California governor vetoes road bond bill
October 6, 2020
California Gov. Gavin Newsom has thwarted an effort approved by state lawmakers that was intended to fast-track road work.
The Legislature overwhelmingly approved a bill to sell $5 billion in bonds over two years to boost the state’s road work program. Assembly lawmakers approved the bill on a 58-17 vote. The Senate voted 28-10 in favor of the bill, SB1351.
The legislation called for creating a subaccount in the State Highway Operation and Protection Program. The program is used to manage a four-year, $18 billion list of repair and maintenance projects.
A newly created Transportation Improvement Fee would use existing transportation improvement fee revenues to pay for bonds. The funds come from vehicle registration renewals.
Governor rejects plan
Gov. Newsom vetoed the Democratic-led SB1351. The Democratic governor said the bill is unnecessary.
“While I appreciate the Legislature’s intent, the California Department of Transportation has already significantly increased the number of projects going to construction through project savings and other administrative actions and does not need this tool to accelerate transportation maintenance projects,” Newsom said in his veto message.
“Bonding against these future revenues runs counter to the pay-as-you-go principle established by Senate Bill 1 and risks locking California into long-term debt obligation to finance maintenance repairs.”
Senate Bill 1
SB1351 called for paying off borrowing via the vehicle registration fee that is available from a 10-year, $52 billion transportation funding deal. Approved in 2017, Senate Bill 1 included a mix of higher vehicle taxes and vehicles including a 20-cent diesel tax increase.
The three-year-old funding deal is estimated to raise $5.2 billion annually for state and local roads, trade corridors, and public transit.
Moving forward with California road work funding
Advocates said the registration fees that would be used to pay for the bonds would otherwise eventually be allocated for SHOPP projects.
Sen. Jim Beall, D-San Jose, added that SB1351 would allow the state to move forward with road projects at a time that existing funds are below projections. They cite the economic slowdown and fewer miles driven during the pandemic.
Otherwise, projects would need to be deferred until the state is able to recover from lost transportation revenue.
Caltrans would make a list of projects eligible to be accelerated for construction within 90 days of the bill becoming law. Eligible projects must already be approved via SHOPP and have completed environmental clearance and project design.
“SB1351 is an economic stimulus proposal to get people back to work and also expedite the accomplishment of the performance goals set forth in SB1,” Beall said in previous remarks.
At publication time, there was no indication of whether the Legislature will take up SB1351 for a possible veto override. LL