June 2017 Newsletter

June 22, 2017
June 2017 Newsletter

 

 

MEET ME

I have scheduled two upcoming community coffees, opportunities to meet me for a face-to-face conversation about any state-related issues that concerns you. Here are details on the coffees:

Friday, June 23; 8:30 a.m. to 10 a.m.
Dolce Bella Chocolate Cafe
5325 Prospect Road, San Jose

& Friday, July 28; 8:30 a.m. to 10 a.m.
Pink Elephant Cafe
475 King Road, San Jose

The individual meetings are on a first-come, first-served basis. Please be aware that your time with me may be limited due to the number of people who wish to speak to me. If you have a problem that involves a state agency, my staff will be accompanying me and they can assist you.

If you are unable to attend the community coffee, you can reach me by email. To learn more about my work follow me on Facebook and Twitter.

 

STATE BUDGET

The 2017-2018 state budget adopted last week by the Legislature focuses on fiscal accountability, invests in working families, our schools, and guarantees all eligible in-state students a place in college. The new budget allows California to address its most pressing issues affecting our communities, regardless of the unpredictability of federal policies emanating from Washington, D.C.

I stand behind this balanced budget because it reflects our values and invests in people and programs that work. Here’s what it does:

  • Education -- The school budget totals $74.5 billion, up $3 billion over the previous year. This increase bring per pupil spending to a record $11,000 annually.
    About $14.5 billion has been set aside for the California State University and University of California systems. The state will add more funding for CSU as it prepares plans to ensure qualified in-state students will be guaranteed acceptance.
     
  • Repairing California’s Aging Transportation Infrastructure -- The budget fast-tracked $2.8 billion from the recently passed transportation finance bill - SB 1- to immediately begin fixing our local and state roads and cut commute times. This investment in the transportation infrastructure will create thousands of jobs and keep the economy rolling.
     
  • Fiscal Accountability -- Advanced payments of $6 billion will be made to the California Public Employees Retirement, an action that saves $11 billion over 20 years in pension costs. The money for the additional payments will be drawn, as a loan, from the existing Surplus Money Investment Fund. The loan will be repaid over a period of years from the state’s rainy day fund.
    In a related action, the Legislature added $1.8 billion to the rainy day fund. The fund will hold a total of $8.5 billion since its inception in 2014 following voters’ approval of Proposition 2.
     
  • Health Services -- The budget shores up the Medi-Cal system, which provides medical care to the state’s most vulnerable people. Over $540 million were added to Medi-Cal’s budget to help keep doctors, dentists, eye care specialists in the system after years of either reduced or stagnant provider reimbursements.
     
  • Working Families – The Legislature took action to increase the numbers of families eligible for the Earned Income Tax Credit, expanding the eligibility by accounting for full-time workers who now paid under the new minimum wage.

 

SENATE BILL 1 REVISITED

Last week, I was invited by the Mineta Transportation Summit to come to the Commonwealth Club to give the keynote address about transportation funding. It was an opportunity to explain how my bill, SB 1, repairs the highways, roads, and bridges. It also provided a chance to dispel misinformation that has been spread by opponents to undermine this important legislation.

Roads are not a governmental frill. They are a necessity. Our highways, streets, and bridges bring us to our families, friends, jobs, hospitals, and shopping centers.

It is a reasonable and responsible policy to maintain roads. First, well maintained roads improve safety. Second, maintaining roads is less expensive than having to rebuild a road system that has been allowed to be damaged beyond repair. Third, an unblemished smooth road adds value to a neighborhood.

Senate Bill 1, passed by a two-thirds vote of the Legislature, adds $5.2 billion annually to California’s road repair budget to whittle down a $58 billion backlog in deferred maintenance on state highways, roads, and bridges. Our cities and counties have a combined $79 billion backlog; they will get half of the new annual road revenue generated by SB 1.

SB 1 ensures that everyone who uses the road will contribute to upkeep.

The bill adjusts the per-gallon gasoline excise tax by 12 cents. It institutes a new $25-$175 transportation improvement fee based on a vehicle’s value; over half of car owners will pay $50 or less. These adjustments will cost the majority of drivers about $10 or less per month.

The per-gallon tax on diesel is adjusted by 20 cents per gallon and sales tax on diesel will increase by 4 percent.

For the first time, the owners of zero-emission vehicles, such as electricity-powered cars, will contribute toward road maintenance through a $100 annual fee.

SB 1 updates the state per-gallon excise tax on gasoline, which has not been raised since 1994. Due to advancement in fuel efficiency, more vehicles are on the roads today but buying less gas than 23 year ago, severely reducing the amount of revenue collected for road maintenance.

In March 1994, California motorists consumed nearly 6.8 million gallons of gas per day compared to about 4.8 million gallons per day in March 2016, a reduction of almost 30 percent. The reduction is further compounded by the fact that half the value of the gas tax is diminished by inflation.

Opponents of SB 1 claimed there was enough money in the general fund or that a bond could have been floated to pay for repairs. The truth is taking out a bond is fiscal heresy. Bonds are used for one-time capital outlay and not to support on-going expenses like maintenance.

Taking money from the general fund would require slashing funding for schools, universities, public safety, health and human services, and prisons. The net effect would be destructive to the state’s economy and state services.

The Legislature and Gov. Brown made the correct decision by adhering to the state’s “user pays’’ funding model.

No SB 1 funds have been diverted. The funds are being spent as defined under the bill and state formulas. State parks are receiving $54 million to repair the roads within them. Also, SB 1 stipulates that $5 million is reserved for workforce training to ready workers for transportation-related jobs that are created by the bill and state budget.

And, let me point out that no SB 1 money is designated for the high-speed rail project. SB 1 is designed to get “fix-it first’’ repairs completed.

SB 1 gives California the path toward repairing its aging infrastructure to keep our economy rolling.