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State Budget Could Be Capped by “Gann Limit,” Preventing New Taxes

California is world-leader in traffic; Caltrans engineers get raises

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.

California's Union Controlled Legislature to Consider Raising Taxes in Special Session

Jerry Brown, who as a candidate for governor in 2010 repeatedly pledged he wouldn’t raise taxes without a popular vote, has called for a special session of the Legislature for the purpose of raising taxes. This despite the fact that general fund revenues have outstripped estimates by almost $6 billion. So now we have the very real possibility of higher gas taxes, higher registration and vehicle license fees with proceeds promised for roads – all without a vote of the people.

That a politician would change his views on adding to the public’s tax burden is hardly a surprise. Those of a certain age will clearly remember presidential candidate George H.W. Bush proclaiming, “Read my lips, no new taxes,” before his later, as president, breaking his pledge.

In his effort to increase the tax burden on motorists, Brown is receiving support from the usual suspects including Democrats in the Legislature who have become the party of the public employee unions favoring more revenue for higher pay, and radical environmentalists for whom the price of fossil fuels can never be high enough. Even some in the business community are signaling that they, too, could support higher levies on California drivers if the result is improved roads. (By now you would think that these otherwise astute political players would realize that Faustian bargains with the tax-hikers always end badly).

The impediment to the grand scheme of those who want ever higher taxes is, of course, Proposition 13 which requires a two-thirds vote of each house of the Legislature. Deprived of their supermajorities in the last election cycle, Democrats would need help from Republicans. So the big question is will the Democrats be able to pick off a handful of Republican votes.

We sure hope not. Not only would this be bad policy but the California Republican Party has, in recent years, made progress in establishing a reputation as the only party to represent average working folks against multi-billion dollar tax increases. And voting for tax hikes as a Republican is a surefire way to end a political career.

Moreover, to their credit, Republicans have proposed credible transportation plans of their own to provide needed funding for road construction and maintenance, but without raising taxes.

Nonetheless, we’re hearing rumors that a couple of Republicans might acquiesce to a tax increase. They should know better as California already ranks second in the nation in gas tax rates, even without counting the hidden carbon tax. The new tax would make the state an outright number one and would add to the already highest gasoline prices.

Expect Republican legislators to be wined and dined and invited to dance by those lobbing for higher taxes. These favor seekers will be wearing their most benign looking sheep costumes but legislative Republicans should be aware that these are actually wolves who, once they have gotten the votes they want, will turn on them without provocation if it suits their interests.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Brown, Unions, Already Discuss Renewing Prop. 30 Taxes Beyond 2018

Once again it is time for taxpayers to get a good grip on their wallets because Sacramento politicians are looking to extend the “temporary” taxes imposed by Proposition 30, approved by voters less than two years ago.

There is nothing more permanent than a temporary tax. They are as immortal as a vampire and nearly as hard to kill. Take the “temporary” tax imposed in 1898 to pay for the Spanish-American War. It remained on the books until 2006 when Congress discovered that the Spanish-American War ended a century earlier.

More recently and more relevant to Californians, two decades ago the political establishment — both Republicans and Democrats — backed a 1¼% increase in the state sales tax, a half cent of which was supposed to be temporary. (The tax increase was justified, in part, on the argument that the higher taxes were less pernicious than deficit spending. But this tax package just institutionalized even greater spending and debt.) At the time, to quell opposition, Sacramento politicians went out of their way to draw public attention to the temporary nature of the half cent increase. But within a year of its expiring, it was reinstated and made permanent through a ballot measure whose passage backers claimed was absolutely essential to maintain local public safety services.

In 2012, Gov. Jerry Brown and his government employee union allies backing Proposition 30 promised the tax increases would be temporary, that the sales tax increase would expire in 2016 and the income tax increase on upper-middle income earners, and above, would expire in 2018. But the politicians, who have been lying in the weeds waiting until closer to the expiration date to spring an extension of the tax increases on unwary taxpayers, are already tipping their hand.

In January, state schools chief Tom Torlakson called for an extension of Proposition 30 beyond its full expiration in 2018. “We need to renew Prop. 30,” the Superintendent of Public Instruction told a meeting of PTA leaders.

Now state Sen. Mark Leno has spoken up, telling an education rally at San Francisco City Hall it’s time to start thinking about the need to extend the Proposition 30 tax increases. One of the reasons Leno opposes the governor’s effort to establish a prudent budget reserve is that such a “rainy day fund” would make it harder to justify a continuation of higher taxes on sales and incomes.

While it is common to question the veracity of politicians, in this case, it would be wise to accept these Sacramento leaders’ comments as genuine expressions of their greed for ever greater amounts of taxpayer dollars

Gov. Brown, to his credit, has urged majority Democrats in the Legislature to make due with current revenues and keep faith with the voters by letting the taxes expire on schedule. But even this responsible approach, a reflection of his minimalist approach in his first two terms, may not help taxpayers much as we approach 2018, the year, that even if he is reelected, Brown will end his final term.

Meanwhile, the Sacramento politicians are salivating over the prospect of new and extended taxes. “Shoot for the moon,” Sen. Leno told a reporter. “We might not get there, but that’s where we have to start.”

However, Leno and his colleagues are not shooting for the moon, they are shooting for taxpayers’ wallets.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.