ADVOCATING FOR THE INDUSTRY


THE GOVERNOR, AND LIKELY THE LEGISLATURE, will delay and defer many of the appropriations planned for this and coming years until a clearer economic picture is available to them.


Looming Transportation Budget Headwinds Ahead


BY FELIPE FUENTES T


he 2023 legislative session began with Governor Newson releasing his proposed spending plan on


January 10, 2023. During that press con- ference, he announced an anticipated budget shortfall of about $25 billion. In February, the Legislative Analyst’s Office expressed a dour outlook and estimated that revenue would fall by as much as $10 billion below the Governor’s estimates. Yet in March, the federal and state government extended the collec- tion date for taxes until mid-October so that Californians who were impacted by December and January winter storm emergency declarations could have more time to file.


All of this is to say the 2023 budget


picture will come into focus much later than usual.


Different Budgeting Approach Despite the delays in revenue collection and economic circumstances of the state, the budget must be passed by June 15, 2023 and enacted on July 1. Which means that policymakers and the Governor will be budgeting a bit differently than in years past. It must be noted that the so-called


4


CALIFORNIA CONSTRUCTOR MAY/JUNE 2023


deficit this year is measured against the record-breaking 2022 budget year. As a percentage, the deficit may be between 7-11% of the overall $307 billion spent last year. Te state’s last budget crisis during the mortgage meltdown was about 25% of the then-$85 billion budget in 2008, for comparison. Te Governor, and likely the Legis-


lature, will delay and defer many of the appropriations planned for this and coming years until a clearer economic picture is available to them. In fact, the Governor’s solutions to mitigate the anticipated deficit includes specific de- ferrals to the transportation elements of the budget such as: • Reducing by 20% the total augmentations planned for transportation programs from 2021-22 to 2025-26, originally $10.9 billion


• $2.2 billion in net reductions to local transit and active transportation program funding


• Delaying $1.3 billion in funding to a future year


• Save $500 million to the General Fund by backfilling it with funding from the State Highway Account


IIJA to the Rescue Despite the uncertainty in transportation funding, there is help on the way in the form of the federal Infrastructure Invest- ment and Jobs Act (IIJA) funding. California will receive federal infrastructure funding based on formula and competitive grants. Formula is guaranteed funding based on statutory formulas. Based on formula funding alone, the IIJA will bring California an estimated $41.9 billion over five years from federal fiscal year 2022 through federal fiscal year 2026! Grants are awarded through a com-


petitive process. California, because of its size, has been historically successful in this category. As of January 13, 2023, the IIJA has announced that California will gain $18.1 billion in grant, formulaic and competitive funding. Some $14.5 billion of that funding is dedicated to the Department of Trans- portation. And of that Caltrans funding, $7.53 billion was awarded by formula. As a result, the IIJA funding has claimed that 42,308 new jobs will be created in the state.


Rainy Day Funds Te 2023 budget also enjoys additional resiliency measures not enjoyed by prior


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32