pocket.

That’s the conclusion of a recent study of the economic effects of Measure R, the 2008 increase in the L.A. County sales tax of one-half of one percent to fund transportation projects.

The Los Angeles County Economic Development Corporation determined that over its 30-year lifespan, the Measure R sales tax will create $80.7 billion in economic output while costing each resident just $25 a year in higher taxes.

The Society of American Magicians prohibits them from revealing how this trick is done, but they can’t stop me from exposing the secret.

It’s done with mirrors. A typical dollar spent by the Los Angeles County Metropolitan Transportation Authority (Metro) is counted three times: once when Metro hands it to a contractor, once when the contractor hands it to a union construction worker, and once when the worker spends it on rent, food, car payments or entertainment. They call these reflections the “direct,” “indirect” and “induced” effects of spending.

This “multiplier effect” would work if the money spent by Metro was earned by Metro. But it’s not. It’s earned by you, and then taken from you with a higher sales tax.

The study uses another trick, division, to determine that this higher tax costs each resident only $25 per year. Using multiplication instead, the 30-year cost of Measure R comes out to $3,000 for a family of four.

Figured another way, if the 10 million residents of L.A. County didn’t have to pay that $25 per year in extra taxes, they would have an extra $250 million annually, $7.5 billion over 30 years, to spend on whatever they personally find useful. Add the multiplier effect to those numbers, without government middlemen, for a true picture of what’s lost to higher taxes.

Now Metro wants taxpayers to cough up another $120 billion for more transit projects. The money would come from adding more years to the 30-year Measure R tax and hiking the sales tax by another half-cent per dollar, raising L.A. County’s sales tax rate to 9.5 percent for 40 years.

The transit agency would then borrow against the future sales tax revenues to start spending the $120 billion immediately.

Just how much is $120 billion?

It’s enough to pay for the repairs and deferred maintenance of every freeway in California for the next 10 years, twice.

It’s enough to build 120 desalinization plants like the one in Carlsbad that’s supplying 7 percent of San Diego’s water.

It’s enough to pay off the student debt of everyone who was enrolled in a four-year college or university in California in 2014. Seven times.

But Metro wants to spend $120 billion on a long list of public transit projects, even though ridership on public transit is declining. Metro boardings are down 10 percent since 2006 despite $9 billion of spending on rail.

Metro CEO Philip Washington says ridership will increase when the system is fully built out. “We’re not building for today,” he said recently, “We’re building for 100 years down the road.”

A hundred years ago, a telephone looked like a black candlestick. It didn’t have GPS or a camera. It didn’t have a keypad, or a dial, or Angry Birds. It didn’t even have a ringtone unless you count the bell in the box on the wall.

If the people of 1916 had designed a communications system for “100 years down the road” and racked up $120 billion in debt to pay for it, we’d still be paying taxes for something that was long gone; and we’d be wondering why our taxes are so high, and why there’s never enough money for road repair or water projects or education.

That’s what happens when governments run up too much debt, as ours already have—local, state and federal alike.

Multiply that by your children’s future, and then by your grandchildren’s future.

And when you see Metro’s sales tax increase for transit projects on your November ballot, don’t get taken for a ride.

Controversial New Program Will Track Your Driving — For Tax Purposes

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

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

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

Losing gas

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

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

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

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

Making the transition

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

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

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

This article was originally published by CalWatchdog.com

Driverless vehicles and the future of L.A. transportation

As reported by the Los Angeles Times:

Gabe Klein knows a few things about commuting. At 44, he is an author, futurist, government consultant and former head of the Chicago and Washington, D.C., transportation departments. He grew up in his family’s bicycle business, eventually became a vice president of Zipcar, the car sharing company, and is now with Fontinalis Partners, a venture capital firm co-founded by William C. Ford Jr., the great-grandson of Henry Ford and executive chairman of Ford Motor Co. Fontinalis focuses on technology and transportation-related start-ups.

Over the years, Klein has become an advocate of alternative modes of transportation, which, he says, are now entering the mainstream. Among other things, he set up bike-share operations in Chicago and the nation’s capital. At Zipcar, he built one of the largest car-sharing systems in the country in Washington. Klein’s ideas about urban transportation are contained in his new book “Start-up City,” published by Island Press.

Last week at a presentation and panel discussion for students at UCLA’s Luskin School of Public Affairs, The Times talked to Klein about one set of wheels he prefers — the self-driving car — and how it might be used to improve mobility in Los Angeles and other cities …

Click here to read the full article

VIDEO: California’s high-speed rail to come in well above $68B budget?

“Taxifornia” author James Lacy discusses concerns about California’s high-speed rail project with Fox Business’ Stuart Varney including cost overruns and tunneling through the San Gabriel and Tehachapi Mountains.

Traffic deaths climbing in California – Is there a fix?

As reported by the Sacramento Bee:

It’s an unfortunate downside to the recession’s end: As more people return to work and more cars hit the road, fatal accidents are on the climb.

Nationally, road deaths jumped nearly 10 percent in the first three months of this year, according to the National Highway Traffic Safety Administration. California officials say they saw a 13 percent uptick over three recent years through 2013 and expect that trend to continue when 2014 numbers are finalized.

It’s no surprise, safety officials say.

“Realistically, when the economy started getting better, all indications …

Click here to read the full story

Chinese Venture Looks to Connect L.A. and Las Vegas Via High-Speed Rail

xpress-west-1 trainFor bemused Californians, there’s another bullet train in town, thanks to the Chinese government.

More specifically, credit — $100 million worth — goes to China Railway International USA, a venture spearheaded by Beijing’s national railroad, China Railway. The consortium has ponied up funds for XpressWest, “the transportation arm of Marnell Companies, a gaming resort development firm,” as the Sacramento Business Journal noted.

Formerly known as DesertXpress, the company has labored to send a high-speed track toward Las Vegas since “at least 2007,” reported the Los Angeles Times.

According to Chinese officials cited by the Times, passengers would travel “a 230-mile route with an additional stop in Palmdale and eventual service throughout the Los Angeles area using some of the same track that would be used by the publicly backed California high-speed rail project.” Past plans envisioned a run of 185 miles alongside I-15.

The logic behind the idea drew from some straightforward numbers. “About one-quarter of Las Vegas’s 41 million visitors in 2014 came from Southern California, according to the Las Vegas Convention and Visitors Authority, many via a several hour highway drive,” Quartz noted. Vegas has been without a passenger train since Amtrak shut down its Desert Wind line in 1997.

Logistical doubts

This  train, which would share track with California’s state-funded high-speed rail, has run into its own version of a problem plaguing that track: reaching Los Angeles proper. “The project has the approval to cover about 190 miles from Las Vegas to the California desert city of Victorville, about 100-mile drive northeast of Los Angeles. It hasn’t broken ground. The project still needs government permission to connect with Southern California’s population centers,” Fox News reported.

“The project currently lacks permission to connect with the state of California’s planned high-speed rail project at a station to be built in Palmdale, 50 miles west of Victorville. A mountain range and about 50 more miles separate Palmdale from downtown Los Angeles.”

Skeptics quickly emerged with unflattering questions about the logistical constraints that could be imposed by the train’s pathway and travel times. “Anybody in L.A. keen to drive to Victorville to pay $89 to take an 80 minute ride to Vegas on a high-speed train?” tweeted Bloomberg View’s Adam Minter.

Adding to the speculation, estimates emerged that the train would require far in excess of the $100 million the Chinese have so far made available. “China’s CRRC Corp’s unit along with its peers from China will implement the rail corridor project at an estimated cost of $5 billion,” the Venture Capital Post noted.

Marshaling support

As yet, American officeholders have remained cagey. Nevada Gov. Brian Sandoval said he hadn’t learned any details about the plans. “But in 2009,” according to the Las Vegas Review Journal, “the XpressWest project drew a key supporter: U.S. Sen Harry Reid, D-Nevada. ‘Senator Reid has been a cheerleader on this project for many years,’ Reid spokeswoman Kristen Orthman said Thursday. ‘He’s glad to see this progress and remains committed to assisting as needed.’”

And the Chinese government appears to have a firm interest in seeing the project to completion. Beijing created CRRC with the specific purpose of throwing the country’s considerable industrial weight around in foreign territories. “The merger of China’s two largest state-owned rail equipment makers has created an industry behemoth, second only to General Electric in size, that will be competing aggressively for projects across Africa, Southeast Asia, and Latin America,” Quartz observed. “China, once a major importer of rail technology, wants to be a world leader in high-speed rail, with projects that span the globe, focusing especially on emerging markets.”

But growth in the U.S. has also been marked as a priority. An employee of the conglomerate told Caixin online that the company “views China Railway International USA an important part of its plan to expand abroad.”

Originally published by CalWatchdog.com

Governor and Democrats Intent on Raising Taxes

TaxesMajority Democrats have made it increasingly obvious that they are intent on raising taxes on hardworking Californians. In the clearest sign yet, the governor released a draft transportation funding plan on Thursday, which includes a $65 fee on vehicle owners, an 11-cent increase in the diesel tax, and a 6-cent increase in the gas tax. This comes on top of the estimated 10-cent increase in the gas tax that kicked in earlier this year due to cap and trade.

The governor and legislative Democrats are spending more than ever before, but you wouldn’t know it by looking at our roads. California drivers pay one of the highest gas taxes in the nation, yet our infrastructure ranks near the bottom. The state has money to improve our highways without asking taxpayers for more. As Republicans, we continue to stand with families to say enough is enough and oppose new taxes.

On Tuesday, Senate Democrats passed several measures that contained no substantive content to the state Assembly. The procedural move, a tactic frequently used during the state budget process, makes it easier to facilitate backroom deals, giving the public little time to review final products. These vehicles would likely be used to push through tax increases, such as those proposed by the Governor. New taxes require a two-thirds vote of the legislature.

Just one week before, Democrats on the Senate Transportation and Infrastructure Development Committee approved a $35 increase in the vehicle registration fee and a 12-cent hike in the gas tax. A new poll out this week shows a majority of Californians oppose higher gas taxes.

California State Senate, 23rd District.

Originally published by Fox and Hounds Daily

Déjà Vu in the Special Session: Taxes vs. Reforms

tax signWatching the maneuvering to pass a transportation revenue package in the special session, I can’t help but think of the observation by that great philosopher Yogi Berra who said: “It’s déjà vu all over again.” The legislative scrum over a legislative roads fix is similar to the struggle to find common ground before Proposition 30 was put on the ballot.

Remember those days at the beginning of Governor Jerry Brown’s third term. Brown tried to pick off a few Republican votes to secure the two-thirds margin he needed to put a tax increase measure on the ballot. In return, the Republicans who were courted by Brown sought reforms to the spending side of the budget, particularly, a spending limit and a rainy day fund. Pressured by public employee unions, Democrats in the legislature showed no interest in accepting these reforms.

The effort to achieve a compromise package went nowhere. The governor then turned to the ballot, working with union groups already pushing a tax increase initiative to create Proposition 30.

On transportation in the special session, Democrats put forward a series of tax and fee increases. Republicans countered with a package of spending proposals using cap and trade dollars, redirecting current transportation revenues for the roads, re-doing Caltrans employment, and reconsidering the high-speed rail project.

Republican senate leader Bob Huff said there is no support for tax increases in his caucus. Democratic majorities in committee killed the Caltrans and high-speed rail proposals. Democratic Senate President Pro Tem Kevin de León said taking money from cap-and-trade for the roads is not a serious proposal. “There is no nexus between greenhouse gas emissions and potholes,” he said.

Rob Lapsley, president of the California Business Roundtable, which supports a compromise that would include both tax increases and re-directing cap-and-trade funds said, “Both sides will likely experience some pain, both sides will need to have some wins.”

At this stage there seems no give to accept any part of the plan put forth by the other side.

Negotiations will continue. But will history repeat itself if no deal is struck?

The forces behind the tax and fee increases could play the initiative card. With supporters in labor and big business, and if the governor endorses an initiative, they certainly have the wherewithal to qualify a measure for the ballot. But, how likely is it that voters would embrace a 12-cent per gallon gas tax increase and higher car registration fees if such a proposal qualified for the ballot?

Originally published by Fox and Hounds Daily

​California Taxpayers and the 20th Maine

20th-maine-round-topAlthough comparisons to actual wartime fighting should be used sparingly, California taxpayers can’t help but feel a bit like the 20th Maine Regiment at the battle of Gettysburg during the American Civil War.  The actions of the 20th Maine, depicted in the Pulitzer Prize winning book “Killer Angels” by Michael Shaara, are well known to Civil War buffs.

Led by Joshua Chamberlain, who later became Governor of Maine, the 20th Regiment became famous for its defense of Little Round Top, a small hill on the flank of the Union forces.  On July 2, 1863, the 20th Maine was positioned at the far left of the Union line with elements of the 44th New York, 16th Michigan, and 83rd Pennsylvania.  As the Confederacy began its attack, Chamberlain was alerted that the enemy seemed to be pushing toward the regiment’s left. Chamberlain ordered a right-angle formation, extending his line farther to the east.

After an hour and a half under heavy attack and running low on ammunition, Chamberlain saw the rebels forming for another push and ordered a charge down the hill with fixed bayonets, which caught the enemy by surprise. During the charge, a second Confederate line tried to make a stand near a stone wall. The isolated group of Union soldiers, now in a position from which to provide the rest of the regiment with support, fired into the Confederate’s rear, giving the impression that the 20th Maine had been joined by another regiment. This, coupled with the surprise of Chamberlain’s bold attack, caused panic among the Southerners’ ranks.

The Confederates scattered, ending the attack on the hill. If the 20th Maine had retreated instead, the entire line would have been flanked and the Union likely would have lost Gettysburg. Most Civil War historians agree that holding the hill helped the Union win Gettysburg and turn the tide of the war.

What is notable about the 20th Maine was the number of direct assaults launched directly against its ranks. Time and time again, enemy forces assailed the small force made up of mostly farmers, woodsmen and fishermen. Chamberlain himself was no professional soldier, but rather the Professor of Modern Languages at Bowdoin College.

Like the constant attacks on the 20th Maine, which depleted both the energy and ammunition of its members, political forces in California are lined up against taxpayers ready to make a final push as the current legislative session enters its final few weeks. The question is whether taxpayers and their allies in the Legislature – mostly Republicans – can repel all the tax hikes being proposed.

The proposals are many, varied and all dangerous. Senate Constitutional Amendment 5 seeks to rip Prop. 13 protections away from business owners, including tens of thousands of mom and pop stores. Assembly Constitutional Amendment 4 seeks to lower the two-thirds vote for local taxes which, if passed, will subject local citizens to massive new tax hikes. In a special session, which is not subject to the same time deadlines as the regular legislative session, there will be a huge push for new transportation taxes, slamming middle class working Californians who rely on their cars for both work and their family life.

Fortunately, there is plenty of ammunition taxpayers can use to counter the assault, starting with the argument that California is already a high tax state with a hostile regulatory environment that has driven many of its citizens and businesses to more friendly jurisdictions. Also, taxpayers will surely assert that, with a $6 billion surplus, the last thing we should be talking about is tax hikes. Finally, government waste in California continues to eat up tens of billions of dollars annually. All these contentions must be brought to the fore if taxpayers are to be victorious in stopping those who want even more money out of our pockets.

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 HTJA.org