A Road Map for California’s Transportation Funding Package
The Legislative Analyst’s Office (LAO), the California Legislature’s nonpartisan fiscal and policy advisor, has published its analysis of the Transportation Funding Package in the Governor’s 2017-2018 budget.
The report notes that, “California has a large and complex network of transportation systems that currently face several challenges. These challenges include aging highways, aging local roads and transit systems, increased traffic congestion, increased demand for transportation alternatives, and increased goods movement.” And cautions that, “There is widespread concern that current funding levels for transportation programs are insufficient to fully address these challenges.”
The budget’s transportation funding package is estimated to generate an annual average increase in transportation funding of $4.2 billion over the next ten years — from a mix of revenue sources including a new $65 vehicle registration tax, increases to gasoline and diesel excise taxes, cap-and-trade auction revenues, and the early repayment of certain transportation loans. Under the proposal, revenues would be distributed through a complex series of formulas that partially address a mix of transportation challenges.
To assist the Legislature in its deliberations on a transportation package, the report includes the LAO Road Map for Developing a Transportation Package — a road map to addressing five key issues that merit legislative consideration:
1) Determine Which Specific Challenges to Address. LAO recommends that the Legislature first determine the level of shared funding for cities and counties and then make the Highway Maintenance Program its highest priority for the state’s share of new funds.
2) Determine the Overall Funding Level Needed. The LAO analysis provides the Legislature with three different scenarios to illustrate what level of funding would likely be needed to meet different sets of priorities.
3) Determine Revenue Sources. LAO recommends that the Legislature consider: charging users of transportation systems; a mix of sources; stability of sources; and distinguishing between temporary and permanent sources.
4) Simplify the Funding Distribution Model. In considering how funds are distributed, LAO recommends adopting an approach that is more simplified than that proposed by the Governor in order to allow for future growth across all priorities.
5) Determine Administration of New Programs and Establish Accountability Measures. The Legislature should determine how new programs are administered and establish accountability measures. LAO makes several recommendations on these issues, including recommending that the Legislature require the California Transportation Commission to perform project-level oversight of the State Highway Operation and Protection Program (SHOPP) by thoroughly reviewing the proposed cost, scope, and schedule of all SHOPP projects, and allocating all funding for SHOPP projects.
Source: The Orange County Breeze