Caltrans Budget Final Cut $1.78 Billion, No Rescue

The dust has settled on the California state budget process so we now know how bad the cuts for Caltrans’s fiscal 2014-15 budget (which started July 1) will be—$1.78 billion or 13.8 percent chopped off—for a total of $11.065 billion as compared with $12.89 billion for last year.

Virtually all of the cuts will come from the project side of the ledger as Governor Brown’s new five-year infrastructure plan kicks in this year with its emphasis on repair and maintenance, rather than new capacity for our highways, bridges and rural roads. (see the details for the infrastructure plan at ).

Despite a call from the state Legislative Analyst’s Office to reduce Caltrans headcount commiserate with its funding (3,500 positions) thus freeing up more money for projects in the future, the new budget includes 19,347 positions, a reduction of approximately 230 positions from 2013-14. All reductions will be handled through attrition.

There will be $1.023 billion appropriated from the last of 2006 transportation bonds and other bonds this year. The state gas tax is expected to generate $3.59 billion and federal highway trust funds are expected to provide $3.5 billion although the Congress has not yet reauthorized the federal highway program. There are some restricted funds coming from the California Air Resources Board’s cap-and-trade money pot, something in the range of $400 million, but the details are obscure.

Positives? – On the plus side, the new budget includes an additional $351 million in “early general fund loan repayments,” which means the state is repaying some of the money It borrowed from the gas tax revenues during the dark days of the Great Recession. The total due to the highway trust fund is estimated at $2.1 billion and the current plan is to repay those funds between now and 2020.

Of the $351 million in this year’s payment, the new funding includes $210 million for the State Highway Operation and Protection Program (SHOPP), which pays for transportation safety projects, pavement repair and preservation work, and upgrades bridges; $27 million for Caltrans maintenance projects; $100 million for city and county transportation work; $9 million for bicycle and pedestrian projects under California’s new Active Transportation Program; and $5 million to “mitigate” environmental effects of proposed transportation improvements.

What didn’t happen? – There was no rescue for the Caltrans budget for this year and things look bad for the next year’s budget, which is expected to drop another billion or two as the remaining 2006 transportation bond funds are exhausted.

Nothing came of the lobbying efforts from industry associations, Transportation California or the California Alliance for Jobs who were first pushing an increase in state car license fees, then for a return of $484 million in truck weight fees, which is currently being diverted from Caltrans’ budget to repay the Transportation Debt Service Fund for the payment of interest on the various bonds.

You can bet that the industry will retool its approach for the remainder of this legislative session, which ends September 30th. If no “gut-and-amend” bills emerge, there will be a new push for funding next January. Support from the federal program should be a known quantity by then as well.