MOORLACH UPDATE — SB 1 — March 9, 2017

Yesterday morning’s Senate Governance and Finance Committee meeting only had one bill on its agenda, Senate Bill 1, Senator Beall’s transportation tax proposal. I stated that we all can agree that our roads need to be better maintained, but lamented that California’s legislature requires those living in homeowner associations to set funds aside, when it does not follow this sage advice itself.

I also lamented that the Legislature placed a higher priority on employees than roads (see MOORLACH UPDATE — Dam Problem — February 22, 2017 february 22, 2017 john moorlach). And I shared that the high-speed rail project should be stopped and the funding used for roads (see MOORLACH UPDATE — Fresno High-Speed Rail — March 8, 2017 march 8, 2017 john moorlach).

Then I asked a few questions (see the hearing here:

Here are the majority of them, paraphrased for conciseness:

1. With the approval by the voters last year of Proposition 55 and its personal income tax increase continuance and Proposition 56, the tobacco tax of $2 per pack, has the state hit the Gann limit? I cited a recent LA Times article for my question (see This is based on an recent brief by the Legislative Analyst’s Office.

2. With the signing of last year’s Senate Bill 32, which furthers the mandate in reducing the consumption of gasoline, why are we still focusing on taxing it to maintain our roads?

3. With our young people driving long distances to their places of employment due to the high cost of housing (drive until you qualify), why aren’t we modifying CEQA (California Environmental Quality Act) – which severely restricts developers’ ability to produce in-fill housing – to build more housing closer to job centers? After all, it is the state’s bad and severely antiquated laws that are now ruining our byways.

4. With the percentage of those at or below the poverty rate at the highest levels in the nation, why are we taxing the poor to fix our highways? We constantly hear about college students that are actually starving and families having to decide between food or gas. Why are the Democrats increasing costs for our poor? (Also see MOORLACH UPDATE — Sieve — March 2, 2017 march 2, 2017 john moorlach).

5. Why are we trying to invest in public transit when ridership is down? Are the poor, who are supposed to benefit from this public service, driving or carpooling instead? Plus, something that is not often discussed is the significant wear and tear to arterial highways caused by the constant use of heavy buses.

6. Why not increase the Vehicle License Fee? At least it would be deductible on individual income tax returns and would capture cars that are not paying the gas tax.

7. Why not have an electricity tax for those who charge their zero-emission vehicles at home?

8. The bill provides for $70 million in “efficiency improvements” at Caltrans (though I have no idea what that means or how one would measure it). If Caltrans reduces the 3,300 architects and engineers that have been deemed excessive, we can save $500 million. Then, if Sacramento outsourced 50% of our architects and engineers like most of the other states do, California can save another $200 million. I proposed a bill to do just that last year, SB 1X 9 (see MOORLACH UPDATE — SBX1-9 — July 18, 2015 july 18, 2015 john moorlach). You can also review the information we gathered here. Right there, we can achieve $700 million in savings. Why are we only aiming for ten percent of that amount? After all, Caltrans is one of the worst performing departments of transportation in the country. (Also see MOORLACH UPDATE — Seven Solutions for Caltrans — August 15, 2016 august 15, 2016 john moorlach).

I closed by stating that the majority party just approved $2.7 billion in state employee wage and benefit increases, but have not allocated one dollar to our roads. So rather than keep going to the people for tax increases , why don’t we tax the state. A five percent across the board reduction for every department, something that is done during economic downturns, will provide $6.125 billion without a tax increase. It is all about priorities.

Without an overall reform of the state’s budgeting plan to address our roads and other deferred expenditures, Californians will see another tax increase soon to address the unfunded defined benefit pension plan liabilities. And then another tax increase a couple of years later to fix our dams. And the nonsense continues. That’s how this blue state strategy works. Wait until it is really broken and scream for a tax increase.

KCRA Channel 3 was intrigued by my questions and came by for an interview. It is the first piece below. The LA Times must have been watching, as they provide the second piece below.

Obamacare has resurfaced as Washington, D.C. finally fixes this sad and tragic era in our nation’s history. I’ve been here before. I even predicted this massive and wasteful program would fail and be a heavy weight for our children and grandchildren (see MOORLACH UPDATE — Obamacare — March 8, 2012 march 8, 2012 john moorlach). The Sacramento Bee has me recalling these fun memories from four years ago, when I was serving as Chair of the Board of Supervisors, in the third piece below.

California bill aims to pay for infrastructure through gas tax, fees

Senate Bill 1 could produce $6B a year

Max Resnik

California’s Senate Bill 1, which is aimed at improving the state’s transportation infrastructure, easily cleared the state Senate’s Governance and Finance Committee by a 5-1 vote Wednesday.

If passed, SB1 would generate an estimated $6 billion annually for the state’s roads, bridges and transit systems.


  • SB1 clears Senate Governance and Finance Committee
  • SB1 would raise the gas tax, diesel tax and vehicle registration fees to pay for infrastructure improvements
  • Increase in the gas tax would be the first of its kind in 23 years

The money would be split down the middle between state and local agencies for maintenance and repairs.

Money raised by SB1 would help tackle the state’s 10-year, $59 billion maintenance shortfall and local governments’ $78 billion shortfall for roads, bridges and highways.

Here’s how the bill aims to pay for infrastructure improvements:

  • Increase the gas tax by 12 cents per gallon over three years, with a 6-cent increase in the first year followed by two years of 3-cent increases
  • Increase the diesel fuel excise tax by 20 cents and increase the diesel sales tax by 4 percent
  • Increase vehicle registration fees by $38
  • Require drivers of zero-emission vehicles to pay an annual $100 fee toward maintenance and repair

“We hope to make Caltrans a more efficient organization and by doing so, we will use the savings for more road repairs,” SB1 author Sen. Jim Beall, D-San Jose, said. “So, that’s the goal of this bill.”

If SB1 makes it to Gov. Jerry Brown’s desk in its current form, the gas tax would increase for the first time since 1994.

“You’re actually paying less taxes now in gasoline taxes than you did in 1994 because the economy of the average car – fuel economy – is better,” Beall said. “If you use less gasoline, you’re paying less taxes.”

Beall said the state’s increase in population and cost of living make the current budget for road repairs unsustainable.

The lone voice of opposition in committee on Wednesday came from Sen. John Moorlach, R-Costa Mesa, who argues the bill places too much of a burden on the state’s poor.

“They’re hurting those at the poverty level or below, which is right now the highest of any state in the nation,” Moorlach said.

However, Moorlach and Beall do share common ground.

Both believe zero-emission drivers need to pay some sort of fee because they’re able to use state and local highways and roads without contributing to their maintenance through the funds collected from a gas tax.

However, Moorlach said the Democrat-controlled legislature is missing the bigger picture.

“We’ve got a state that has said, ‘We want to incentivize the acquisition of electric cars. Oh, and by the way, we fund our roads through gas taxes,’’’ he said. “So, again, there’s this disconnect, where Jerry Brown is incentivizing one, penalizing the other.”

The bill heads to the Senate Appropriations Committee next. If it passes there, it would then head to the Senate floor.



A state transportation plan that would include tax increases takes another step forward

Patrick McGreevy

A bill that would raise gas taxes to chip away at California’s massive backlog of road and highway repairs passed its last of three Senate policy committees Wednesday as the clock ticks toward an April 6 deadline for acting on a transportation financing plan.

The deadline was set by Democratic legislative leaders and Gov. Jerry Brown, who is in negotiations with lawmakers to reach an agreement on differences between their proposals and his own plan with smaller tax increases. The goal is a plan that can win the two-thirds vote needed for passage to address the state’s $136-billion backlog .

One leading option is the bill approved Wednesday by the Senate Governance and Finance Committee that would raise an additional $5.5 billion annually for road repairs and mass transit, in part by increasing the per-gallon gas tax by 12 cents in phases over three years.

The measure by state Sen. Jim Beall (D-San Jose) also would set the price-based per-gallon gas excise tax at 17.3 cents, increase the diesel tax by 20 cents, boost the sales tax on fuel by 4% and increase the annual registration fee for all vehicles by $38 a vehicle.

“Our roads are falling apart, and we are going to have to pay more the longer we delay this,” Beall told the committee before its vote of 5-1 to support SB 1.

Sen. John Moorlach (R-Costa Mesa) voted against the bill, saying Californians already pay high taxes for roads.

“How do we justify raising the gas tax when such a large percentage of people are at the poverty level and below, and they need their cars to get to jobs?” Moorlach asked.

Sen. Robert Hertzberg (D-Los Angeles), another committee member, called the proposal “a necessary solution.”

Many cities and business groups support the measure, but it was opposed Tuesday by Michelle Pariset of Public Advocates, which represents low-income residents. She said more money is needed for mass transit. Others asked for more money for bike lanes.

The measure also was opposed by David Wolfe of the Howard Jarvis Taxpayers Assn.

“The public doesn’t want tax increases without reforms,” he told the panel.


GOP Obamacare repeal plan could hurt fight against Zika, hepatitis, other health problems

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In the Sacramento area, the fund has supported major public health projects including:

▪ A $98,950 UC Davis effort to prevent the spread of viral hepatitis through early identification.

▪ A $101,999 project at Sierra College in Rocklin to fight suicide among college students.

▪ A $484,389 initiative from the California Center for Public Health Advocacy in Davis to reduce chronic disease in diverse communities.

▪ A $2,661,141 effort by the California Rural Indian Health Board in Sacramento to prevent diabetes among American Indians. In 2017, the fund will award more than $900 million to programs throughout the U.S. addressing Alzheimer’s disease, immunizationbreastfeedinglead poisoningyouth suicide and more.

The Republican plan proposes discontinuing the fund starting in fiscal year 2019. The Affordable Care Act, which went into effect in 2010, not only expanded insurance coverage but also started initiatives to address a range of health issues, such as high hospital readmission rates, electronic medical record adoption and rising drug prices for Medicare enrollees.

The Prevention and Public Health Fund “is one of those very, very small and very, very unknown pieces of the Affordable Care Act,” said Dr. Ronald Chapman, public health officer for Yolo County and former state health officer at the California Department of Public Health. “In the scheme of the ACA, $1 billion is actually not much at all. But for public health at the CDC, it’s really vital.”

Opponents of the Affordable Care Act have called the Prevention and Public Health Fund an “Obamacare slush fund” and criticized it for supporting causes such as soda taxes, fast food bans and health care enrollment efforts. Republican legislators began calling for the fund to be slashed shortly after its creation. In 2012, Barack Obama cut the fund by 33 percent through the Middle Class Tax Relief and Job Creation Act.

State Sen. John Moorlach, R-Costa Mesa, said he has historically supported efforts to trim health education spending.

“I felt the federal government was getting into so much debt that this was more fluff than really useful tax dollars,” he said of health education programs. “It shouldn’t take much to educate someone to be preventative. … You could have saved more money by just giving everybody a gym membership.  It makes sense to pare that down a bit.”

Chapman said county health departments use the fund for much more than education. The fund has provided more than $28 million in vaccine supplies to the California Department of Public Health, which county health departments rely on to immunize children and adults, Chapman said. Without free vaccines available, low-income families may vaccinate at lower rates, increasing the likelihood that once-common diseases such as measles and polio will return.

The fund also supports laboratory capacity at the state and local levels so health departments can more rapidly diagnose infectious diseases and quarantine people to prevent their spread. Testing capacity was an issue during both the Ebola outbreak in 2014 and the Zika virus outbreak last summer.

The proposed cut to the fund alarmed state Sen. Richard Pan, D-Sacramento, a pediatrician who called it a short-sighted move that could harm state and local efforts to respond to potential outbreaks.

“When you erode our public health infrastructure, it’s going to curb our ability to respond effectively and quickly to health and safety,” he said. “It’s all about prevention. We need the capacity to track down and fight contagious diseases. When we don’t, people get sick and die.”

Dr. Sara Cody, health officer for Santa Clara County, said the fund was key during a bacterial meningitis outbreak at Santa Clara University in February 2016.

A few months before the outbreak, the county had already hired employees to create emergency preparedness protocols and work in the infectious disease lab. So when the outbreak occurred, Cody and other staff members were able to act quickly to diagnose students and request free vaccines from the state to stem the disease’s spread before tourists flocked to the area for Super Bowl 50, Cody said.

“We needed to mount a rapid and sure public health response to protect the students and to communicate very broadly what we were doing and that everyone was safe,” Cody said. “Right now we have enough of an infrastructure in place that we can turn on a dime and serve the people of Santa Clara County. Prior to this, it was much more of a nail biter.”

In Sacramento, the fund helped launch the Healthy Sacramento Coalition, which has worked with the county public health department to track chronic disease trends in minority and low-income communities, said Diane Littlefield, vice president of programs and partnerships for the Sierra Health Foundation. In 2011, the foundation received a three-year, $500,000 grant from the fund, via the CDC.

Though federal funding for the coalition ended in 2013, it continues to educate people about health in 15 disadvantaged Sacramento ZIP codes and promote healthy eating, tobacco-free living, access to clinical services, social and emotional wellness and safe physical environments, Littlefield said.

County health departments and nonprofit groups say they’ve been working with budgets already shrunk during the recession. Many doubt the state can backfill federal public health funding if the replacement plan cuts the fund.

“Prevention isn’t very sexy – we don’t talk about it a lot until we have a problem,” Littlefield said. “If we dismantle the infrastructure that’s in place, we won’t be able to respond to crisis immediately.”

Claudia Buck contributed to this report.

Sammy Caiola: 916-321-1636@SammyCaiola

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