LAO Analysis of the 1997-98 Budget Bill
Transportation Overview

    1. Spending by Major Program
    2. Major Budget Changes

Major Issues


1996 STIP Funding and Expenditures Balanced, But Toll Bridge Seismic Retrofit Needs Funding Solution Prospects Good for 1998 STIP, But Threats Loom More Proposed Staff for Capital Outlay Support Engineering Actions Necessary to Balance Motor Vehicle Account Transfer of Intercity Rail Service Under Negotiation



State expenditures for transportation programs are proposed to be somewhat higher in 1997-98 than in the current year. The increase is due mainly to proposed higher expenditures for the seismic retrofit of state highways and bridges.

For traffic enforcement, the budget proposes increases in the expenditures of both the California Highway Patrol and the Department of Motor Vehicles. The expenditure increases are primarily to accommodate workload related to the implementation of various new statutes.

The budget proposes total state expenditures of about $5.3 billion for transportation programs in 1997-98. This is an increase of $390.4 million, or 7.9 percent, over estimated expenditures in the current year.

Figure 1 shows that state-funded transportation expenditures increased by $1.7 billion since 1990-91, representing an average annual increase of 5.8 percent. When adjusted for inflation, these expenditures increased by an average of 3.4 percent annually. This increase is largely the result of the passage of the Transportation Blueprint legislation in 1990 which provided additional state funds for highway and mass transportation programs. In addition, in March 1996, voters passed Proposition 192, authorizing $2 billion in bonds for seismic retrofit of highways and bridges, including state-owned toll bridges.

Figure 1 also shows that transportation expenditures have increased slightly as a share of total state expenditures over the period. In 1997-98, proposed transportation expenditures will constitute about 8.2 percent of all state expenditures. Of the 1997-98 state transportation expenditures, about $4.1 billion is proposed for programs administered by the state, and about $1 billion is for subventions to local governments for streets and roads. Another $213 million will be for debt-service payments on rail bonds issued under Propositions 108 and 116 of 1990, and on seismic retrofit bonds to be issued under Proposition 192 of 1996.

Spending by Major Program

Figure 2 shows spending for the major transportation programs in detail. Specifically, the budget proposes expenditures of $5.8 billion (from all fund sources) for the Department of Transportation in 1997-98--an increase of $703 million (14 percent) above estimated current-year expenditures. The higher expenditure level reflects mainly an increase of about $464 million in Proposition 192 expenditures for seismic retrofit of highways and bridges, and an increase of about $248 million in State Highway Account expenditures for other highway transportation activities.

Spending for the California Highway Patrol (CHP) is proposed to increase in 1997-98 by $59 million, about 7.4 percent. A large portion of the increase will be funded from the Motor Vehicle Account (MVA) with the remainder of the increase being funded from other sources. In particular, the budget proposes to shift the funding of CHP's Commercial Vehicle Inspection program from the MVA to the State Highway Account (SHA). This will increase the SHA support of CHP by about $33 million in 1997-98.

For the Department of Motor Vehicles (DMV), the budget proposes expenditures of $564 million, about 5.3 percent more than in the current year. The increase will be funded with a combination of MVA revenues and revenues from motor vehicle license fees.

Additionally, the budget proposes an increase in the State Transportation Assistance (STA) program in 1997-98 from $76 million to $84.8 million. This increase reflects higher projected revenues into the Transportation Planning and Development (TP&D) Account. The STA program provides funds to local transportation agencies to operate public mass transit systems. Annual funding of the program is determined based on a statutory formula, and the level varies depending on anticipated revenues into the TP&D Account.
Figure 2
Transportation Budget Summary

Selected Funding Sources

1995-96 Through 1997-98

(Dollars in Millions)





Proposed 1997-98
Change From


Amount Percent
Department of Transportation
State funds $2,043.2 $2,846.6 $3,622.4 $775.8 27.3%
Federal funds 2,061.4 1,808.8 1,765.4 -43.4 -2.4
Reimbursements 542.8 498.1 468.6 -29.5 -5.9
Totals $4,647.4 $5,153.5 $5,856.4 $702.9 13.6%
California Highway Patrol
Motor Vehicle Account $660.9 $702.6 $726.3 $23.7 3.4%
Other 83.8 89.4 124.7 35.3 39.5
Totals $744.7 $792.0 $851.0 $59.0 7.4%
Department of Motor Vehicles
Motor Vehicle Account $329.5 $308.0 $311.4 $3.4 1.1%
Motor Vehicle License

Fee Account

166.8 172.7 192.1 19.4 11.2
Other 19.6 54.7 60.5 5.8 10.6
Totals $515.9 $535.4 $564.0 $28.6 5.3%
State Transportation Assistance
Transportation Planning and
Development Account $71.0 $76.1 $84.8 $8.7 11.4%

Major Budget Changes

Figure 3 highlights the major changes proposed for 1997-98 in various transportation programs.

As the figure shows, the budget proposes to increase highway capital outlay expenditures in the Department of Transportation by about $457 million over the current-year estimated level. The increase will be mainly in seismic retrofit of highways and bridges. The budget also proposes an increase of $69 million for 539 personnel-year-equivalents of additional engineering and design staff support. Additionally, the budget includes an increase of $7.6 million to accommodate increased highway maintenance workload, and $18.7 million to cover various price increases in the operation of the department.

The budget also proposes $9.2 million in additional support for the state's intercity rail service. The additional amount is requested to maintain existing service levels and to extend the San Joaquin rail service from Stockton to Sacramento.

For CHP, the budget proposes an increase of $4.3 million in order to cover the full-year cost of traffic officers added in the current year, and to upgrade 28 officer positions to sergeant positions in order to strengthen supervisory control. The budget also requests an additional $5.6 million for telecommunication equipment and services.

As a result of Chapter 1042, Statutes of 1996 (AB 1683, Conroy), CHP will regulate commercial motor carriers jointly with DMV in 1997-98. This regulatory program was previously under the Public Utilities Commission (PUC). As Figure 3 shows, the CHP is proposing $1.4 million for this activity in 1997-98. The budget also proposes to expand various reimbursed activities in CHP, including freeway service patrol and 9-1-1 service in the budget year. At the same time, due to termination of the California Motorcyclist Safety Program and the Hazardous Waste Transport Vehicle and Container Inspection and Certification Program, the budget proposes to reduce CHP support by $1.6 million to reflect a reduction in corresponding workload.

For DMV, the budget requests $19 million for 562.4 personnel-years of staff to accommodate anticipated workload resulting from Chapter 1126, Statutes of 1996 (AB 650, Speier) which requires proof of automobile insurance as a condition for vehicle registration. The budget also requests $8.1 million for DMV to regulate commercial motor carriers, as the program is transferred from PUC.

In addition, the budget requests $5.1 million for DMV to continue its efforts in redesigning the department's business practices and database in 1997-98, as well as to pay for additional computer programming workload.
Figure 3
Transportation Programs

Proposed Major Changes for 1997-98

All Fundsa

Department of


Requested: $5.8 billion
Increase: $702.9 million (+13.6%)
+$456.7 million for highway capital improvement, primarily seismic retrofit
+$69 million in engineering and design staff support
+$18.7 million to offset price increases
+$14 million to maintain traffic management centers
+$9.2 million to support intercity rail service
+$7.6 million for increased highway maintenance workload
California Highway Patrol Requested: $851 million
Increase: $59 million (+7.4%)
+$5.6 million for telecommunications equipment
+$4.3 million for the full-year cost of traffic officers and to strengthen supervisory control
+$3.8 million for reimbursed services
+$1.4 million to regulate commercial trucking

-$1.6 million from termination of inspection of hazardous waste transport vehicles and California Motorcyclist Safety Program
Department of Motor Vehicles Requested: $564 million
Increase: $28.6 million (+5.3%)
+$19 million for 562.4 personnel-years to implement legislation requiring proof of insurance for vehicle registration
+$8.1 million to regulate commercial trucking
+$5.1 million for database conversion, computer programming, and to redesign business practices
a Includes expenditures from bond funds

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