Capitol Alert

It’s back to the negotiating table for transportation funding, threat of cuts

When the California Transportation Commission said last week that it planned to sharply reduce funding for transportation projects due to declining gas tax revenue, the resulting publicity served to reinforce Gov. Jerry Brown’s appeal for new taxes and fees to pay for road and highway work.

The announcement, issued one day after Brown renewed his pitch in the State of the State speech, followed a year in which Brown and the Legislature failed to agree on a multibillion-dollar road funding package. The commission’s estimated spending reduction, $754 million over five years, cut deep.

By early this week, state officials were compiling lists of affected projects, and local project managers were sounding alarms. The commission’s executive director, Will Kempton, prepared to go on the road Tuesday to discuss the shortfall, among other issues, with business leaders in Silicon Valley.

“We have to call attention to this,” Kempton said. “This is very serious.”

We have to call attention to this. This is very serious.

Will Kempton, California Transportation Commission executive director

Yet as Brown and lawmakers prepare to enter another spate of transportation funding talks – this time with the commission’s threatened cuts looming – there is little to suggest a change in air at the Capitol that would make this year more conducive to agreement.

In fact, the timing appears less favorable. Enacting a tax increase would require the support of at least some legislative Republicans, always difficult but likely more so amid the rancor of an election year. Nor is it clear that every Democrat in the Legislature will vote for a tax.

“The discouraging thing is the election year,” said Michael Penrose, director of the Sacramento County Department of Transportation. “I’m not a politician, but when you come into an election year, I’ve noticed more hesitancy in terms of dealing with taxes and dealing with things that may be a little bit more controversial – or significantly more controversial.”

He said, “It has us very concerned.”

The discouraging thing is the election year.

Michael Penrose, director of the Sacramento County Department of Transportation

Much of California’s highway system was built before the 1970s, and with more people traveling more miles on increasingly dilapidated roads, the transportation network has suffered. Motorists feel the effects. A majority of California voters want more money spent maintaining existing infrastructure, according to a Field Poll last year, and a plurality of voters favor spending on new construction. But there is no public consensus about how to pay for it.

The Brown administration estimates deferred maintenance in state infrastructure at $77 billion, most of which is for highways, bridges and roads.

“Ideology and politics stand in the way,” Brown said last week, “but one way or another the roads must be fixed.”

In the Sacramento region, the Transportation Commission said reduced funding estimates could affect plans to widen Hazel Avenue from Sunset Avenue north to Madison Avenue, as well as a track construction project to increase service on intercity rail between Sacramento and Roseville. Plans to widen or improve other roads, to install ramp meters along various roadways and to make streetscape improvements are also targeted.

The state’s gas tax last went up in 1994, and more recent efforts to increase transportation funding have faltered. In 2014, transportation advocates proposed – then abandoned – a ballot initiative to more than double the vehicle license fee for road improvements. The last statewide transportation bond was approved during Gov. Arnold Schwarzenegger’s administration, in 2006.

Mike Genest, who was Schwarzenegger’s finance director, said the bond “had a lot of benefit” for California roads but was “absolutely terrible” for the state budget.

“Putting the general fund on the hook, no matter how important an issue, was insane,” he said. “Why did we do it? Because, quite frankly, politicians love free money. In other words, if you don’t have to raise a tax, if you don’t have to vote to cut social programs, you’re going to get a lot of people to vote ‘yes’ on that deal.”

With Brown suggesting last year that he is unwilling to entertain another bond measure, Genest said, “We have to actually solve the problem. It comes down to either you make things way more efficient by changing regulatory structure – and even that wouldn’t be enough, but it would help – or you take a bunch of money away from something else, or you increase the revenue stream from user fees.”

Brown has proposed a 10-year, $36 billion funding package that includes a mix of taxes, fees and other revenue sources, including a restructuring of the gasoline excise tax. A portion of that tax, based on the price of gas, has fallen in recent years, and the Transportation Commission’s reduced funding estimates are based on an expectation that revenue will continue to decline.

I think common sense will prevail. I really do.

Assembly Transportation Committee Chairman Jim Frazier, D-Oakley

On Tuesday, Assembly Transportation Committee Chairman Jim Frazier, D-Oakley, said he and Sen. Jim Beall, the Democratic chairman of the Senate Transportation and Housing Committee, are meeting to negotiate a common road funding proposal to advance in the Legislature.

“Anytime you get close to an election, obviously there’s the anticipation that people will be a little bit squishy, right?” Frazier said. “But the longer we wait, the worse this situation gets ... I think common sense will prevail. I really do.”

Funding for road projects has traditionally benefited from support not only from Democrats and their construction union allies, but also from Republicans sensitive to commercial interests in transportation.

Yet Republicans in the Legislature have objected to new taxes or fees for roads, arguing money is available elsewhere in a state budget currently running a surplus.

Following Brown’s State of the State address last week, Senate Republican leader Jean Fuller of Bakersfield said that with the amount of revenue the state government is collecting, “it seems a little premature to fix the newest problems with new taxes.”

Celia McAdam, executive director of the Placer County Transportation Planning Agency, which is working on the Capitol Corridor project, said the amount of attention transportation funding has gained at the Capitol in recent months leaves her hopeful that “stars might align and things might come together” on an agreement.

But McAdam said area officials are also conducting polling to determine the viability of passing a local transportation tax. Many agencies are hoping for funding from other, growing sources of state revenue, such as cap-and-trade, money polluters pay to offset carbon emissions.

Of the prospects of an agreement on the broader transportation package, McAdam said, “We’re not planning on it. I’ll put it that way.”

David Siders: 916-321-1215, @davidsiders

Threatened road funding

Some of the projects in the six-county Sacramento region that could be delayed after the California Transportation Commission reduced state funding last week:

Sacramento County

  • 39 replacement compressed natural gas buses. $18.5 million
  • Add ramp meters on Capital City Freeway, Interstate 80, Highway 99. $11.5 million
  • Widening of Hazel Avenue between Sunset and Madison avenues. $7 million
  • 14th Avenue extension to Florin Perkins Road. $4 million
  • Widening of Grant Line Road in Elk Grove. $3.8 million
  • Green Valley Road widening in Folsom. $3 million

El Dorado County

  • Eastbound Highway 50 offramp to Ray Lawyer Drive. $5.5 million

Sutter County

  • Replace Fifth Street bridge over Feather River between Marysville and Yuba City. $17.4 million

Placer County

  • Track improvements to allow increased Capitol Corridor train service to Sacramento. $3 million

Yolo County

  • Improvements to Third Street in Davis. $3.3 million

Source: Sacramento Area Council of Governments