AASHTO Journal, 29 January 2016
With revenue falling from the state’s motor fuel taxes, the California Transportation Commission approved a transportation program for the next five years that cuts $754 million from projected available funding.
A commission announcement said that “marks the largest scaling back of the state’s transportation program since the creation of the current funding structure nearly 20 years ago.”
The action came after Gov. Jerry Brown and the Legislature could not agree on a new revenue plan for road and bridge investments last year. The commission’s Jan. 21 decision also came as Brown, in his State of the State address that day, renewed his call for lawmakers to decide on a new infrastructure funding plan.
“We have no choice but to maintain our transportation infrastructure,” Brown said. “Yet, doing so without an expanded and permanent revenue source is impossible. That means at some point, sooner rather than later, we have to bite the bullet and enact new fees and taxes for this purpose. Ideology and politics stand in the way, but one way or another the roads must be fixed.”
Brown also said California has a “staggering” deferred infrastructure maintenance backlog of $77 billion, and “most of that is in our roads, highways and bridges.”
The 11-person California Transportation Commission is an oversight body responsible for programming and allocating funds for highway, passenger rail and transit improvements throughout California. It also advises and assists the state’s transportation secretary and the Legislature in formulating policies and plans for California’s transportation programs.
The panel said it made the programming decision “after careful review of current and projected financial information from numerous sources,” and emphasized that this will require withdrawing funds it previously committed to some projects.
“The action that the commission is being forced to make given the shortfall in projected revenue will have a dramatic effect on transportation projects being proposed for construction across the state. Typically, transportation projects are funded from multiple sources. The total impact of the defunding of projects will likely run into the billions.”
It said the effects go “beyond just meeting the transportation needs of Californians, as every $1 billion in highway and transit investment supports 13,000 jobs, not to mention higher costs associated with project delays.”
Commission Chair Lucy Dunn said: “What this means is that almost every county in California that relies on this source of funding for projects that improve traffic and air quality will have to cut or delay projects indefinitely.
“The commission adopted the most optimistic scenario we could make in good conscience,” she said, “in the hope agreement will be reached on a number of reforms and new funding increases currently under consideration by the Legislature. But failing that, I fear we will be faced with even more draconian cuts next year.”
It incorporated the big funding reductions in the latest State Transportation Improvement Program document for future state highway, intercity rail and transit improvements.
The financial outlook revisions, it said, “are the result of anticipated additional reductions in a portion of the gasoline excise tax, which is the major source of state funding for the program.
While just a few years ago the price-based part of the gas tax yielded 18 cents a gallon in revenue, last year it had dropped to 12 cents. Now the commission projects that it will “fall another 2 cents a gallon for the coming fiscal year and that stabilization of this source may take longer than expected.”
The STIP document is updated every two years, and the commission is required by law to estimate the amount of funding expected to be available for it.
“In August of this past year,” it said, “the commission approved a funding estimate for the 2016 program based on previous revenue forecasts that eliminated the capacity to add any new projects to the program. More recent projections, however, point to a worsening financial picture and a significant drop in the dollars expected to be available for projects in the 2016 plan. This will require the commission to rescind funding previously committed to projects.”