State Budget Good for Transportation
Governor Brown’s 2012-13 budget proposes significant structural change for transportation and guarantees funding availability and new projects
For years the Associated General Contractors of California (AGC) has advocated that infrastructure spending has been inadequate to allow for growth and business in the state. AGC fully supports investment in California’s transportation programs as a necessity for the construction industry. Governor Jerry Brown’s budget released Thursday contained welcomed news for transportation as it proposes a significant structural change to transportation agencies, funding during budget deadlines, and continuation of Proposition 1B projects.
“We applaud the Governor for his proposal and effort to protect transportation programs,” said Associated General Contractors chief executive officer Tom Holsman. “It appears the governor is moving in the right direction in putting California on a path to recovery.”
As part of a major reorganization effort to streamline and consolidate state agencies, the governor has proposed moving non-transportation departments within the Business, Transportation & Housing Agency (BTH) to other existing state cabinet agencies, leaving a standalone Transportation Agency, which would include Caltrans, DMV, CHP, the Board of Pilot Commissioners, and the California High-Speed Rail Authority. This will allow transportation policy to be developed and implemented at the cabinet level. The next step will be for the Governor to appoint a permanent Secretary of Transportation and Director of Caltrans.
Another important change for transportation is the Governor’s proposal to eliminate the annual “hold” on highway funds under a late budget, which threaten work stoppage on projects funded through the state highway account. This proposal would permit Highway Users Tax Account (HUTA) funds to flow in the event of a late budget and specifies that highway funds may be used for limited, short-term transfers/borrowing to ensure that either cash flow is there for transportation programs or on occasion, to provide cash flow back up to the general fund. This proposal is consistent with the intent of Proposition 22.
The budget also continues the state’s commitment to completing Proposition 1B. The budget proposes $2.8 billion in a combination of earlier appropriated funds and new funds to continue ongoing construction and implementation of projects.
“AGC took several leadership roles in securing Proposition 1B bonds, and has even sponsored legislation to accomplish these goals in previous legislative sessions,” said Holsman. “The Governor’s support on these items is welcomed.” There are many other issues contained in the proposed state budget which will be reported on in the coming weeks.