The 2020-21 Spending Plan: Transportation

The 2020-21 Spending Plan: Transportation Translate Our Website This Google ™ translation feature provided on the Legislative Analyst's Office (LAO) website is for informational purposes only. The LAO is unable to guarantee the accuracy of this translation and is therefore not liable for any inaccurate information resulting from the translation application tool. Choose your language: × Skip to main content Home --> Policy Areas Capital Outlay, Infrastructure Criminal Justice Economy and Taxes Education Environment and Natural Resources Health and Human Services Local Government State Budget Condition Transportation Other Government Areas Publications The Budget Propositions and Initiatives Staff Careers About Us Search LAO Contact Brian Brown See More Publications Like This Back to the Top --> Tweet October 5, 2020 The 2020-21 Spending Plan: Transportation Overview Overall Spending Over $26 Billion. The 2020 21 budget provides a total of $26.4 billion for transportation-related programs, including the California Department of Transportation (Caltrans), high-speed rail, local streets and roads (shared revenues), California Highway Patrol (CHP), and Department of Motor Vehicles (DMV). As shown in Figure 1, this total reflects a net increase of $2.9 billion (12 percent) compared to 2019 20 estimated spending levels. Most of this increase is associated with increased spending for Caltrans and the high-speed rail project. These increases are partially offset by reduced spending for State Transit Assistance (STA) and the California State Transportation Agency (CalSTA). (The reduction in CalSTA spending largely reflects how prior-year appropriations are shown in budget documents.) Of the total spending, $18.8 billion (70 percent) is from special funds, particularly various fuel taxes and vehicle-related fees. Figure 1 Transportation Budget Summary (In Millions) 2018 19 Actual 2019 20 Estimated 2020 21 Enacted Change From 2019 20 Amount Percent Department/Program Department of Transportation $11,408 $13,669 $15,489 $1,819 13% High Speed Rail Authority 877 1,100 2,890 1,790 163 Local Streets and Roads 2,538 2,625 2,773 147 6 California Highway Patrol 2,546 2,801 2,698 102 4 Department of Motor Vehicles 1,240 1,409 1,382 27 2 State Transit Assistance 948 935 707 228 24 California State Transportation Agency 346 930 398 531 57 California Transportation Commission 6 9 12 3 29 Board of Pilot Commissioners 3 3 3 — 3 Totals $19,912 $23,480 $26,351 $2,871 12% Fund Source Special funds $13,550 $15,548 $18,779 $3,231 21% Federal funds 4,560 6,477 5,582 895 14 Reimbursements 794 964 1,333 368 38 Bond funds 976 378 641 263 70 General Fund 33 113 16 97 86 Totals $19,912 $23,480 $26,351 $2,871 12% Economy Impacting Transportation Revenues. The current coronavirus disease 2019 (COVID-19) pandemic and resulting economic downturn have significantly impacted state transportation revenues, which, in turn, impact the funding available for certain programs. In particular, reductions in diesel sales tax revenues have reduced funding that supports STA. Gasoline excise taxes are also expected to be lower in 2020 21 than previously predicted. However, Caltrans is able to maintain funding for its programs supported by these revenue sources because it has built up sufficient fund balances. (For more information on how reductions in state transportation revenues are affecting programs, please see our recent report Impact of COVID-19 on State Transportation Revenues .) Caltrans The budget plan includes total expenditures of $15.5 billion from various sources for Caltrans, an increase of roughly $1.8 billion (13 percent) from the 2019 20 estimated spending level. While the COVID-19 pandemic has affected revenues from fuel taxes and vehicle fees that support Caltrans programs, the budget is able to support an overall increase in spending because of statutorily required inflation adjustments to these taxes and fees, as well as the use of revenues that have accumulated in transportation accounts from prior years. These revenues have created sufficient reserves to support projects planned for 2020 21 and future years, thereby allowing the final budget to support roughly the same expenditure levels that were proposed for the department in the Governor s January Budget. For example, the State Highway Account (SHA) is estimated to have a balance of $2.2 billion at the start of 2020 21. In addition, the overall spending increase for Caltrans reflects the timing of when the department expects funding for certain mass transportation projects to be allocated. The total level of spending for Caltrans in 2020 21 supports about 20,800 positions. Capital Outlay Support. The capital outlay support (COS) program at Caltrans provides the staff support necessary to deliver transportation infrastructure projects. The Governor usually submits a proposed request for Caltrans COS staff resources for the coming fiscal year each May. However, the administration did not include a request to adjust the COS program this budget cycle, in part due to uncertainty around how declines in state transportation revenues would affect the number and selection of future projects. For that reason, the budget includes 8,880 full-time equivalent staff, the same number authorized in the previous year. Litter Abatement. The budget includes $31.8 million in 2020 21 (growing to $43.4 million annually beginning in 2024 25) from SHA to augment funding for the Litter Abatement Program to address increased litter on the state highway system. The augmentation will generally be used to contract with the California Department of Corrections and Rehabilitation and local law enforcement agencies to provide roadside litter cleanup crews. Loans and Transfers From Transportation Accounts. The budget includes a $21 million loan from the Local Airport Loan Account to the General Fund and a $32 million transfer from the Traffic Congestion Relief Fund to the General Fund. The enacted budget did not include a May Revision proposal by the Governor to transfer $130.5 million in interest earnings from SHA to the General Fund. High-Speed Rail Authority (HSRA) The budget provides a total of $2.9 billion for HSRA. This includes $2.4 billion from the Greenhouse Gas Reduction Fund (cap-and-trade auction revenues) and $500 million from bonds. Replacement of Contractors With State Employees. The budget includes $16 million on an ongoing basis from Proposition 1A (2008) to support 85 new state staff positions in areas such as information technology (IT), project delivery, and finance. The new state staff positions are expected to replace 103 consultant positions that cost HSRA roughly $34 million annually, thus resulting in nearly $18 million in annual savings. Change to Due Date for HSRA Business Plan. The budget package includes statutory changes that (1) delay the deadline for HSRA to submit its business plan to the Legislature from May 1, 2020 to December 15, 2020 and (2) eliminate the requirement that HSRA provide a project update report to the Legislature on or before March 1, 2021. California Highway Patrol The budget provides $2.7 billion to fund CHP operations. This is a decrease of $102 million, or 4 percent mainly due to the reduction in funding for new area offices compared to the revised level of spending in 2019 20. Nearly all of this funding is from the Motor Vehicle Account (MVA), which derives the majority of its revenue from vehicle registration fees and other driver license fees. Reduced Funding for Capital Outlay Projects. The enacted budget excludes capital outlay funding for several new area offices and other facilities originally proposed in the Governor s January budget. As shown in Figure 2, the administration withdrew a total of $139 million in funding for these projects to reduce immediate cost pressures on the MVA, which has a structural deficit. Figure 2 Withdrawn CHP Capital Outlay Projects (In Millions) Project Phase Amount Santa Fe Springs Area Office replacement DB $44.3 Baldwin Park Area Office replacement DB 43.1 Quincy Replacement Facility DB 37.1 CHPERS replace towers and vaults C 10.2 Humboldt Area Office replacement A, PC 2.1 Gold Run Area Office replacement A 1.4 Statewide planning and site identification — 0.5 Total $138.7 CHPERS = California Highway Patrol Enhanced Radio System. CHP = California Highway Patrol; A = Acquisition; DB = Design Build; C = Construction; and PC = Performance Criteria. Department of Motor Vehicles The budget provides about $1.4 billion for DMV operations, a decrease of $27 million (or 2 percent) from the revised 2019 20 expenditure level. The year-to-year decrease is primarily due to the reduced funding for new field offices. Nearly all of this funding is from the MVA. Motor Voter Workload Resources. The budget provides $6.4 million from the General Fund and 38 positions for continued administration of the Motor Voter program, which requires DMV to electronically provide information related to voter registration for all eligible individuals to the Secretary of State automatically. Specifically, this total includes $4.1 million in ongoing funding for registration operations to address the change of address and renewal by mail workload, quality assurance review, IT support, and program administration and oversight. The total also includes $2.3 million in limited-term funding for legal counsel to oversee compliance of the program, facilities costs, continued IT vendor support, and data center costs. Reduced Funding for New and Improved Field Offices. The enacted budget excludes funding for several capital projects originally proposed in the Governor s January budget. As shown in Figure 3, this includes proposals for replacement and reconfiguration of field offices as well as statewide planning and site identification. In total, the administration withdrew $55 million for these projects to help address the fiscal condition of the MVA. Figure 3 Withdrawn DMV Capital Outlay Projects (In Millions) Project Phase Amount Santa Maria Field Office replacement C $17.4 Reedley Field Office replacement C 17.4 Delano Field Office replacement C 15.3 San Francisco Field Office replacement PC 2.9 Oxnard Field Office reconfiguration WD 1.2 Statewide planning and site identification — 0.5 Total $54.7 DMV = Department of Motor Vehicles; C = Construction; PC = Performance Criteria; and WD = Working Drawings. Reduced Funding for Field Office Swing Spaces. In addition to the withdrawal of funding for capital outlay projects, the enacted budget excludes funding for swing spaces for the Oxnard and Inglewood field offices. In total, the administration withdrew $2 million for these projects in the May Revision to lessen the expenditures of the MVA. Transit Provisions to Assist Transit Operators. The budget includes a few provisions designed to assist transit operators experiencing fiscal and operational challenges due to the COVID-19 pandemic. First, budget trailer legislation includes a hold harmless provision designed to ensure that the share of state allocations to local transit agencies is unchanged for three transit programs for 2020 21 and 2021 22. Specifically, the provision applies to the State Transit Assistance Program, the State of Good Repair Program, and the Low Carbon Transit Operations Program. Second, budget trailer legislation temporarily suspends the financial penalties for noncompliance with certain requirements of the State Transit Assistance Program. Specifically, transit operators are not required to maintain a specified ratio of fare revenues to operating costs for 2019 20 and 2020 21. In addition, transit providers are no longer required to keep hourly operating costs lower than costs in prior years for 2020 21 and 2021 22. Third, budget trailer legislation grants transit agencies greater flexibility on the use of funds received through the State of Good Repair Program. Normally, these funds are restricted to be used for capital expenses. However, for the 2019 20 through 2021 22 fiscal years, transit agencies are allowed to use these funds for any operating or capital expenses to maintain transit service levels. Subscribe | California State Legislature | Online Voter Registration | Privacy Policy | Accessibility Legislative Analyst's Office | The California Legislature's Nonpartisan Fiscal and Policy Advisor 925 L Street, Suite 1000 Sacramento, CA 95814 | (916) 445-4656