Transportation

Board of Equalization Poised to Reduce Gas Tax by 3.5 Cents

On February 14, the Board of Equalization (BOE) announced that it will consider lowering the state’s gas excise tax rate by 3.5 cents at its February 25 meeting. This would reduce the total gas excise tax rate to 36 cents per gallon, down from the existing 39.5 cent rate. Counties will recall that following the “gas tax swap” of 2010 there are two components to the gas excise tax: the base 18 cent tax, which has not been increased in twenty years; and the gas tax swap portion, which replaced the Proposition 42 sales tax on gasoline. Each year, the Board of Equalization sets the swap excise tax rate at a level that will generate the same amount of revenue that the former sales tax would have raised. The BOE must also look back two years and make adjustments to ensure that the excise rate they set was actually revenue neutral.

As counties recall, the Governor’s budget projected that the excise rate would decrease by 3.1 cents, from 21.5 to 18.4. If consumption estimates remain the same, then the additional 0.4 cent decrease proposed by the BOE will result in even larger decreases in the funding available for local streets and roads under the gas tax swap than projected in January. CSAC staff are working with our partners from the County Engineers Association of California and to better understand the BOE process and determine if there are ways to blunt the impact of the annual rate adjustment process.

Smart State Transportation Initiative CalTrans External Review

Smart State Transportation Initiative (SSTI) conducted an assessment of the performance of the California Department of Transportation (CalTrans) and provided recommendations for improvement. The report is the product of a team assembled by SSTI, which interviewed Caltrans staff and stakeholders and reviewed a wide range of materials from and about the department.

The authors note that the report is quite critical of Caltrans’ management and operations, but acknowledge that nearly all the problems are longstanding and should not be blamed on Caltrans current management. The author’s also note that Caltrans has many strengths, including the dedication of much of its top leadership and most of its staff to serving the public interest and improving their department’s performance. Two key themes of the report are that CalTrans has fallen out of step with current transportation practices and the express aims of California state policy; and the department’s culture hasn’t yet adjusted to the new realities, running on process rather than outcomes.

As previously noted, these issues are often rooted in decisions made long ago. When the CalTrans was first organized, for instance, its primary goal was to build a network of highways connecting cities. After the highway system was built-out, the focus switched from highway building to system operation and maintenance. Other policy changes have impacted the form and function of Caltrans, such as the rise of “self-help” counties (countywide areas with local sales tax measures dedicated to transportation infrastructure improvements) which dictate the modes and projects that benefit from the revenue. The Legislature also empowered regional transportation planning agencies in the 1990s by sub-allocating a significant share of and responsibility for state transportation revenues. Despite these changes, the report’s authors found that the Department is still organized for new capacity and reconstruction, which promotes incompatibility with current state policies promoting sustainability, livability, and a “fix it first” mentality.

California has adopted policies and planning goals that incentivize infill and compact development, promote the efficient use of natural resources, and reduce greenhouse gas (GHG) emissions, particularly from the transportation sector through the integration of transportation and land use planning. The current framework under which CalTrans operates, however, was designed to foster ease of mobility for automobiles. This structure also makes Caltrans ill-equipped to fully consider issues related to economic development, environmental justice, and livability. Furthermore, while sustainability initiatives have developed from other departments or organizations, these efforts have tended to work around CalTrans rather than engaging the department, even when they are focused on transportation.

The report mentions that the use Level of Service (LOS), which focuses on automobile delay, for the analysis of transportation impacts of projects is a barrier to the sort of compact development promoted by state policy directives. In fact, its use may have even induced low-density, high travel, exurban development. This issue is currently the subject of extensive discussion, as the Office of Planning and Research examines alternative to LOS for analyzing traffic impacts of projects as part of its update of the CEQA Guidelines pursuant to SB 743 (Steinberg, 2013).

Finally, the report indicates that systematic and operational issues at CalTrans have been largely ignored, and Caltrans still operates on a project-by-project basis. This focus does not allow the Department to effectively guide investment of revenues, or develop and implement policy. The report notes that CalTrans is not well adapted to a multi-stakeholder environment, and operates in culture of risk aversion and fear, where concerns about liability and other issues lead to inflexibility.

The SSTI’s ten recommendations range from changing CalTrans’ mission, vision, and goals, to a realignment of its resources and skills. CSAC will work with the County Engineers Association of California to review and provide input on the specific details within the recommendations, as well as to monitor any legislative and administrative efforts to implement the report’s recommendations. We will ensure that the CSAC Housing, Land Use and Transportation Policy Committee is informed of any developments.

The full report is available here.