$665 – $855 Million in New Annual Funding for County Roads Possible

On Wednesday, Senator Jim Beall released the details of his transportation funding proposal, which would generate an estimated $3 billion a year for the next five years to help restore California’s crumbling transportation infrastructure at the state and local level. CSAC has been a consistent advocate for additional funding for statewide transportation programs, including local streets and roads, state highways, and multi-modal enhancements. 

The California Statewide Local Streets and Roads Needs Assessment, produced by CSAC, the League of Cities, and California’s regional transportation agencies has quantified the unmet needs for local roads. Over a ten-year period, cities and counties need an additional $7.8 billion in funding to bring the local streets and roads into a good state of repair. 

Senate Bill 16 includes the following provisions:

• Repayment of existing transportation loans, most of which are owed to state transportation programs, in equal installments over three fiscal years, beginning in 2016;
• Returning to transportation programs of a five-year period an increasing percentage of the approximately $1 billion in annual truck weight fees, which are currently being diverted to pay for bond debt service (i.e. 20% returned in the first year, 40% in the second year, and 100% in the fifth year, and future years if reauthorized);
• Increasing the vehicle license fee by 0.07-percent each year for five years to backfill the general fund costs of transportation related bond debt service;
• Increase the gasoline excise tax by 10 cents;
• Increase the diesel excise tax by 12 cents, 2 cents of which will be dedicated to freight mobility improvements through the Trade Corridors Improvement Fund;
• Levy an additional $35 fee on annual vehicle registrations; and
• Levy an additional $100 fee on annual vehicle registrations for zero-emission vehicles.

Revenues from the gas tax increase, 10 cents of the diesel tax increase, and both registration fees would be deposited into a new maintenance and rehabilitation fund. From this account, Senator Beall’s plan would dedicate 5-percent of total revenues generated to a State-Local Partnership Program to incentivize additional local sales tax measures passed after July 1, 2015. The remaining 95-percent of revenues would be shared equally between the state and counties and cities. CSAC estimates that counties would receive approximately $3.5 billion in additional revenue over the five year program. Given the bill’s phased-in approach, it’s expected to raise $665 million for counties in the first year and $855 million in the fifth year of the program. 

Pursuant to longstanding CSAC policy and reaffirmation by the CSAC Executive Committee and Board of Directors, CSAC has offered our strong support to Senator Beall’s proposal for his comprehensive efforts to address short-term transportation funding needs. It meets all of CSAC’s criteria for new sources of revenue, including that it is a statewide approach; it would be distributed equitably between the state and locals and amongst counties; funds would be for maintenance and preservation of the existing roadway system; and it would apply to all users of the system, including zero emissions vehicles that do not currently pay gas taxes at the pump.

CSAC has been working with Senator Beall’s office on the proposal and is now combing through the details of SB 16’s legislative language. At the same time, we understand that there may be a revised transportation funding proposal from the Assembly side in the coming weeks. Recall that Speaker Atkin’s in February announced a proposal that would generate approximately $2 billion per year through a new fee on vehicles. CSAC will continue to keep counties informed as these proposals evolve. We hope you will join us at our Legislative Conference in late May where we will have a focused discussion on transportation funding and encourage counties to meet with their legislative delegations to express the need for additional funding for the local transportation system.