Calif. Sen. Jim Beall, author of the $3 billion housing bond bill.
California State Sen. Jim Beall said he is trying to put together a transportation bill that can pass, with a Nov. 30 deadline looming.

LOS ANGELES – The looming deadline to conclude California's special session on transportation funding could provide an opening for legislation before new lawmakers take their seats next month.

The special legislative session Gov. Jerry Brown called more than a year ago ends Nov. 30, and local government lobbyists and state lawmakers are optimistic that the chance to put more money into California's badly-underfunded roads may now be at hand.

Kiana Valentine, legislative representative for the California State Association of Counties, said she and CSAC are optimistic that the legislature will act before the deadline. Valentine said the situation appears "dire" if lawmakers can't get together on a funding package soon, but added that she believes all the major pieces are in place for legislation to receive the two-thirds supermajority vote that California's constitution requires for tax increases.

Valentine said what materializes could be similar to a proposal floated in August by Sen. Jim Beall, a San Jose Democrat, and Assemblyman Jim Frazier, D-Oakley. The two men are the special session chairs in their respective chambers.

Beall and Frazier said their package would generate $7.4 billion annually for transportation, with $2.5 billion going directly to cities and counties.

It would raise the money through a combination of a 17-cent-per-gallon increase to the gasoline excise tax, a 30-cent-per-gallon increase to the diesel excise tax, and a zero-emission-vehicle registration fee of $165 per year starting in the second year.

The bill also contains a provision that would index all fees and taxes, including current gas taxes, for inflation every three years. Their proposal also features some measures that Republicans opposing previous Democratic efforts to increase taxes have asked for in the past, including steps designed to improve accountability in spending and a constitutional amendment that would prohibit the use of transportation revenues for non-transportation spending.

"We know the sorts of the reforms that are bipartisan common sense solutions," Valentine said. "I think it should be a mixture of things we've seen on the table."

Michael Coleman, a policy advisor to the League of California cities, said that he believes the lingering question is whether supporters can secure the last handful of votes needed to shepherd a bill to Brown's desk.

"There's sort of widespread consensus about the basic elements," Coleman said, explaining that the real question at this point is the size and balance of revenue measures in the eventual final deal.

"There are a lot of little moving parts," said Coleman.

The issue of how much to tax and from where has been a thorny issue for some Republicans, who although badly outnumbered in both chambers have still loudly protested some of the tax proposals.

Orange County Republican Sen. John Moorlach, for example, has repeatedly criticized proposed gas tax increases in particular and remained critical of the Beall/Frazier package announced in August. Moorlach has said that Californians already pay enormous gas taxes, among the nation's highest, and shouldn't be forced to pay even more.

Valentine said that the final package would not necessarily have to contain a gas tax increase, although that would be a likely source of funding because of that revenue stream's historical importance to funding roads.

"We would be supportive of a package that includes a gas tax increase," she said.

Coleman pointed out that this period of time could be particularly opportune is because the Nov. 8 general election has now passed, giving lawmakers finished with campaigning a chance to do something.

California does not traditionally have a lame-duck session, but the ongoing special session makes one possible before lawmakers are sworn into the new legislative session Dec. 5.

While the transportation special session could be extended and lawmakers could also act during the regular legislative session, that would likely mean a further delay because new legislators would have to be brought up to speed on the proposals in play and their votes for a bill secured.

"The feeling is there is an opportunity," Coleman said.

Beall told The Bond Buyer in a statement that he has been working to cobble together a two-thirds supermajority support, emphasizing that rushing something out for a vote before the special session ends won't accomplish anything if the support isn't there.

"A transportation infrastructure funding solution requires a two-thirds majority," Beall said. "I have been in numerous discussions with colleagues, listening to their concerns and replying to their questions. Everyone knows there is a deadline. But the reality is we must bring forth a bill that can pass. I'm working hard to accomplish that."

The national transportation research organization TRIP said in August that poorly-maintained roads and bridges cost California motorists a total of $53.6 billion per year in vehicle maintenance and delays, and the 2016 California Statewide Local Streets and Roads Needs Assessment Report released last month estimated that the state needs another about $7 billion annually to bring its streets up to par: a potential 10-year funding gap of more than $70 billion.

Beall also pointed to President-elect Donald Trump's past statements on infrastructure development as a consideration for California's legislation. Trump campaigned in part on an ambitious infrastructure development platform that would use tax credits to support $1 trillion in infrastructure improvements over 10 years. But while Trump's plan would use a generous tax credit to leverage private investment, how his proposal would work alongside traditional bond finance remains unclear, as is how much direct federal spending the New York billionaire would support.

"With President-elect Trump's statements on increased federal infrastructure investments, it is incumbent on California to pass a transportation bill to match federal funding that might be available," said Beall.

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