The 2019‑20 Budget: California Spending Plan

Transportation

• Caltrans
• California Highway Patrol
• Department of Motor Vehicles
• High-Speed Rail Authority

The state spending plan provides $23.5 billion from various fund sources for transportation programs. As shown in Figure 1, this is a net increase of $1.3 billion when compared to the revised level of spending in 2018‑19. The increase is largely the result of changes in the timing of expenditures on highway projects and increases in overall transportation revenues available for capital outlay projects and mass transportation as a result of Chapter 5 of 2017 (SB 1, Beall). The spending plan also includes augmentations for the California Highway Patrol (CHP) and the Department of Motor Vehicles (DMV).

Caltrans

The budget plan includes total expenditures of $14.7 billion from various sources for the California Department of Transportation (Caltrans), an increase of roughly $2 billion (or 16 percent) from the 2018‑19 level of expenditures. This increase reflects additional funding from the continued implementation of SB 1. Specifically, the budget includes a total of about $2 billion in SB 1 funding for highway maintenance and repair, bridge and culvert repairs, enhancements to the state’s corridors, and various other activities.

Capital Outlay Support. The budget includes $1.9 billion and 10,354 full-time equivalent (FTE) staff to deliver highway capital outlay projects through the State Highway Operation and Protection Program and other programs. This is an increase of 35 FTEs from the 2018‑19 level and reflects the continued implementation of SB 1.

Project Initiation Documents (PIDs). The budget includes a total of $85.5 million (State Highway Account) and 429.4 state staff positions—as well as 20 external consultant equivalent positions—to work on roughly 700 PIDs in 2019‑20, with roughly half of them expected to be completed in that year. (A PID is completed during the preparation of the initial plan for a highway capital project and includes the estimated cost and scope of the project, as well as the identification of the transportation problem that is to be addressed and an evaluation of alternatives to address the problem.) The level of PID funding for 2019‑20 is an increase of $4.7 million from the 2018‑19 level and reflects the department’s changing PID workload resulting from the continued implementation of SB 1.

California Highway Patrol

The budget provides $2.5 billion (excludes reimbursements) to fund CHP operations. This is an increase of $103 million, or 4 percent—mainly due to $87 million in increased spending for radio equipment and information technology (IT) infrastructure—compared to the revised level of spending in 2018‑19. 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.

Field Office Replacement Projects. The budget includes a total of $134 million to fund replacement CHP offices. This total includes $731,000 from the MVA for the performance criteria phase in San Bernardino ($445,000), El Centro ($143,000), and Hayward ($143,000). This total also includes $133 million from the Public Buildings Construction Fund for the design-build phase in San Bernardino ($42 million), El Centro ($41.9 million), and Hayward ($48.7 million). Under the budget plan, these three projects will be financed through the Public Buildings Construction Fund, with the financing costs of the bonds being repaid from the MVA over a 25-year period when they are completed (projected for August 2022). The above projects are part of the administration’s plan to replace deficient CHP area offices.

Radio Equipment and IT Infrastructure. The budget provides: (1) $62 million ($44 million General Fund, and $18 million Special Deposit Fund, Asset Forfeiture Accounts) and a three-year extended encumbrance period to replace 3,600 in-car radio communications systems with new modular communications and mobile computer systems; (2) $15 million from the General Fund for multifunction electronic tablets that will allow officers to use a single device to issue citations, complete reports, and perform other administrative functions; and (3) $9.6 million General Fund for the replacement of IT infrastructure with new equipment that will increase data storage capacity, improve system reliability and result in faster data processing speeds.

Regional Property Crime Task Force. The budget includes two-year funding of $5.8 million General Fund for the CHP to convene a regional property crimes task force as required under Chapter 803 of 2018 (AB 1065, Jones-Sawyer). The CHP, in conjunction with the Department of Justice, will work with allied law enforcement agencies toward the reduction of retail crime in California.

Deferred Maintenance. The budget provides one-time funding of $2.5 million General Fund to complete deferred maintenance projects. The funding will allow CHP to complete the highest-priority projects from a list of over 450 pending projects with a total estimated completion cost of $44 million.

Department of Motor Vehicles

The budget provides about $1.4 billion for DMV operations, an increase of $117 million (or 9 percent) from the revised 2018‑19 expenditure level. Nearly all of this funding is from the MVA.

Real ID and DMV Operational Improvements. The 2019‑20 budget includes $260.1 million from the MVA for DMV to process driver licenses and ID cards that comply with federal standards—commonly referred to as “REAL IDs”—and to implement various operational improvements. Specifically, the budget includes: (1) $196 million for REAL ID workload, (2) $17.7 million for customer service improvements (such as implementing a live chat customer service), (3) $29.5 million for operational improvements (such as purchasing self-service terminals), and (4) $17 million for technology improvements. The budget also assumes $18 million in savings to the MVA related to passing on credit card transaction fees to customers rather than having such fees paid by the state. (The budget also assumes $16 million in similar savings to three other transportation special funds.) On net, this results in $242.1 million in additional MVA resources for DMV REAL ID and operational improvement workload. Additionally, the budget authorizes the Director of the Department of Finance to augment the level of funding provided to DMV—following a 30-day notification to the Joint Legislative Budget Committee—in order to further reduce customer wait times at DMV field offices or to prevent these wait times from increasing. Finally, the budget requires DMV to report monthly on key metrics (such as office wait times and any technology outages in field offices), as well as four reports during 2019‑20 on DMV workload or progress in completing certain tasks (such as updated projections of REAL ID workload).

HOV Lane Stickers. The budget provides $3 million from the MVA to implement Chapter 367 of 2018 (SB 957, Lara), which requires DMV issue more than one clean air vehicle decal to specified zero- and low-emissions vehicles to applicants who make 80 percent or less of the statewide median household income. Of this amount, $2 million is to contract with a vendor to verify applicants’ income levels and $1 million is for DMV to administer the program. These amounts are expected to be fully offset by fees charged to applicants.

Field Office Replacement. The budget includes $3 million from the MVA to support various field office replacements and renovations. This amount includes: (1) $1.2 million for the working drawings phase for the replacement of the Reedley Field Office, (2) $1 million for the first year of a new lease associated with relocating the Walnut Creek Field Office, and (3) $795,000 for the working drawings phase for the replacement of the Delano Field Office. Additionally, the budget reflects the reversion of $25 million to the MVA—$15.1 million from suspending the replacement of the Inglewood Field Office and $9.9 million from suspending the installation of security fences around the perimeter of 20 field offices.

Deferred Maintenance. The budget provides one-time funding of $3 million General Fund to complete deferred maintenance projects. DMV currently estimates a deferred maintenance list of 92 projects totaling about $17.7 million. This funding will allow DMV to complete about 18 of its highest-priority projects, with most related to reroofing facilities.

High-Speed Rail Authority

The budget provides an additional $8.9 million from Proposition 1A in 2019‑20 ($8.2 million ongoing) and 45 positions to support the High-Speed Rail Authority (HSRA). This includes (1) $4.5 million and 35 positions to shift certain administrative and contract management responsibilities from consultants to state staff, (2) $2.2 million and five positions to increase HSRA’s IT capacity and transition some IT functions from consultants to state staff, and (3) $2.2 million and five positions to improve HSRA’s IT security program.