State Spending Plan
July 12, 2017

The 2017-18 Budget

California Spending Plan

(Preliminary)

Transportation


The spending plan provides $19.4 billion from all fund sources for transportation programs. As show in Figure 24, this is a net increase of $2.9 billion, or 17 percent, when compared to the revised level of spending in 2016-17. This largely reflects increased spending resulting from the transportation funding package contained in Chapter 5 of 2017 (SB 1, Beall), as we discuss below.

Figure 24

Transportation Program Expendituresa

(Dollars in Millions)

Program/Department

2015-16

2016-17

2017-18

Change From 2016-17

Amount

Percent

Department of Transportation

$9,493

$9,637

$11,936

$2,299

24%

California Highway Patrol

2,338

2,398

2,485

87

4

Shared revenues (local streets/roads)

1,422

1,343

1,835

493

37

Department of Motor Vehicles

1,128

1,080

1,106

26

2

High-Speed Rail Authority

1,111

1,171

1,096

-75

-6

State Transit Assistance

486

383

674

290

76

Other transportation programsb

110

582

313

-269

-46

Totals

$16,088

$16,594

$19,444

$2,850

17%

aIncludes state General Fund, state special funds, state bond funds, federal funds, and reimbursements.

bIncludes California State Transportation Agency, California Transportation Commission, and Board of Pilot Commissioners.

2017 Transportation Funding Package. In April, the Legislature enacted SB 1 to increase state funding for California’s transportation system. The legislation increases existing fuel taxes and creates two new vehicle charges to support existing and new transportation programs. It also repays monies loaned in the past to the General Fund from various transportation accounts. As reflected in the spending plan, the legislation is expected to provide $2.8 billion from the new revenues and loan repayments in 2017-18 as follows:

  • $846 million for state highway maintenance and rehabilitation.
  • $646 million for local streets and roads.
  • $635 million for transit.
  • $450 million for congested and trade corridors.
  • $100 million for bicycle and pedestrian projects.
  • $71 million for state parks ($54 million) and agricultural programs ($17 million) from fuel tax revenues from off-highway vehicles.
  • $66 million for other transportation-related programs—such as local planning grants, freeway service patrols, and university transportation research.

In conjunction with SB 1, the Legislature passed separate legislation to amend the 2016-17 budget to provide an additional $927 million from various existing fund sources for specific transportation projects located in Riverside County and certain parts of the Central Valley. The budget assumes expenditures of $112 million in 2017-18, with the balance occurring in future years. (Please see our recent report Overview of the 2017 Transportation Funding Package for more detailed information regarding SB 1.)

Caltrans

The budget plan for the California Department of Transportation (Caltrans) includes total expenditures of $11.9 billion from all fund sources, an increase of $2.3 billion (or 24 percent) from the revised 2016-17 level of expenditures. The increase from 2016-17 to 2017-18 primarily reflects the new funding provided from SB 1.

Senate Bill 1 Implementation. The budget provides Caltrans with a $1.9 billion increase from various fund sources related to SB 1 implementation. This includes $905 million for local assistance and $593 million for capital projects. It also includes $421 million and 48 positions for maintenance, $17 million and 75 positions for project initiation documents, and $1 million and 8 positions for administration. (All the positions are redirected from baseline reductions to the capital outlay support program, which we discuss further below.) In addition, the budget funds the new Office of Audits and Investigations established in SB 1 by redirecting 48 positions from an existing Caltrans audit unit and providing ten new permanent positions, resulting in a net budget augmentation of $715,000. Budget trailer legislation also makes a few minor modifications to SB 1, such as changing the definition of a zero-emission vehicle.

Capital Outlay Support. The budget makes two adjustments related to capital outlay support. First, it makes a $29 million baseline reduction to Caltrans’ capital outlay support program for non-SB 1 workload. This includes an associated reduction in 283 personnel-year equivalents (PYE), including 243 state staff. Second, the budget provides $38 million and 218 PYEs, including 112 state staff, for capital outlay support related to SB 1 workload. The net change is a $9 million increase and a reduction of 65 PYEs, including 131 state staff. (Funding increases while PYEs decrease due to certain cost increases such as for contract staff.) Additionally, budget bill language authorizes (1) Caltrans to reestablish 88 state staff positions abolished in recent years and (2) the Department of Finance (after notification to the Joint Legislative Budget Committee) to increase funding and positions if Caltrans fills at least 400 unfilled capital outlay support positions.

Other Budget Augmentations. The budget also includes a total of $24.5 million in various other funding increases from the State Highway Account. This includes (1) $12 million (one time) to replace information technology infrastructure, (2) $5.5 million (one time) for increased vehicle insurance premiums, (3) $4 million ($2.2 million limited term) to improve cyber security, (4) $2.3 million in reimbursement authority and 14 two-year limited-term positions for legal services provided to the California High Speed Rail Authority, and (5) $737,000 in reappropriated funds to match a federal grant for a study of a pay-at-the-pump road usage charge.

In addition, the budget includes provisional language allowing Caltrans, upon the approval of the Department of Finance and notification to the Joint Legislative Budget Committee, to spend up to $20 million in state funds (with up to $20 million in matching federal funds) on zero-emission vehicle charging stations.

California Highway Patrol (CHP)

The budget provides $2.5 billion to fund CHP operations. This is an increase of $87 million, or about 4 percent—mainly due to increases in funding for capital outlay projects—compared to the revised level of spending in 2016-17. Nearly all of this funding is from the Motor Vehicle Account (MVA), which derives the majority of its revenue from vehicle registration fees and driver license fees.

Field Office Replacement Projects. The budget includes $144 million from the MVA to fund site acquisition for new CHP offices in Humboldt and Quincy, and to construct new offices in El Centro, Hayward, Ventura, and San Bernardino. In addition, the budget provides $500,000 for advanced planning and site selection to replace up to two unspecified CHP offices. This funding is part of the administration’s ongoing plan to replace deficient CHP area offices.

Drug Recognition Expert Training. The budget includes $3 million from the Cannabis Control Fund to be used for training drug recognition experts. For more information on cannabis-related spending, please the “Other Major Provisions” section of this report.

Department of Motor Vehicles

The budget provides $1.1 billion for Department of Motor Vehicles (DMV) operations, about the same amount as in 2016-17. Nearly all of this funding is from the MVA.

Driver License and Identification Card Federal Compliance. The budget provides an increase of $23 million and 218 positions in 2017-18 (and $46.6 million and 550 positions in 2018-19) for the issuance of new driver licenses and identification cards that comply with federal standards for identity verification and security features. Such federally compliant licenses and cards are required to access federal facilities or to provide identification for boarding federally regulated commercial aircraft. Full compliance is expected to be completed over the next six years.

AB 60 Ongoing Workload. Chapter 524 of 2013 (AB 60, Alejo) requires the DMV to accept driver license applications from persons who are unable to submit satisfactory proof of legal presence in the U.S., provided they meet all other application requirements and provide proof of identity and California residency. The budget includes $8.6 million and 91 positions on an ongoing basis for workload from issuing AB 60 licenses. This level is significantly less than the resources initially provided on a temporary basis for AB 60 workload.

Motor Voter Program. The budget provides $7 million ($1.8 million from the General Fund and $5.2 million from the MVA) and ten positions on a one-time basis in 2017-18 to develop and implement an automated electronic application process for new driver’s licenses and identification cards. These funds would also be used to implement recent legislation requiring the electronic submission of specified voter registration information to the Secretary of State that is collected from individuals seeking new or renewed driver’s licenses or identification cards or requesting a change of address. Beginning in 2018-19, the department will receive $3.2 million from the General Fund on an ongoing basis and 14 positions (two of which would be limited to two years).

Field Office Replacement and Renovation Projects. The budget includes $22 million to initiate or continue the replacement and renovation of the Reedley, Oxnard, Inglewood, and San Diego Normal Street DMV field offices. The budget also includes $300,000 to plan for up to three future renovation projects, as well as $4 million for the design and construction of perimeter fencing at nine existing DMV field offices.

Other Transportation Programs

California Transportation Commission (CTC). The budget provides CTC from various special fund sources (1) $1.1 million and four positions for workload related to SB 1, and (2) $395,000 and two positions for workload associated with recent legislative changes to the Active Transportation Program. Additionally, budget trailer legislation authorizes the commission to issue “letters of no prejudice” allowing local agencies to pay upfront for approved Active Transportation Program projects and later be reimbursed by the state.

California State Transportation Agency. The budget provides the California State Transportation Agency with $3.5 million (one time) from the General Fund for a grant to the Contra Costa Transportation Authority for planning, constructing, and operating an expanded autonomous vehicle testing facility.