As part of their effort to pay for the major transportation overhaul Gov. Jerry Brown has called for without levying new taxes, Assembly Republicans have proposed cutting 3,500 full-time positions from the California Department of Transportation, at a savings to the state of half a billion dollars.
Their proposal is taken from a 2014 Legislative Analyst’s Office report, which says Caltrans has too many engineers who prepare and oversee construction projects. The cut represents about a third of those positions, which the analyst’s report suggested could be eliminated without an effect on transportation work.
“It is not OK to continue having these people sitting idly by while we desperately need that money for transportation projects today,” said Assembly Republican leader Kristin Olsen. “There is absolutely no good policy reason to use taxpayer funds to pay 3,500 people to just be sitting around at a desk.”
But the claim that there are thousands of jobs to be cut is far from uncontested. The state Department of Finance, Caltrans and the union representing the engineers whose jobs would be cut all say the agency is now running efficiently.
“We’d stop working on projects (if the cuts were made),” said Jim Davis, division chief of project management at Caltrans. “We wouldn’t have the money to do any future projects the Legislature might be contemplating.”
The year-old report centers on an analysis of Caltrans’ staffing needs. The analyst’s office compared the amount of money Caltrans thought would be available for the state’s construction projects to the size of the engineering staff the agency retained over time.
Funding from some major sources, like Proposition 1B and the federal stimulus bill, had already largely dried up in 2014, and the agency was projecting money for new projects would go down 40 percent overall beginning that year. That, the analysis reasoned, should mean less work, and less work should mean fewer staff. So the analyst’s office recommended cutting 3,500 positions.
There the controversy begins.
“The LAO approaches these issues in an almost childlike manner,” said Bruce Blanning, executive director of the Professional Engineers in California Government union. He said cutting staff as transportation funding decreased was “not how any infrastructure program is run or should be run.” Blanning said it makes sense to keep staff on hand to prepare projects for the future, when more state or federal money might open up.
Officials at the Department of Finance, which vets the agency’s funding request each year, said that preparing so-called shovel-ready projects isn’t a major part of the agency’s workload but that the Legislative Analyst’s Office was still wrong about overstaffing.
The Department of Finance says its work on the estimate for Caltrans was more exhaustive than the legislative analyst’s. The department ran a zero-based budget analysis on Caltrans in 2013, in the funding cycle during which the Legislative Analyst’s Office produced its report. A zero-based budgeting process requires the agency to justify all spending from the ground up, rather than basing budget analysis on increases or decreases from a previous year.
Jessica Peters, a transportation analyst who helped author the report, said her work was a high-level overview. She measured overall transportation funding against the number of staff, because she thought the information provided by Caltrans about the workload of engineers wasn’t accurate.
The Department of Finance contends that’s a fatal flaw: It says the amount of support work on a multiple-year project may vary year to year, independent of that project’s funding.
“In the front end of a project, early on, you’re going to have a lot more funding” in engineering work, said H.D. Palmer, spokesman for the Department of Finance. “That’s one of the reasons we think the zero-based budgeting ... is the best way to look at it.”
Another question is also open for dispute: whether Caltrans needs to keep enough engineers on staff to handle all of its workload, or whether it’s better to contract with consultants.
Blanning, the union leader, said it’s often more costly to pay a consultant than a state worker.
“It wastes taxpayer money,” Blanning said. “It costs us to outsource the work, and that’s money we could be spending on construction.”
Over the long term, however, others say Blanning’s conclusion doesn’t hold up.
“The long-term cost of a full-time, permanent employee isn’t just salary alone – it also includes the costs associated with retirement and retiree health care,” Palmer said in an e-mail. “So while the hourly rate of a contractor might be higher, the total long-term costs of full time staff could be higher – especially when the workload is short-term or one-time in nature.”
3,500The number of full-time jobs Republicans recommend cutting from the state Department of Transportation
Davis said it is easier for his agency to end a contract with an engineering firm than to fire a state worker. That means hiring additional in-house staff in years when workload is high makes the agency less flexible when things get slower.
“We would like to have more flexibility. Because you can’t hire up enough,” he said. “You don’t want to hire people and then lay them off. That would be a morale killer.”
The analyst’s report noted that other state transportation departments and other types of infrastructure projects in California use public agencies or private consultants to perform large portions of their engineering work.
Olsen said greater use of consultants, along with finding more ways to partner with the private sector on projects, could lower costs so that more state money could be spent on road work, not designing and overseeing the projects.
But budget language passed by the Legislature this year, as in others, specifies the number of private consultants Caltrans can use – currently limiting them to about 10 percent of its full-time positions. Blanning’s union lobbies the Legislature on the state budget and spent about $1.9 million on campaign and other political contributions in 2014.