Higher Taxes for Roads, or for Union Overstaffing and Overpaying?

California has some of the highest gasoline taxes and transportation fees – including hidden cap and trade costs not accounted for in the taxes and fees – along with the lowest ranked roads in the nation. This year, the majority Democratic Party found new ways to spend the $6 billion to $9 billion in additional tax revenue, passing the largest state budget in California history.

Funding to fix our roads and bridges, however, was woefully inadequate.

Now the majority party has decided that California’s roads are a mess. The governor has called the Legislature into a special session, which has manufactured a sense of urgency. Statistics have been gathered; analyses have been performed; bills to address the problem have been put forward. What is the one common component? The majority wants more of your money to “fix” the situation.

In fact, the “transportation” special session appears to be an exercise designed to pressure legislators into supporting a tax hike on gasoline – even though Californians already pay the nation’s highest taxes.

Raising revenue is one option. However, cutting costs is a better one that should not be passed over. A great place to start is to review the agency charged with care and maintenance of your state’s transportation infrastructure – the California Department of Transportation.

An audit of Caltrans by the California State Auditor found that 62% of the completed projects had costs that “exceeded their respective budgets. ”The California State Auditor found that these overruns “totaled more than $305 million of the $1.4 billion in support cost expenditures for the projects.”

Consider these facts:

1. CA’s gas taxes are the 4th highest in the nation.

According to the American Petroleum Institute, California’s 61-cent-per-gallon gas taxes are the 4th highest in the nation, behind only Pennsylvania, New York and Hawaii. This does not include the recent addition of extra cap-and-trade taxes resulting from bringing fossil fuels under California’s AB 32 law.

2. CA’s gas prices are the nation’s highest.

According to AAA, the current national average price for a gallon of ‘regular’ gasoline is $2.63. California’s current average price is $3.69 per gallon (as of 8/5/15).

3. CA’s gas tax & transportation fees yield $10.6 billion annually.

According to the State of California, Department of Transportation, Division of Budgets, 2014/2015 Fiscal Year estimates, the State brings in at least $10.6 billion in taxes and fees “dedicated to transportation purposes.”

4. Caltrans spends just 20% of that revenue on state road repair & new construction.

Last year, Caltrans spent $1.2 billion in state road maintenance & repair, and $850 million in new construction. Similar amounts are planned for the 2015/2016 CA State budget.

5. Caltrans wastes half a billion $$ annually on extra staffing.

The Legislative Analyst’s Office (LAO) report on the review of the Caltrans’ Capital Outlay Support Program found that the agency is overstaffed by 3,500 positions at a cost of $500 million per year. That’s a half-billion tax dollars – for salaries, health care and pensions for extra staffing – that does nothing to improve our roads.

6. CA’s roads rank near the bottom in every category, including:

– 46th in rural interstate pavement condition
– 49th in urban interstate pavement condition
– 46th in urban interstate congestion

7. Poor road conditions cost Californians $17 billion yearly in vehicle repairs. 

34% of CA’s major roads are rated to be in “poor” condition. Driving on roads in need of repair costs California motorists $17 billion a year in extra vehicle repairs and operating costs – $702.88 per motorist.

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:

Level of Outsourcing by State20150817-UW-Moorlach1

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

Population vs. Budget20150817-UW-Moorlach2

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

Caltrans must become a lean and efficient agency with staff focused on projects and outside consultants utilized when workloads increase. It is much easier to reduce outside contractors than it is to reduce staff. Yet, early retirements are in order, and streamlining must be proven long before taxpayers are asked to contribute more.

During these special legislative sessions bills can be introduced. Consequently, I introduced Senate Bill X1-9, the Responsible Contracting for Caltrans Act. It addresses the glaring flaws at Caltrans.

First, SBX1-9 would prohibit the use of temporary funding sources, such as loan repayments, bond funds and grant funds, to hire permanent staff.

Second, SBX1-9 would increase the share of contract employees in the Caltrans’ COS program by 5 percent annually, beginning in 2016, until a 50/50 ratio of state staff and contract employees is reached in 2023.

Controlling the hiring of permanent staff with limited-term funds and increasing the requirement to contract out are simple, no-nonsense approaches to reining in a department that has lacked forward vision. Who could be opposed to such common sense? You guessed it – the public employee unions – whose primary role is to increase their membership at any cost.

Does California have an infrastructure maintenance deficit? Absolutely. Reducing Caltrans’ bloated size before proposing that California families pay even higher taxes to fix our roads is the right thing to do.

John ‍Moorlach, R-Costa Mesa, represents the 37th state Senate district.

5 replies
  1. Avatar
    Bruce Sawyer says:

    Thank you…thank you…thank you. My senate “representative” is Jim Beale, who is as much an instigator in all of this as is Jerry Brown. The need for a special session to address the “shortfall” is absurd. I have only one thing to say: “High speed rail”.

  2. Avatar
    SkippingDog says:

    Outsourcing is nothing more than a method of funneling public funds into the pockets of political supporters. That’s why it’s so prevalent in states known for high levels of corruption in government, such as Florida.

  3. Avatar
    Michael says:

    So Skipping Dog, they instead funnel money into crony union jobs. The SF Bay Bridge is a prime example of why Caltrans needs to be reformed.

  4. Avatar
    Richard Rider says:

    Soo, Skipping Dog, who do you think builds and repairs California roads? It’s OUTSOURCED! Is that corruption?

    Obviously you’d prefer that a government agency take over the road building and repairs. The obvious agency to do that is the CA DMV, which has done SUCH a good job providing great service to their customers.

  5. Avatar
    Richard Rider says:

    Excellent article. But there’s one BS figure presented here that the Big Spenders tout that doesn’t pass the giggle test. It’s the bogus claim (accepted by all as fact) that the average California driver pays over $700 EXTRA for operating and repair costs annually because of our poorly maintained roads.

    Ask yourself — do YOU pay $700 extra annually for “pot hole” roads? “Extra” is over and above normal costs you’d pay for your car — tires, oil changes, gas, repairs, etc.

    The outfit that does these studies is TRIP — a lobbying group under the guise of a nonprofit. They go around the country telling each region that they have bad roads and need to raise taxes for more spending. From their website:
    “TRIP is sponsored by insurance companies, equipment manufacturers, distributors and suppliers, businesses involved in highway and transit engineering and construction, labor unions, and organizations concerned with an efficient and safe surface transportation network that promotes economic development and quality of life.” In other words, a propaganda operation.

    Don’t get me wrong — we SHOULD have better roads in CA — given what we’ve been paying in taxes — especially our gas tax. But these lobbying groups want MORE spending rather than SMARTER spending. It’s a key difference.

    This bogus figure is from a highway lobbying group that purports to have a study backing this claim. As I said, it doen’t pass the giggle test.

    HINT: No, you don’t. Not even close.

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