Is Transportation Funding really going the Wrong Way?

RCTC says so. They're correct, but there's a catch.

Transit Talking Points by: Nicholas Ventrone, Community Engagement Director

I was hoping to finally take a break from blogging about the state's fuel tax crisis and how continued diversions have obstructed infrastructure development, but fresh reports keep flowing in. So, I've got to keep the discussion going.

Yesterday, the Riverside County Transportation Commission released this flyer:

RCTC Fact Sheet: Transportation Funding going the Wrong Way

RCTC's fact sheet points out that "California's transportation funding is deteriorating, which means so will Riverside County’s roads and bridges."

A pothole infested road printed on the middle of the flyer shows the consequence of failing to allocate transportation funds from the state treasury to Riverside County's transportation infrastructure. The flyer went on and mentioned this:

California’s reliance on taxing fuel to fund transportation is sending the state—and Riverside County—down the wrong side of the road. Volatile oil prices and growth in efficient vehicles means steep drops in transportation revenue are the new “normal.”

The State Board of Equalization has reduced the state fuel excise tax by 6 cents. The Fuel Tax Swap eliminated the state sales tax on fuel and replaced it with an excise tax that fluctuates annually to collect the same amount of revenue that the sales tax would have collected. Unstable gas prices means unstable transportation funding.

RCTC went on and mentioned that the 6 cent reduction of the fuel excise tax would wipe out $26 million in revenue from the transportation budgets of Riverside County local governments and various projects would be at risk. That would include infrastructure upgrades for the SR-91/SR-71 Interchange, SR-60 Truck Climbing Lanes through the Badlands, Phase II of the French Valley Parkway Interchange in Temecula, and local interchange projects near Indio.

To be fair to RCTC, securing state funds is vital to pay for its projects. If I were handling transportation finances and learned that state revenues via the excise tax were going down, I too would let the public know about it and raise awareness.

But like most of the media reportage I've seen over this topic lately, current statewide gross transportation tax receipts which are clearly on the rise were not mentioned.

So I'm stuck having to deal with talking about the statewide gas tax situation yet again. I apologize if I'm beginning to sound like a broken record.

Gotta Say it again...State Transportation Tax Revenues are Up.

If you read my last few posts on this subject, you know that the state has been collecting at least $6 billion per year in such funding since 2006 with 2014 surpassing $7 billion. Other than a dip in FY2009 because of the recession, revenues are up and have roughly doubled over the past 15 years. Both the state's Legislative Analyst's Office and the Board of Equalization have published charts showing this pattern.

That money is supposed to be going for the repair, maintenance, and upgrades of our highways, bridges, and major transit corridors. RCTC should be able to rely on this as means to pay for the 91 Project without the massive debt and close the I-15 HOT Express Lane gap between Corona and San Diego County. Without the debt, the HOT lanes could financially support free non-transponder carpooling. Likewise, RTA should be able to use state funds and work with RCTC to build out its multi-modal transit center master plans with such funds and link them seamlessly with the planned HOT express lane infrastructure and park & ride lots. That would greatly expand HOV, CommuterLink Express, and future rapid express BRT transit options conservatively.

Numerous ballot measures and court cases show that the public desires such tax revenue to be purposed to the infrastructure, not diverted elsewhere.

RCTC is correct that "transportation funding is going the wrong way." As the state continues to allow the fuel and excise transportation tax accounts to be tapped into and displaced to other areas or overspent, funding resources for RCTC goes down. Thus, funds are "going the wrong way." The county agency has a valid argument against the 6 cent reduction of the statewide fuel excise tax.

But the excise tax reduction is not the root source of the problem. It's funding displacement.

The media in general has not been reporting this situation in its full context with a few exceptions. On February 21, the Sacramento Bee published an op-ed stating the state's fuel tax code needs to be simplified. The writer George Runner who is also a member of the Board of Equalization did not omit the increase in transportation tax revenue receipts in the opinion piece. On February 22, the San Diego Union Tribune also published an honest editorial outlining the fuel tax situation exposing potential dishonesty at the state level.

Here's the main point that the U-T Editorial Board had to say:

The peculiar fact that a state in desperate need of funds for infrastructure repairs is about to cut its gas excise tax is a hangover of a 2010 budget deal engineered by Gov. Arnold Schwarzenegger and the Legislature that defied the clear intent of big majorities of California voters.

The deal sharply reduced the sales and use tax the state charged on gasoline while sharply increasing the excise tax charged per gallon. This was done to get around Proposition 42 and Proposition 1A — ballot measures passed lopsidedly in 2002 and 2006, respectively, to ensure all gasoline sales tax revenue went for road improvements and transportation projects. There are far fewer restrictions on what gas excise taxes are used for, which allowed the Legislature to take $1.8 billion meant for infrastructure upgrades and use it in the 2010-11 operating budget and subsequent spending plans.

A key provision of the deal was that the rate adjustment had to be revenue-neutral, so the Board of Equalization takes a regular look at how much gas tax revenue is being generated and periodically adjusts gas excise taxes up or down. As the U-T reported, some board members think this is a scheme.

We think scam is more appropriate — and that it’s time for Gov. Jerry Brown and the Legislature to undo the 2010 gas-tax swap and to honor the intentions of state voters by devoting a much bigger chunk of gasoline taxes to their intended use of road repairs and transportation projects.

The editorial went on and reported that the $1.8 billion funding displacement from the fuel excise tax receipts was not spent on the infrastructure but re-purposed for salaries, pensions, schools and prisons. So we now have some kind of an idea of where our transportation money is going.

The point is, transportation funding is certainly going the wrong way. But both voters and the courts have made it clear time and time again that such funding shall be allocated to transportation infrastructure, period.

When will the rest of the press and We the People going to hold our elected officials accountable for reflecting our values in our democratic republic?