Commentary

04/28/2017 by Jim Mayer

Yes, the new transportation package raises taxes. It also raises the standard for accountability.


(Photo Credit: Matthew Fern/Flickr)

Governor Brown signed a transportation package today that does two of the hardest things in California politics: Raise taxes (by $5.2 billion a year over the next 10 years) and ensure voters know where the money is spent and what they’re getting for it.

It is to the Brown administration’s credit—and to the credit of the 81 members of the Legislature who voted for it—that the new transportation package does both. Yes, to pay for needed road maintenance, taxes on gas and vehicles will go up. But the legislation also sets a new standard for accounting how these new dollars will be spent.

In the final votes this month on SB 1, the main transportation bill, and several companion measures, there has been the usual grumbling from critics opposed to new taxes or frustrated by the politics of getting to a two-thirds majority. Many Republicans have spoken out forcefully against the bills, calling the package a “backroom deal” and a “corrupt bargain.”

Those are strong words, and in this case, they are not warranted.

After examining the contents of the new spending package, all of which was in print three days before a vote (as required by the Constitution), this is what CA Fwd concluded about the new taxes:

"The final bill satisfies all of the criteria for sustainable tax policy identified in CA Fwd's Financing the Future Series....SB 1 would balance equity concerns (by pairing regressive gas tax hikes with more progressive new vehicle value fees). It would produce significant revenue that would be fairly stable. And it would fund activity that encourages economic growth and efficiency—all in the service of meeting a clearly defined state priority: maintaining California’s road and transit systems.”

The new revenues raised by higher gas taxes and vehicle fees will also be held to a higher level of accountability than any other tax bill in recent memory—a dramatic departure from the old-fashioned approach to state spending, where funding formulas determined how money was doled out each year, regardless of whether intended goals were being achieved.

Today’s road funding legislation does none of that. While a companion measure requires all new funding to be spent on transportation (itself a big step toward accountability), SB 1 includes several robust new provisions for ensuring this money will be spent wisely: The measure sets a new precedent for a policy of this size by setting clear performance metrics and goals (requiring the Department of Transportation to use new funding to ensure more than 90 percent of the transportation system is in good condition, for example). Before distributing $1.5 billion each year in new road funding to local communities, the state will also require jurisdictions to write their own expenditure plan with expected results—and update the state annually on progress or face funding cutbacks.

The measure also creates new layers of oversight that can help state and local agencies reduce bureaucratic bloat and improve project management. The bill greatly expands the California Transportation Commission’s ability to track how Caltrans spends its money—requiring the agency to report annually on projects’ “cost, scope, schedule, and performance metrics.” It also creates a new independent Inspector General who will monitor Caltrans, local agencies, and nonprofit groups that receive new funding.

This is what accountability looks like: Sound public policy matched with a long-term commitment to rigorous oversight. Never before has the state focused this much funding on a clearly defined set of outcomes—and on ensuring public resources produce results.

The transportation package shows this approach works. It should also give state leaders confidence that they can apply the same model to California’s next set of daunting challenges—whether it is funding other infrastructure investments (water facilities, for example) or improving oversight of climate policies to ensure they are achieving the state’s environmental and economic goals.

With the governor signing this legislation into law today, the administration and the Legislature should be applauded for achieving a significant policy victory—and for doing it the right way, with an emphasis on transparency and accountability. 

Categories: Fiscal Reform, Revenue Reform

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