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Fact check/California's state budget and transportation infrastructure spending

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Fact check: California's state budget and transportation infrastructure spending

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The state flag of California

April 24, 2017
By Sara Reynolds

California Governor Jerry Brown, a Democrat, has called for tens of billions of dollars to overhaul the state’s dams, highways and other infrastructure, noting that California has $187 billion in unmet infrastructure needs.[1] Responding to Brown’s call for additional funding, Republican Assemblyman Vince Fong (District 34) claimed, "Our general fund budget has grown by $36 billion over the last six years and zero has gone to infrastructure."[2]

Is Fong correct? Has the general fund budget increased by $36 billion, and did none of the increase go toward infrastructure?

Fong is correct that the general fund budget grew by $36 billion between fiscal years (FY) 2012 and 2017.[3][4]

Fong's staff told Ballotpedia that he was referring only to transportation infrastructure. By that measure, Fong is technically correct.[5] Transportation infrastructure spending from the general fund fell from $83.4 million in FY 2012 to zero in FY 2017. However, only one percent of transportation infrastructure spending came from the general fund in that period. Federal funds made up 47 percent of transportation infrastructure spending, and special funds and bond funds made up 53 percent. Taking these budgetary sources into account, total funding for transportation infrastructure decreased 24 percent between FY 2012 and 2017.[6][7][8][9]

Background

Assemblyman Vince Fong is the Republican Whip of the California State Assembly and serves as vice chair of the Transportation Committee.[10][11]

California’s state government operates on an annual budget.[12] Between fiscal years 2012 and 2017, California's general fund budget increased by $36.4 billion, from $86.4 billion to $122.8 billion. On average, the general fund made up 45 percent of the total budget each year. The balance of the total budget is composed of federal funds (36 percent, on average), special funds (17 percent, on average), and bond funds (2 percent, on average).[4]

The California Legislature passed Senate Bill 1 (SB 1), an infrastructure bill, on April 6.[13] If signed by the governor, SB 1 will increase existing taxes and fees, such as gas and diesel fuel excise taxes and vehicle license fees, to raise about $52.4 billion over 10 years in new transportation revenues, and directs the funding to deferred maintenance on state highways and local roads.[14]

Fong voted against SB 1 and has proposed an alternative bill, AB 496. AB 496 would allocate all current transportation revenue for road maintenance and traffic congestion relief. It is currently in committee.[13][15]

Capital outlay funding

According to the California Department of Finance, “capital outlays” make up the majority of infrastructure spending, and are drawn from a variety of revenue sources. (A minimal amount of infrastructure spending is accounted for in other budget categories.)[16][17] From FY 2012 to 2017, the general fund was the source of five percent of all capital outlay spending. Among the other budget sources, federal funds made up 49 percent of capital outlays, followed by bond funds (34 percent) and special funds (12 percent).[4][18][19][20]

Between FY 2012 and 2017, capital outlays from the general fund rose from $26.5 million to $1.2 billion. Special funds decreased by 38 percent (from $662.2 million to $409 million); bond funds decreased by 29 percent (from $1.6 billion to $1.1 billion), and federal funds decreased by 19 percent (from $2.3 billion to $1.9 billion).[4][21]

The 2017 budget includes a $1 billion capital outlay transfer from the general fund to the State Project Infrastructure Fund to improve state office buildings in Sacramento.[22] It was the first of two planned transfers for the same project, with $300 million more to follow in 2018.[23]


Transportation infrastructure funding

Transportation funding comes from the general fund, special funds, bond funds, and federal funds. Transportation infrastructure funding in California is designated as either "capital outlay projects" or "capital outlay support." Projects refer to right-of-way acquisition and construction, and support refers to project planning, development and site preparation.[7]

General fund spending made up one percent of all transportation infrastructure spending between FY 2012 and 2017. Federal funds made up 47 percent of total transportation infrastructure spending and increased approximately two percent. Special funds and bond funds made up 53 percent, and fell 43 percent. Total transportation capital outlay funding decreased 24 percent between FY 2012 and 2017.[6][7][8][9]

From 2012 to 2016, all transportation capital outlays from the general fund were transfers to the Transportation Deferred Investment Fund, which receives loan repayments for funding suspended in 2003.[24][25][26][7][8][9] There were no general fund transportation capital outlays budgeted for FY 2017.[7]


Conclusion

Democratic Gov. Jerry Brown has called for additional infrastructure funding. Republican Assemblyman Vince Fong responded, "Our general fund budget has grown by $36 billion over the last six years and zero has gone to infrastructure."[2]

Fong is correct that the general fund budget grew $36 billion between fiscal years 2012 and 2017.[4] Fong's staff told Ballotpedia that his claim referred to the lack of transportation infrastructure funding. In that regard, he was also correct. Transportation infrastructure spending from the general fund fell from $83 million to zero between FY 2012 and 2017. However, general fund spending made up just one percent of all transportation infrastructure spending in that period. Federal funds made up 47 percent of transportation infrastructure spending, and special funds and bond funds made up 53 percent. Taking these sources into account, total funding for transportation infrastructure decreased 24 percent during this period.[7][8][9]

See also

Sources and Notes

  1. ↑ Office of Governor Edmund G. Brown Jr., "Governor Brown Takes Action to Bolster Dam Safety and Repair Transportation and Water Infrastructure," February 24, 2017
  2. ↑ 2.0 2.1 Wall Street Journal, "California Governor Calls for Billions of Dollars to Upgrade Infrastructure," February 24, 2017
  3. ↑ California's budget documents refer to fiscal years as "2011-12," "2012-13," "2013-14," "2014-15," "2015-16," and "2016-17." Ballotpedia will refer to fiscal years by the last number in the pair, i.e. FY 2012 for 2011-12.
  4. ↑ 4.0 4.1 4.2 4.3 4.4 California Department of Finance, "Chart F, Expenditures by Character, All Funds," January 2017
  5. ↑ Sara Reynolds, "Email communication with Sam Chung, Chief of Staff, Office of Assemblyman Vince Fong," March 10, 2017
  6. ↑ 6.0 6.1 General fund capital outlay expenditures are matched as revenue for the Transportation Deferred Investment Fund. As a result, net transportation infrastructure funding is the sum of federal funds, special funds, and bond funds.
  7. ↑ 7.0 7.1 7.2 7.3 7.4 7.5 The California Department of Finance, "Transportation, 2016-17," accessed March 16, 2017
  8. ↑ 8.0 8.1 8.2 8.3 The California Department of Finance, "Transportation, 2014-15," accessed March 16, 2017
  9. ↑ 9.0 9.1 9.2 9.3 The California Department of Finance, "Transportation, 2013-14," accessed March 16, 2017
  10. ↑ BakersfieldNow, "Freshman lawmaker Fong named chief Republican whip in Assembly," December 7, 2016
  11. ↑ California State Assembly, Committee on Transportation, "Welcome to the Committee on Transportation," accessed April 11, 2017
  12. ↑ Ballotpedia, "California state budget and finances," accessed March 1, 2017
  13. ↑ 13.0 13.1 California Legislative Information, "SB-1 Transportation funding: Votes," accessed April 6, 2017
  14. ↑ California Legislative Information, "SB-1 Transportation funding: Bill Analysis," accessed April 7, 2017
  15. ↑ California Legislative Information, "AB-496 Transportation funding," accessed April 6, 2017
  16. ↑ Other capital outlay spending includes infrastructure improvements for "levees, state parks, universities, community colleges, prisons, state hospitals, and other state facilities." The California Department of Finance, "California State Budget 2016-17," accessed April 21, 2017
  17. ↑ Sara Reynolds, "Phone communication with Chris Lief, Assistant Program Budget Manager, California Department of Finance," March 9, 2017
  18. ↑ Special funds include revenues from taxes, licenses, or fees, such as motor vehicle fees, and whose allocation is restricted by law to certain activities. See footnotes 20 and 21 for more information.
  19. ↑ The California Department of Finance, "Finance Glossary of Accounting and Budgeting Terms," accessed April 18, 2017
  20. ↑ The California Department of Finance, 2017-2018 Governor's Budget: Revenue Estimates," accessed April 18, 2017
  21. ↑ Capital outlay funds are funds "to acquire land, plan and construct new buildings, expand or modify existing buildings, and/or purchase equipment related to such construction." California Department of Finance, "2017-18 Governor's Budget Summary," January 10, 2017 (pg. Appendix 72)
  22. ↑ The California Department of Finance, "2016-17 State Budget," June 30, 2016
  23. ↑ Sara Reynolds, "Email communication with Andrew Duffy, Capital Outlay Finance Budget Analyst, California Department of Finance," March 17, 2017
  24. ↑ In 2003, the state partially suspended an $868 million revenue transfer from the general fund to the Transportation Investment Fund, instead creating the Transportation Deferred Investment Fund. California state law required annual repayment transfers (plus interest) from the general fund to the Transportation Deferred Investment Fund until June 30, 2016. See footnotes 25 and 26 fore more information.
  25. ↑ California State Board of Equalization, "Chapter 9. Disposition of Proceeds, Section 7105," accessed March 16, 2017
  26. ↑ The California Department of Finance: Manual of State Funds Index, "Transportation Deferred Investment Fund," accessed April 18, 2017
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