MOORLACH UPDATE — Transportation Strategies — August 13, 2015

A report, titled "Transportation Strategies and Practices: Lessons for California," which was issued on February 12, 2008 by Tom Warne and Associates, LLC, provides a couple of interesting charts.

The first shows that California lags in the use of outsourcing:

The second shows the lack of importance transportation funding has been in California, on a per capita basis, with other neighboring states:

Even though the report is a few years old, California still hasn’t improved or become more nimble to our changing economy.

Consequently, the title of the Real Clear Markets piece below is right on target.

RealClearMarkets

California Must Get Serious About the Nation’s Worst Roads

By Carson Bruno

Despite California’s roads ranking among the worst in the nation and requiring between $6 billion to $10 billion in additional annual maintenance funding, Democratic legislative leaders and Governor Brown decided against including long-term, sustainable solutions in their negotiated budget this year. Instead, Brown called for a special session to deal with the gap. In political speak, this means that while transportation isn’t seen as a funding priority, it is seen as a way to increase taxes.

True to form, while Republicans in both the Assembly and Senate caucuses proposed government reforms to make the money available, Democratic leaders have proposed – as their solution – raising fees and taxes or creating new ones. Assembly Speaker Toni Atkins’ plan calls for a road user fee, charging California’s drivers another $52 per year to drive on the Golden State’s roads. Meanwhile, Senate Transportation Committee chair, Jim Beall, proposed a plan to raise the gas tax, the vehicle license fee, and the vehicle registration fee.

As I’ve noted before, California’s leaders have taken the state’s transportation system for granted, but as the Republicans have shown in their packages of reforms, making government more efficient and effective means getting more done with less taxpayer money. That’s a win-win for Californians. Two bills introduced by two Republican State Senators highlight this approach by the Republican Assembly and Senate caucuses.

SB X1 9 (John Moorlach): According to the Legislative Analyst’s Office (LAO), Caltrans – the state agency that oversees transportation projects – is overstaffed by 3,500 full-time equivalents, costing the state more than $500 million per year. Orange County State Senator John Moorlach’s SB X1 9 would require Caltrans to increase its number of contract employees by 5 percent annually until it reaches a 50:50 ratio of full-time staff to contractors. As the LAO has noted, Caltrans has immense variability in its projects, requiring it to constantly increase and decrease its staffing levels. The problem, however, is when Caltrans staffs up with full-time employees, it doesn’t staff down as the workload falls; hence, it retains staff it doesn’t need. Contract workers create flexibility, allowing Caltrans to efficiently manage its workforce while spending taxpayer money more effectively. In 2000, voters passed Proposition 35, which eliminated existing prohibitions that prevented state and local governments from contracting out engineering and architectural services to private companies. SB X1 9 empowers Caltrans to follow the voters’ wishes.

SB X1 3 (Andy Vidak): Since passage in 2008, California’s high speed rail project has been fraught with problems. Cost estimates have ballooned by 50 to 150 percent even despite the proposed route failing to meet the promised Los Angeles to San Francisco travel time. Despite having a negligible impact on greenhouse gas emissions reduction, Sacramento is using cap-and-trade funds to fill funding gaps. Private investors remain on the side-lines, and the federal government has stopped its financial support. Given all of its problems, Central Valley State Senator Andy Vidak’s SB X1 3 is very simple: give the voters a choice between the high speed rail or funding road maintenance and investment. In fact, the details of the project have been altered so much from what voters were promised in 2008 that the high speed rail train being built isn’t the project that voters approved. Moreover, it seems the public would be very pleased to re-vote. A LA Times/USC poll found that 52 percent of California voters wanted the project stopped and in a January 2015 Golden State Poll, just 16 percent of likely voters considered continuing the high speed rail project as Sacramento’s top priority versus 47 percent naming improving the state’s roads, bridges, and public transportation as the needing the legislature and Governor’s topmost attention.

Budgeting is all about priorities. There will never be a scenario when the state has enough resources to fully fund all of the legislators and Governor’s wishes; hence, choices need to be made. This transportation funding special session highlights the stark differences of opinions between Democratic leaders and the Republican minority: higher taxes vs. making government work more efficiently and effectively.

Hoover Institution research fellow Carson Bruno studies California’s political and policy landscape. Follow him on Twitter @CarsonJFBruno.

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