Date: January 05, 2006 5:14 PM
To: COG Directors
From: Rusty Selix
Re: Governor’s Infrastructure Proposal
Governor Schwarzenegger in his state of the state tonight will announce a major infrastructure proposal. Will Kempton of Caltrans briefed key transportation interests on some of the details from 3-4 PM today, for the purpose of preparing us for possible calls from the press and others tonight and tomorrow. While the information was to be embargoed until 5 PM the press was given a packet of information earlier today which contained the specific list of projects with $$ amounts. That information will be publicly available on the Caltrans website tomorrow.
For those who missed the briefing the two biggest new direct frunding measures are:
- Two $6 Billion Bond Measures for Transportation in June 06 and November 08 and
- A Constitutional Amendment to Permanently Protect Prop 42 funds
In addition to these measures valued at $25 Billion there are $80 Billion in additional transportation benefits projected over the next 10 years representing $105 Billion for transportation out of a $225 Billion Infrastructure package. (NO details were included on the other infrastructure elements but we know that schools and flood protection are part of the package and that housing is not.)
The $12 Billion in bonds would include $5.6 Billion for "highway projects" currently included in Regional Transportation Plans. $1 Billion is for Highway 99 improvements others were not specified in the briefing. They would not be listed in legislation a la the TCRP but instead would be nominated by the administration and adopted by the CTC in a process similar to the ITIP. In fact all projects are for ITIP eligible purposes.
Other pieces of the transportation bonds include:
- $200 million for ITS/technology
- $500 million for intercity rail - including some funds for security and safety
- $1 Billion for Air Quality and other Port Impacts - subject to a 50% local match
- $3 Billion for trade corridors and goos movement - subject to an 80% local match
- $1.5 Billion for the SHOPP
Passage of the bonds would be tied to enactment of Design sequencing, design build and public private partnership legislation.
The $12 Billion in bonds for transportation would be the first of a series of Bond measures totalling $68 Billion over 10 years.
The $80 Billion in transportation benefits and funding beyond the bond and Prop 42 protection would come from several sources such as:
- savings from the design build and design sequencing authority
- toll lanes and other projects funded through the public private partnerships
- increased federal funds
- local sales tax measures
- Revenue Bonds backed by Gas Tax revenues to be issued in 2015-16
These bond measures also presume that the High Speed Rail Bond would not go forward in 2006.
The briefing did not address the 2006-07 state budget which will come out on Tuesday. We have been led to believe that the budget will include full Prop 42 funding, advances in payback of loans to the General Fund and possibly payment to cities and counties for local streets and roads whose Prop 42 shares for two years would otherwise be suspended based upon having received those funds in years when it had been suspended.
In order for a bond measure to go on the June 2006 ballot the legislature will have to approve it by sometime in March by a 2/3 vote. Senator Perata has an alternative proposal - SB 1024 ( just amended) and Speaker Nunez has introduced AB 1783 which outlines his bond priorities. We will summarize these and provide more details as they become available.
In any event the Governor should be commended for making infrastrustructure a central feature of his policy agenda and state of the address. As best we can control this is the first time in decades a Governor has prioritized infrastructure (with transportation as half of the total and the first elements for the bond package.)
It seems almost certain that there will be major bond measures on transportation and related infrastructure this year as well as a Constitutional Amendment to Protect Proposition 42 (either through the Legislature or Initiative and either in June or November.)
It is also certain that there will be a flurry of activity over the next two months and we will be very involved in working out the details.