Gov. Jerry Brown and Democratic legislative leaders continued their push Friday for quick approval of higher vehicle taxes and fees to pay for a 10-year, $52 billion plan to upgrade California’s roads and highways with the release of legislative language for two bills that appear to answer concerns that new revenue might be diverted to the general fund or used for the state’s embattled bullet train project.

Senate Constitutional Amendment 2 and Assembly Constitutional Amendment 12 both say the new revenue generated by Brown’s plan can be used only for transportation and not be borrowed or diverted for any other uses. The measures do not appear to have the weaknesses seen in two previous constitutional amendments meant to guarantee fuel taxes were used only for road improvements.

Proposition 42, passed in 2002, said sales taxes on fuel could not be used for anything but transportation purposes. But it allowed the money to be diverted on a two-thirds vote of both the Assembly and Senate.

After two diversions in subsequent years, voters in 2006 approved Proposition 1A, a constitutional amendment that said future diversions were OK in times of financial crisis, but would be treated as loans that had to be repaid.

In 2010, however, Gov. Arnold Schwarzenegger and the Legislature orchestrated a scheme to unencumber vehicle fuel sales tax funds that was based on a legal opinion that it was OK to adjust both sales taxes and excise taxes on vehicle fuel without overcoming the normal obstacles to tax hikes if the changes were revenue-neutral.

The scheme sharply cut fuel sales taxes and sharply increased fuel excise taxes, which were not subject to Proposition 1A protections. This allowed $1.8 billion in fuel excise taxes to be used to pay off previous transportation bonds instead of using general fund dollars.

SCA 2 and ACA 12 would forbid the use of new revenue for such bonds approved on or before Nov. 8, 2016. This provision would also prevent funds from being directed to the California High-Speed Rail Authority’s $64 billion project, original approved in 2008.

Zero-emission vehicles would face first fees

Here are the key details of Brown’s proposal, which targets an estimated $137 billion maintenance backlog on local and state roads and highways:

• It would raise gasoline excise taxes by 12 cents per gallon, a 43 percent increase, and index them to inflation.
• It would raise the diesel sales tax from 5.75 percent to 9.75 percent and increase the diesel excise tax from 16 cents to 36 cents per gallon.
• It would impose a first-ever road-use fee of $100 a year on owners of zero-emission vehicles who don’t buy gasoline and thus help pay for road and highway improvements.
• It would add a new annual fee on vehicles based on their value, with owners of vehicles worth less than $5,000 paying $25 ranging up to owners of vehicles worth $60,000 or more paying $175.

To become law, the two bills need two-thirds support from both the Assembly and Senate, meaning Brown, Assembly Speaker Anthony Rendon and Senate President Pro Tem Kevin de Leon either need some Republican votes or no Democratic defections. They hope to have finals votes taken by Friday, April 6.

Republicans rip plan — and some Democrats may as well

That looks to be a tall task. Assembly Republican Leader Chad Mayes of Yucca Valley appeared to speak for most or all GOP lawmakers when he ripped Brown’s plan, telling reporters, “The state government has mismanaged our transportation system now for decades and the only answer, the only response to that, is that the Democrats — the ruling party here in California — want to raise taxes.”

Meanwhile, in an era in which California Democrats’ hostility to fossil-fuel vehicles keeps building, the new fee on zero-emission vehicles and the divvying up of the $52 billion in new revenue is likely to rankle some. The package’s overwhelming focus is on road and highway improvements; $7 billion would go to mass transit and local public transit systems and $1 billion to new bicycle lands and pedestrian projects.

What happened in San Diego County in the Nov. 8 election could be telling. Measure A, an $18 billion program which would have used sales taxes to fund transportation improvements, was crafted by the San Diego Association of Governments with an eye toward winning over environmentalists. Transit and bicycling projects and improvements were to get $8.94 billion of funding, just under half.

But Measure A got 58 percent of the vote, less than the two-thirds needed, after being scorned by some liberals for spending too much on roads and by some conservatives for spending too much on transit.

That suggests some green California Democrats may not be happy with transit and bicycling only getting a 15 percent cut of Brown’s $52 billion package.

Reason’s 22^nd Annual Highway Report ranked California 42nd. While this is still in the lowest category, the ranking has steadily improved over the years, moving up from a low of 46th. Because of data-collection delays, the rankings only go through 2013.

The study measures a number of important factors: Road conditions on freeways and primary commercial highways, the state of each state’s bridges, fatality rates and various costs per mile – administrative, maintenance, capital costs and expenditures.

California has done particularly poorly on the spending side of the equation. It ranked 44th in total disbursements per mile; 43rd in maintenance disbursements per mile; 40th in capital and bridge disbursements per mile; and 47th in administrative disbursements. That reinforces a California state auditor study from last summer showing that Caltrans may have as many as 3,500 unnecessary job positions.

The state’s overall per-mile capital and bridges cost totaled nearly $170,000 – far costlier than highest-ranked South Carolina, at nearly $21,000, or middle-ranked Utah, at nearly $78,000. But California wasn’t nearly the worst. Worst-ranked New Jersey spends $839,000 per mile; Florida spends more than $380,000; and Illinois spends nearly $202,000. On administrative costs, California spends more than $47,000 per mile, compared to $1,107 per mile in top-ranked Kentucky and $3,762 in 10th ranked Texas.

On the bad side, California had one of the highest proportions of rural interstate mileage in poor condition, at 6.52 percent. Its urban interstate mileage in poor condition was even worse, at 13.32 percent, which isn’t a surprise to anyone who regularly navigates the Los Angeles, San Diego or Bay Area highway systems. The survey only looks at state-owned highway systems, not at the myriad local and regional systems that are in various conditions.

“The good news is that California reported the lowest percentage of deficient bridges of any state in the nation,” according to Reason Vice President Adrian Moore, writing in the Orange County Register. California also ranked 10th in highway fatalities with a rate of 0.9 per 100 million vehicle miles. The best performance was in Massachusetts, with 0.58 fatalities per 100 million miles and the worst was Montana, with 1.9 fatalities per 100 million miles. Those rates, however, have been dropping nationwide.

One of the survey’s authors, Reason Senior Fellow David T. Hartgen, told me Caltrans didn’t do anything dramatic between 2012 and 2013 to explain the rating improvement – but it did improve a significant number of bridges and roadways.

“A widening performance gap seems to be emerging between most states that are making progress and a few states that are finding it difficult to improve,” according to the report’s authors. “There is also increasing evidence that higher-level road systems (Interstates, other freeways and principal arterials) are in better shape than lower-level road systems, particularly local roads.”

The good news: California is among those states that are improving. The bad news: It has an extremely long way to go to reduce congestion and bring state and local roads up to snuff. On a controversial note, California’s recently released transportation plan seems to downplay the importance of expanding the state’s highway and road infrastructure.

The “California Transportation Plan 2040” focuses more on battling climate change than on expanding the state’s already clogged network of highways. “By 2040, California will have completed an integrated rail system linking every major region in the state, with seamless one-ticket transfers to local transit,” wrote Transportation Secretary Brian Kelly.

“Responding to the desires of millennials and aging baby boomers alike, we will further invest in complete, safe pedestrian and bicycle networks,” Kelly added. He also promised a new approach toward lowering maintenance costs on roads and bridges. But the state’s blueprint relies heavily on alternative transportation sources, rather than on freeways and road construction, given the “transportation system must do its part to reduce these threats (climate change) to our environment and health.”

Other reports paint a mostly gloomy picture of California’s transportation situation. Last year, the Senate Transportation and Infrastructure Development Committee – during a special session designed to come up with additional funding for transportation programs – reported that “54 of California’s 58 counties have an average pavement rating of ‘poor’ or ‘at risk,’ with much of this deterioration occurring over the past six years.”

Reason found California to top the national charts on bridge condition, but the state Senate pointed to 3,000 “structurally deficient bridges.” The committee pointed to an expected doubling of freight moved on California’s freeways (from 2002 to 2035), to suggest that the state’s infrastructure will face an accelerated level of deterioration.

The session failed to come up with a long-term funding solution, but that will no doubt be a top item for the Legislature next year.

Steven Greenhut is Western region director for the R Street Institute. He is based in Sacramento. Write to him at sgreenhut@rstreet.org.

Caltrans’ District 12 management terminated its lease two years early in Irvine for a new location in Santa Ana; to move from a space the union argues would accommodate space needs to a space that’s inadequate.

The new space saves about $1.2 million in rent annually, but it also reduces space by 50,000 sq. ft., which does not allow for the additional staff required for the traffic-relief construction called for in transportation proposals offered by both Gov. Jerry Brown and legislators.

“For state highways, this would require engineering design and construction inspection, but Caltrans is moving to a new location which would not have the space to house the staff needed to accomplish the program,” said Beth Katz, spokeswoman for Professional Engineers in California Government.

Pricey partitions

Caltrans will also install new, low-rise partitions for cubicles costing $1.7 million, over the objections of PECG and staffers. Spokesman David Richardson said the partitions are part of Caltrans’ “commitment to innovation and to sustainability issues such as maximizing natural light and increased ventilation to improve the mood and productivity of staff.”

Richardson said the low-rise partitions will improve communication also, and have worked in the offices of other companies in the old business park. However, PECG argues the partitions will kill productivity and morale, all for almost $2 million — especially when existing inventory has the partitions they prefer. 

“Shorter partitions result in more noise in the work area, are opposed by the employees, and cost extra money as compared to using the existing partitions,” Katz said.

Transportation proposals

The Legislature is currently in a special session on transportation, although legislators have left Sacramento until December. Although leaders could call legislators back to address the transportation issue before the November election, it’s not likely to happen.

Both Gov. Brown’s plan and the one proposed by the Legislature’s two committee chairs who oversee transportation call for increased taxes, which would require a two-thirds vote. Republicans have been publicly opposed to increased taxes to pay for roads, arguing that funds already exist in the budget, but there doesn’t appear to be sufficient support among Democrats either. 

Many Sacramento insiders privately predict that some members may be more inclined to increase taxes during the lame-duck session, particularly those who have termed out or been voted out.

There is also a decent chance that Democrats win a two-thirds majority in November, thereby removing Republicans’ ability to block increases in the next legislative session — although they would still need to get other Democrats on board.

Correction: An earlier version of this story said Caltrans owned its offices in Irvine. The space was actually a rental, hence the early termination of the lease. 

Transparency ballot measure nearly unopposed

Good Thursday morning! While the governor pumps out signed bills and vetoes to wind down the year, political campaigns are heading into the final stretch. 

Although one ballot measure campaign is hardly heating up. In fact, for all the fighting and million-dollar spending over November’s 17 ballot measures, one proposal stands nearly unopposed.

Though not entirely unopposed, the committee against a measure aimed at making legislative proceedings in Sacramento more transparent is unfunded and run entirely by the pro bono work of Democratic political strategist Steve Maviglio.

Maviglio has the political savvy to run the campaign — he’s working on two measures in support of the ban on plastic bags and against another measure to require voter approval for revenue bonds of $2 billion or more — but the money just isn’t there. 

“It’s an uphill battle to be sure because many donors have bigger fish to fry,” Maviglio said. 

CalWatchdog has more.

In other news:

• “Frustrated transportation groups urge the Legislature to come back in a lame-duck session,” reports the Los Angeles Times. 
• “The California Democrats running for U.S. Senate delved Wednesday into their records on for-profit colleges, with Loretta Sanchez continuing to tie Attorney General Kamala Harris to Republican presidential nominee Donald Trump and the businessman’s defunct Trump University,” writes The Sacramento Bee. 
• “California tenants have a new arrow in their quiver: a law to protect them from being unfairly placed on rental blacklists that jeopardize their credit ratings and shut them out of the housing market,” reports The San Jose Mercury News.
• “Gov. Jerry Brown, laboring to build support for California’s controversial cap-and-trade program, signed legislation Wednesday authorizing $900 million in spending on climate-related programs, including clean car rebates, parks and public transportation.” The Sacramento Bee has more. 

Legislature:

• Gone ’til December.

Gov. Brown:

• Another medal of valor ceremony, this time at 10 a.m. in Elk Grove for officers and staff of the California Department of Corrections and Rehabilitation. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

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Legislators asking for hike in gas tax to fund transpo plan

Good morning. Happy Monday. And welcome to the final stretch in Sacramento, where the legislative session ends on the 31st. 

One of the biggest items left unresolved is a transportation plan. The top transportation legislators in each chamber — Assemblyman Jim Frazier, D-Oakley, and Sen. Jim Beall, D-San Jose — are pitching a 17-cent-per-gallon gas tax increase to fund a $7.4 billion transportation program. They also want to increase the tax on diesel fuels by 30 cents a gallon and to make it easier to get approvals for transportation infrastructure improvements. Their proposal exceeds what Gov. Jerry Brown pitched last year.

Brown’s proposal — which went nowhere in a special session — was built on a 6 cent per gallon tax increase and other provisions that would have funded a $3.6 billion transportation plan.

CalWatchdog has more. 

In other news: 

• Speaking of a transportation plan, it’s one of several big items that will likely go unresolved this session, causing finger pointing and frustration. The San Jose Mercury News has more. 
• “For years, state lawmakers have been trying to crack down on private meetings between utility companies and members of the California Public Utilities Commission after revelations that top officials and industry executives had frequent dinner dates, shared talking points and even sketched out details of the multibillion-dollar closure of a Southern California nuclear power plant during a secret rendezvous in a luxury hotel in Poland.” But some worry that a package of bills under consideration by the Legislature to overhaul the commission won’t go far enough. The Los Angeles Times has more. 
• One senator upset someone on the other side of the Capitol, so they removed her name from her bill in retaliation. The Sacramento Bee has more. 
• And in a few days, the Legislature will say goodbye to one of its most accomplished members. The Los Angeles Times has more. 

Assembly:

• In at 1 p.m.

Senate:

• In at 1 p.m.

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @SophiaBollag

Two new startups — a third leader is based out of New York — have set up shop in San Francisco. The cofounders of Boosted Boards, thirty-something mechanical engineers from Stanford, won “backing from incubator program Y Combinator and startup accelerator StartX, as Inc. reported. ZBoard, founded by “two first-time entrepreneurs in their late 20s,” found backing through Highway1, a so-called hardware incubator. “The ZBoard is the result of a senior project at USC that grew into a 2012 Kickstarter campaign that launched the product,” as the LA Weekly observed.

New era, new law

Both companies were launched in 2012. But not until this year has California law adjusted to accommodate their innovations. Signing a bill this month advanced by Assembly Republican Leader Kristin Olsen, R-Riverbank, “allows the use of motorized wheeled devices, aimed at electric skateboards but which could be extended to other new contraptions, anywhere bicycles are allowed to go,” according to the Wall Street Journal. “The law, which takes effect Jan. 1, 2016, reverses a 1977 ban intended to keep noisy, stinky, gas-powered skateboards off the streets.” The bill was passed as AB604 by an overwhelming 32-1 vote in the Senate, CBS News noted.

Although some strictures remain, the new rules allowed broad new freedoms of movement. Riders 14 and older will be able “to ride electric skateboards in California bike lanes, bike paths, sidewalks, trails and roads where the speed limit is 35 miles per hour or less,” as the Weekly reported. The boards typically reach peak cruising speed of around 20 miles per hour.

Boosting an industry

Olsen took an early lead in promoting the change, sensing an opportunity for Sacramento Republicans to notch a legislative victory on a popular, forward-facing issue. “It’s a great, viable transportation option for those short commutes,” she told the Sacramento Bee in March, demonstrating her own skills on an electric board. “It just doesn’t make any sense to allow an industry to build in California, but not to grow roots here,” she said.

“She also promoted the job-creating possibilities of companies that make the electrically-motorized skateboards, introducing the founders of ZBoard, a start-up that manufactures its boards in Riverbank, to share their story.”

There is consensus that California’s roads and highways must be fixed. There is no consensus how the fix should be paid for.

A Special Session legislative meeting Friday was called a first step in finding agreement to the funding problem. The Democrats see tax increases as part of the mix; Republicans want to prioritize the use of existing dollars for the roads. The tricky part of compromise is the push for any taxes in the context of so many other tax increases that could be presented to voters in 2016.

Governor Jerry Brown has proposed a yearly funding package for the roads of $3.6 billion. The package includes a 6-cent gasoline tax increase, an 11-cent diesel tax increase — both tied to inflation — a $65 car fee and cap-and-trade funds. His proposal is little more than half what legislative Democrats and a coalition of business, labor and construction groups have called for.

Republican proposals also include cap-and-trade money. In this case, the money would be used directly for the roads. The governor’s plan would funnel cap-and- trade dollars to bus lanes and rail. The Republicans also would trim CalTrans staff, direct weight fees and other transportation monies exclusively for the roads and employ other methods without raising taxes.

Not only have the Republicans expressed opposition to tax increases but there is no certainty that all Democratic legislators would support a tax increase.

The informal group of moderate Democrats who banned together to stop the provision to cut petroleum use in half over 15 years in climate change bill SB350 objected that their constituents would pay a higher cost for commuting. And cap-and-trade now covers gasoline refining and has raised the cost of gasoline about 10-cents a gallon. Additional taxes on gasoline would adversely affect many of their constituents, the moderate Democrats believe.

The governor wants the funding package to move through the Legislature quickly for strategic reasons.

For one thing, the plunging cost of gasoline may undermine the argument that the gas tax increase will hurt low-income drivers. Even a tax increase on gas would leave the cost of a gallon of gasoline well below recent price levels.

If debate lingers until next year, it becomes an issue for candidates running for office in an election year. Remember, a car fee increase was a major reason for a governor’s recall just a decade ago.

If a package of gasoline taxes and car fees should end up on the ballot it would likely get a cold stare from the voters. Likely there will be a number of tax increases on the November ballot. An extension of Proposition 30, a cigarette tax, perhaps a property tax, maybe others could be on that ballot. A roads funding package will not look so good in the context of all these tax increase proposals.

The roads and highways are the veins and arteries that pump life into our economic system. They must be cared for to prevent the economic system from getting a form of man-made sclerosis. The governor and legislators during the Special Session are walking a tightrope to balance the need to improve the roads and highways with voters being turned-off by a slew of tax proposals.

Remember those days at the beginning of Governor Jerry Brown’s third term. Brown tried to pick off a few Republican votes to secure the two-thirds margin he needed to put a tax increase measure on the ballot. In return, the Republicans who were courted by Brown sought reforms to the spending side of the budget, particularly, a spending limit and a rainy day fund. Pressured by public employee unions, Democrats in the legislature showed no interest in accepting these reforms.

The effort to achieve a compromise package went nowhere. The governor then turned to the ballot, working with union groups already pushing a tax increase initiative to create Proposition 30.

On transportation in the special session, Democrats put forward a series of tax and fee increases. Republicans countered with a package of spending proposals using cap-and-trade dollars, redirecting current transportation revenues for the roads, re-doing Caltrans employment and reconsidering the high-speed rail project.

Republican senate leader Bob Huff said there is no support for tax increases in his caucus. Democratic majorities in committee killed the Caltrans and high-speed rail proposals. Democratic Senate President Pro Tem Kevin de León said taking money from cap and trade for the roads is not a serious proposal. “There is no nexus between greenhouse gas emissions and potholes,” he said.

The puzzle — how to get more money from drivers when you want them out of their cars?

The problem of raising money from diminishing use of a product is becoming endemic in California. Previously, I’ve written that agencies that rely on tobacco tax revenue are scrambling for more money as tobacco use drops off. In the same vein, water agencies are watching their budgets shrink as consumers use less water in response to the drought.

With better mileage per gallon of gasoline for newer cars and the introduction of electric vehicles, gas tax revenue has been reduced.

The conundrum continues if seeking gas and diesel tax increases and maybe even a mileage charge on vehicles goes forward at the same time city and state planners concoct strategies to keep vehicles parked in the garage.

A proposal introduced Monday by the California Chamber of Commerce, the California Business Roundtable, the California Association of Counties, the League of California Cities, and the California Alliance for Jobs representing construction unions would raise revenue for infrastructure from gas tax and diesel tax increases, boosts in vehicle registration fees as well as cap-and-trade money.

The L.A. proposal is designed to get drivers out of their cars — but opponents of the plan say it will do nothing more than lead to congestion and frustrated drivers. As someone who has seen a nearby street lose a lane to bicycle traffic, I can attest to that concern.

Senate Bill 375, the Sustainable Communities and Climate Protection Act of 2008, is designed to reduce greenhouse gases by encouraging developers to build housing close to public transportation.

Advocates might argue both approaches are needed — more revenue to build and fix roads, fewer cars on the roads to reduce wear and tear on the asphalt.

But duel efforts to raise taxes and limit driving could make for disgruntled drivers and angry voters.

Courtesy Sen. Kevin de León’s office

As many as 7,000 low-income Los Angeles residents could eventually take part in a state-funded electric car sharing program that rolled out last week.

State and city officials celebrated the soft launch of the endeavor — which aims to improve air quality by cutting carbon emissions — at an L.A. affordable housing complex.

City officials hope to establish as many as 100 vehicles as part of the pilot program, which the state is partially funding through a $1.6 million award. The city expects to use an additional $8 million “in in-kind city resources and private operator investment in equipment and operations,” according to L.A.’s  Sustainable City plan.

The state money comes from California’s controversial cap-and-trade program, designed to curb the state’s reliance on fossil fuels. Critics call it a pollution tax that unfairly burdens large industries.

State Senate leader Kevin de León speaks at roll out of electric car sharing program in L.A.
Photo courtesy de León’s office.

“Fighting smog and climate change so that our kids can breathe clean air requires more transportation options that don’t rely on dirty fossil fuels,” state Senate leader Kevin de León, D-Los Angeles, said in a press release. “This electric car-sharing pilot project offers a glimpse of the future, and represents the type of shift in policy, infrastructure, and behavior that we need.”

Officials say the project will educate residents about car sharing and transportation alternatives, install electric vehicle charging stations and introduce an electric car sharing fleet.

Specifically, it will “provide affordable last mile/first mile solutions for low-income families and other residents who do not own a car or need a second car for trips requiring a light duty passenger vehicle,” according to L.A.’s  Sustainable City plan.

“Our EV car sharing pilot is a perfect example of how our state’s cap-and-trade dollars should be put to work: providing transportation options for Angelenos in need, and helping us achieve our clean air goals outlined in my Sustainable City plan,” Los Angeles Mayor Eric Garcetti added in the news release.

The program is formally called the Car Sharing and Mobility Options in Disadvantaged Communities Pilot Project. It is run by the California Air Resources Board, and originated last year after the Legislature and Gov. Jerry Brown signed two of de León bills, SB1275 and SB535, according to the Senate leader’s office. Those laws direct CARB to invest the state’s cap-and-trade revenue into programs that bring clean air and jobs to communities heavily impacted by climate change and poor environmental quality.

Contact reporter Chris Nichols at chris@calwatchdog.com or on Twitter @ChrisTheJourno