PHOENIX - Lawmakers in Sacramento are trying to solve a very big and expensive puzzle: how to fund California's huge infrastructure funding gap.
Gov. Jerry Brown called a special legislative session on transportation funding last month in a proclamation that cited $5.7 billion of annual unfunded road infrastructure repair requirements.
Gas taxes, the traditional means of providing road funding, bring in only $2.3 billion a year, according to Brown, a Democrat elected in 2010 and reelected in 2014 after having served two terms in the 1970s.
Assemblyman Jim Frazier, a Sacramento-area Democrat, and Sen. Jim Beall, a Democrat from the San Jose area, are chairing the efforts in their respective chambers.
"The goal is to get a stable, long-term source of funding," said California Department of Transportation spokesman Mark Dinger. "We're not getting the monies that we're used to getting."
The legislature is in recess and will reconvene in mid-August. When it does, it will be grappling with a politically-sensitive issue that Brown has called "bedeviling."
Transportation funding at all levels of government is a struggle for lawmakers who are attempting to balance the need for money to maintain existing roads, bridges, and other infrastructure as well as build new ones with the public's aversion to raising gas taxes and deep political divides over other ways to raise revenue.
Something has to be done, Caltrans' Dinger told The Bond Buyer, because there is no longer a sustainable long-term revenue source that Caltrans can depend on to keep the infrastructure of the most populous state in the condition it should be kept in.
According to a new report out this month by the Washington D.C.-based research group TRIP, several California metro areas are among those with the direst need in the entire country. About 74% of San Francisco/Oakland roads are in "poor" condition, the report found, as were 73% of those in the Los Angeles/Long Beach Santa Ana area.
Of the 25 urban regions with the most roads in poor condition, seven were California cities, the report said.
"Every time this report is issued, California has the most number of urban centers on the list of poor roads in the nation," Matt Cate, executive director of California State Association of Counties, said in a release responding to the report. "The problem is tied directly to the fact that resources for road repair have been shifted and become more scarce. We need to address this problem and find additional and long term funding to begin tackling the billions of dollars in needed repairs. County supervisors are actively involved in the special legislative session this year, in the hopes that we get something done."
States are used to receiving federal funds from the federal Highway Trust Fund, a pool of money derived from the federal gas tax. But that per-gallon tax has not been raised in over 20 years as inflation chipped away at its real purchasing power, and federal lawmakers have been unable to agree on a long-term bill that would replenish or replace it.
Municipalities not only use that federal money to maintain infrastructure directly, but also to back Garvee bonds used for infrastructure projects.
The problem in California received a dramatic emphasis July 19 when a bridge along Interstate 10 in the Southern California desert collapsed amid a sudden rainstorm, virtually shutting down the busy Los Angeles-to-Phoenix corridor and forcing lengthy detours around the road closure. The route has now partially reopened, but industry experts have said the bridge failure already likely had measurable economic impact from the slowdown of trucking and other commerce in the region.
In Sacramento, lawmakers are trying to get something done before the fall recess that begins in mid-September.
A source familiar with the proceedings said that the current situation is "fluid," and no particular plan or legislative package has gathered enough momentum to be considered close to breaking through. The source said that while Republicans and Democrats are unsurprisingly divided about how best to fix the problem, but there is bipartisan agreement that they need to do something more than symbolic.
"I think there's growing consensus that whatever they do has to be pretty significant," the source said.
Democrats have a sizeable majority in both the State Assembly and Senate, but not the two-thirds that would be needed to pass a tax hike on their own.
Beall introduced one measure, SBX1, near the start of the special session in June.
That legislation would create the Road Maintenance and Rehabilitation Program, to be reauthorized by the legislature every five years and funded by various tax increases. It would raise the gas tax by 10 cents per gallon and the diesel tax by 12 cents per gallon, along with some fuel storage tax hikes and increases in the California vehicle registration fee and a $100 annual fee for zero emissions vehicles such as all-electric cars.
Gas tax increases are rarely popular, and while states such as Maryland have raised theirs in recent years the prospect of a federal increase is considered a political third rail.
Californians already pay some of the highest taxes at the pump, according to the American Petroleum Institute, shelling out a total of almost 61 cents per gallon between state, excise, and federal taxes. The national average is about 49 cents per gallon.
The outnumbered Republicans have suggested that about 3,500 jobs could be slashed from Caltrans as one part of a solution, echoing a Legislative Analyst's Office report last year that suggested the agency was much fatter than it had to be.
Caltrans has said it is already running efficiently now and that such cuts would only interfere with the authority's ability to do its job. The state GOP has about seven bills floating around right now, a source said, but it's not clear which is most favored.
Roads are not the only issue at hand. Freight shipping executives were in Sacramento in recent days pushing for California's ports to be made a bigger funding priority. Ports like Oakland and Long Beach are major issuers of bonds as well as major economic engines for their regions, and have begun to fear in recent years that they may lose their economic competitiveness to Canadian or Mexican ports, or to East Coast ports once the Panama Canal is expanded to allow larger ships to pass through it next year.
Lawmakers hope to produce some workable legislation between when it reconvenes in two weeks and the Summer recess that is slated for mid-September, a source said.
