08/21/2015 by Justin Ewers
Early signs of a deal emerge in special session on road maintenance
(Photo Credit: Chris Hunkeler/Flickr)
Outside a Senate hearing this week on how the state should pay for a nearly $60-billion backlog in state road and highway maintenance and a $78-billion shortfall in funds to repair local roads, California’s political leaders appeared to be locked in their customary gridlock on tax issues. A broad new coalition of labor and business groups have called for raising $6 billion a year for transportation investments, including the first increase in the gas tax since 1994. Republicans, meanwhile, dismissed this approach, saying the state needs to spend the money it has now better—including the redirection of billions of dollars from California’s new cap-and-trade auctions (a tax idea Democrats, in turn, rejected).
As for the governor? Gov. Brown encouraged the Legislature to work out a bipartisan agreement, emphasizing the need for investment—but refusing to back any specific proposals yet. “I’m not going to put all my cards on the table,” he said. “As a brooding omnipresence, I stand above the fray here.”
Based on the headlines, it may sound like a case of so far, so bad for the new special session, but there is a noticeable gap between the political jockeying outside the Capitol and the earnest efforts to work toward a compromise within it. This week’s hearing of the Senate Committee on Transportation and Infrastructure Development was a case in point, with the committee reviewing six bills on Wednesday—all with different approaches to raising revenue and improving how the state spends it—and Democrats and Republicans alike demonstrating a genuine desire to find a solution.
Four bills ultimately emerged from the hearing (three of them authored by Republicans) that, taken together, could offer the first glimmerings of a potential road funding deal.
At the heart of this potential package is a combination of new money, new protections to ensure road funds are spent on roads, and new accountability measures to ensure Californians know exactly how and where the money is used. It seems clear that only with all three can lawmakers attract the bipartisan support they need to pass funding legislation.
“There are few policies that reach across all groups and constituencies with resounding agreement, and I think fixing our roads is one of them,” said Sen. Jim Beall (D-San Mateo), chair of the Senate’s special transportation committee. “I want to say I think we’re going in the right direction.”
Part one: New money
Beall is the author of a bill (SBX1-1) that would raise $4.6 billion in new money for roads—earning the support of Democrats with its combination of higher gas taxes (12 cents a gallon), a diesel tax increase (10 cents a gallon), new road access charges ($35 a vehicle), a bigger registration fee ($35 a vehicle), and a new charge for zero-emission vehicles ($100 a vehicle). The bill would also accelerate the repayment of $1 billion in outstanding loans borrowed from transportation accounts during the recession.
Beall noted that this lineup of revenue proposals already includes a compromise, of sorts: His funding package doesn’t touch the so-called “car tax”—the Vehicle License Fee that Gov. Gray Davis infamously raised a decade ago, leading to his recall. “I want to make it clear there is not currently any special session bill that uses the Vehicle License Fee,” Beall said, noting that he had backed away from the tax after discussions with Republicans. “It creates such a hullabaloo…I’m not going there anymore.”
Part two: Constitutional protections for transportation dollars
While no Republicans voted for Beall’s bill—and none are likely to until a more comprehensive deal is in place—both parties rallied around another idea: constitutionally protecting transportation funds to ensure they are actually spent on the roads. A second bill (SCAX1-1), introduced by Senate Republican Leader Bob Huff (R-San Dimas), would prohibit the Legislature from borrowing revenues from fees and taxes imposed on vehicles—and would also require any revenues from the Vehicle License Fee above its current rate of 0.65 percent to be used solely for streets and highways.
Though details are still being worked out—and the committee chose to hold onto the bill so it could better match these protections with new revenue ideas—both Democrats and Republicans expressed their support for the legislation, which would have to go before voters on the November 2016 ballot. “I would like to see [road funds] constitutionally protected. I’ll say that up front,” Sen. Beall told Sen. Huff. “I’m willing to work with you on this to make sure that happens.”
Part three: Accountability measures
While new, constitutionally protected funding could be part of an ultimate deal, it seems clear that a funding package will also need new accountability measures to ensure Californians know exactly how and where the money is used. In this week’s hearing, two bills that share this goal earned overwhelming support—including SBX1-13 by Sen. Andy Vidak (R-Hanford), which would create a new Inspector General to oversee how transportation funds are spent, and SBX1-12 by Sen. Sharon Runner (R-Antelope Valley), which would shift responsibility for overseeing state highway funding away from Caltrans, giving more authority to the California Transportation Commission.
For Republicans, in particular, increased accountability and transparency appear to be essential parts of any final deal. “We don’t have the confidence of the people we represent,” said Senator Patricia Bates (R-Laguna Niguel). “Until we have that…we won’t be successful,”
Bates also pointed out that, though, that even in tax-averse Orange County, which she represents, voters have supported local tax measures for transportation under the right circumstances. “I represent a very fiscally conservative part of state,” said Sen. Bates. “The mantra is ‘promises made, promises kept.’ Every dollar that [comes] into the Orange County Transportation Authority [has been] put on the roads.”
Might the same approach work for state transportation investments? The Assembly has not yet taken up transportation legislation and will certainly have its say. But in the Senate, a framework does seem to be emerging for a potential deal—one that could rely on a blueprint that’s worked in the past. Democrats and Republicans supported a gas tax increase in 1990, for example, that was contingent on the passage of a constitutional amendment, Proposition 111, that provided long-term budget assurances that were part of a comprehensive deal.
A similar agreement on a road funding package may be weeks—or even months—away. But inside the Capitol, it is becoming clearer how lawmakers could get there.
Categories: Fiscal Reform, Budget Reform, State Budget, Revenue Reform, Tax Reform, Economy, Regional Economies, Smart Investment, Infrastructure, Budget Reform, Infrastructure, State Budget, Tax Reform