25 Apr

How Much Tax Money Do We Need for Mah Roads?

Gas Tax Increase Ahead

How much money do we need to raise yearly for our roads and infrastructure? If you listen to Governor Brown he’ll tell you that we have a $59Billion backlog of Highway Repairs with $71Billion in local repairs needed. That’s why we needed to pass SB1 because the new taxes are slated to raise $52Billion over 10 years.

Of course we have a backlog because the legislature is more interested in waste/fraud such as the Governor’s Legacy Choo-Choo than they are in actual repairs. That has historically been the case and it will continue to be the case. We never prioritize the basic functions of government or the items for which we specifically tax.

Need to repair the Oroville Dam? That can wait a decade or two. Want to give out tax credits so the 1% can buy Teslas? No problem. Priorities, you see.

But getting back to the math of SB1. If we have a $130Billion backlog is that on top of the repairs we ARE doing or is that just everything we haven’t done yet? Because the amount we need to raise varies based upon that answer.

It also matters because before we raise taxes we should really focus on how much money we’re already bringing in as well as where it’s going. If it isn’t going where it’s supposed to we need to change that and fire the people ripping us off. Let’s look at that first point.

Last year Los Angeles voters approved Measure M which is slated to raise $860Million/Year. Orange County’s Measure M took in approximately $300Million last year.

LA Measure M Impacts

In fact according to the California Department of Transportation as of 2014 there are  around 20 Counties that have passed similar measures.

County Sales Tax Increases

That says $3.793Billion for 2014. Los Angeles’ Measure M from 2016 isn’t included in that so that would add an additional $860Million taking the total to cool $4.65Billion.

I’m unsure of these numbers because I find it interesting that the chart says “2 Million” for Orange County when OCTA says (Page 145) we did $60,097,127,000 in commerce last year and .5% of that would be  $300,485,635 with 2014 (the date of this report) at nearly $278Million.

277 > 2.

OCTA CAFR

2014 Shows $277,939,000

It needs to be noted that those numbers are Sales Tax based and not based upon Gas Mileage and therefore didn’t drop with higher fuel efficiency. Also, those totals go to local city & county roads and not Federal or State projects.

But what about the dropping fuel taxes? Doesn’t that eat into our funding which is necessitating these new taxes?

Estimates that I’ve seen say that we’re using approximately 8-10% less in gas than 10 years ago thanks to more fuel efficient vehicles. That decrease has led to a drop in state gas tax revenue of about $200Million/year which is a lot.

However a drop doesn’t mean we aren’t getting enough to do the job the money is intended to do in the first place. If I win $10Million in the lottery and then it turns out that I had to split it and only won $5Million I’d still be able to do the many things I wanted to do with my windfall.

This is government logic though. First they misspend money. Then they enact legislation that decreases their own funding and finally they find other taxes to raise to start the cycle anew.

Seriously California gets between 85-90% (depending on the source) of the $0.18.4/Gallon Federal Excise Tax back from the Feds in the form of grant money (which isn’t bad considering how bad the State bends over Cities/Counties). If that 8-10% drop is true and we’re only using about 14Billion gallons of gas in CA how much are we getting?

Let’s Math.

$0.18/Gallon x 14Billion = $2,520,000,000.

$2,520,000,000 – 15% Fed Finders Fee = $2,142,000,000 per year from the Feds to pay for MAH ROADS.

Then we had Proposition 1B from 2006 which allowed for $19.9Billion in General Obligation Bonds for Infrastructure.

So less fuel is being used therefore we can say $2,142,000,000 x 10 fairly because today is less and therefore the smallest number. Between Prop 1B ($19,900,000,000) and the Federal Fuel Excise Tax ($21,420,000,000) over ten years we’ve blown through $41,320,000,000.

Plus the $2.95 Billion that those counties shown above have been getting each year through their sales tax increases (excluding the taxes that took place after 2006). That’s another $29,520,000,000 locally.

So now we’re up to $70,840,000,000 for Mah Roads since 2006. 70Billion. Seventy Billion! In ten years.

Plus the money we got from the “The American Recovery and Reinvestment Act of 2009”. Plus Plus Plus.

We haven’t even begun talking about the Excise/Sales taxes paid inside California. Or the Vehicle License Fees. Or Diesel Fuel Taxes. Or Weight Fees. Or. Or. Or.

It seems we keep upping the amount of money that we raise for MAH ROADS but never manage to actually, you know, pay to fix them regardless of how much money is out of our pockets and on the table.

How much money do we have to collect before we actually spend it on what we claim we’re going to spend it on?

All of it. Obviously.

23 Apr

Another Great High Speed Rail Train Robbery

Jeff Morales, the Chief Executive Officer for California’s High Speed Rail boondoggle is stepping down this summer. After goosing the taxpayers for about $2Million in Salary/Benefits since 2011 he finally has decided to step down before the High Speed Rail gets anywhere near completed or let alone high speed. From 2011-2015 Mr. Morales made just over $1.5Million in Salary/Benefits so unless he miraculously took a pay-cut in 2016 his total compensation comes near or just over the $2Million mark for 5 years of work. Great unaccountable work if you can get it.

Because he’s stepping down, and the position isn’t being eliminated, we’re going to have to replace him with some other goon who’ll get that fat paycheck. No wonder we keep needing to sell bonds to finance this nonsense boondoggle of 19th Century technology.

In the Press Release announcing Morales’ decision to leave they give some highlights of his tenure. Here’s a partial list with my notes in red:

  1. Injected upwards of $4 billion into California’s economy. Bond Debt with no way to pay for it. This is bad.
  2. Supported thousands of jobs in areas that have suffered chronic unemployment and put almost a thousand tradesmen and women to work. Make work jobs for the low-low price of $4 billion so far…
  3. Engaged well over 300 California small and disadvantaged businesses. What does “engaged” even mean here?
  4. Grown from just over a dozen employees to more than 200 employees. MOAR Bureaucracy! MOAR Make-Work! I’m not sure how that’s a good thing.
  5. Managed three successful procurement bids totaling more than $3 billion in contracts for 119 miles of construction, with each bid coming in hundreds of millions of dollars below engineers’ estimates. They are literally selling the point here that he spent $3 Billion. I could spend $3 Billion better for no money, let alone $500K/year. That’s another bad thing.
  6. Advanced the unprecedented environmental approval of the remaining segments. “Unprecedented”. In California? This stuff can’t be made up. For those who think environmental concerns in CA can EVER be “unprecedented” see: Smelt, Delta.
  7. Secured approval of the “d” plan for expenditure of bond funds, with first bond sales occurring this week. More plaudits for spending money we don’t actually have. He’s getting praised for saddling my kids with debt.
  8. Improved the right of way acquisition process, recovering from early delays. Improved? First of all this is something that should have been figured out BEFORE we started spending money and building Not Really High Speed Rail. Second the word “imrproved” is setting the bar pretty low here isn’t it?

I’d continue but you get the point I hope. This man is being applauded for spending money we don’t have, borrowing more money (bonds) we don’t have and getting things slowly moving on a project that will likely never get completed. Or if it does get completed won’t be used unless the State just bans all other forms of transportation. It seems the only thing High Speed about this project is the speed at which they spend money. I await finding out which HSR-Connected private firm Mr. Morales ends up working for after his departure.

21 Apr

Quid Pro Quo on SB1? Say It Ain’t So

Rumors on the possibly illegal quid pro quo deal to get SB1 passed are heating up with Melissa Melendez, (R) Lake Elsinore, asking the Attorney General to look into the shady dealings. Melendez said the following in a news release:

“I am for working toward a solution and understand the need for compromise, but there is a big difference between compromise and bribery,”

I won’t hold my breath for the (D) Attorney General to look into the (D) Governor’s shading dealings in a State run lock, stock and barrel by (D)s. This is the same Governor who illegally used State workers to survey his private ranch without nary a repercussion because the rules, much like the taxes of SB1, fall squarely on the unconnected folks dont’cha know.

21 Apr

How Much Will SB1 Really Cost Us?

Costs of SB1

I can’t seem to escape the world of SB1 and the new taxes being thrown at drivers for the sake of fixing our broken infrastructure. I’ve read countless pieces on this issue and wasn’t able to really find a breakdown on how much it was going to really cost each driver. The (D)s that voted for it say $7-10/month. The (R)s that voted against it say more. Where’s the truth?

Look no further because I decided to figure it out for myself.

Thinking it over I decided to go as conservative as possible and ignore Governor Brown’s $5.2Billion water-mark. Government projections are almost always lies and you can pretty safely assume that if something is said to cost you “X” it will really cost you “X” plus an arm and a leg. Not to mention dealers fees and CRV.

I warn you that this gets ugly and stupid really quickly so strap in folks. Be warned also that my numbers make little logical sense owing to how conservative I’m setting the baselines. I’m using some of the lowest and yet still sourced numbers I can use without just taking Governor Brown at his word.

To start let us being with the population in my hometown of Fullerton. I’m choosing Fullerton because I live here and it’s a fairly good size town. Now according to the Census Bureau there are 140,847 people who reside in Fullerton. For the sake of our little experiment we’re only going to focus on those who work and drive to/from work because I can find numbers to support that premise. Read More

20 Apr

The Great 2017 CA Gas Tax – Intro

This month, on 06 April 2017 specifically, California’s legislature finally had the temerity to pass much needed legislation in order to pay for our crumbling infrastructure. At last we will be able to have the transportation systems we deserve for the price of a few meager increases in fuel excise taxes, vehicle registration fees and a new $100/year tax on zero emission vehicles (as of 2020).

Those costs are nothing in the scheme of our annual tax bills and certainly an investment in today and tomorrow well worth making. Our esteemed legislators have told us as much countless times lately. The constant crisis of our roads always prompts the clarion call for more cash.

The final vote on SB1, the Great 2017 CA Gas Tax, came down mostly to party line with one (D) Senator & one (D) Assemblyman voting against it and one (R) Senator voting for the bill. The (R), showing his Art of the Deal chops, even managed to get some leniency for his own non-political profession while the (D) simply got himself booted off of his posh committee assignment. Lesson? It pays to fix Mah Roads.

Here in Senate District 29/Assembly District 65 we were smart enough to vote in Josh Newman (D) over Ling Ling Chang (R) & Sharon Quirk-Silva over Young Kim and thus we OC/LA/SB voters helped secure some of this much needed funding.

How much funding will we get? Oh we’ll get to that later as we drill deep into the depths of the Great 2017 CA Gas Tax™.

While it may be technically true that we pay some of the highest fuel related prices in America that is because our roads cost so much more to repair and maintain than any other roads. You can’t sit on the 405/55/91 or any other congested and clogged freeway for hours and not expect the weight of your car to do some damage to the asphalt and somebody needs to repair that damage you created.

With so many businesses abandoning our state instead paying their fair share it was only a matter of time before we had to find a new way to pay for things that cannot be done otherwise. Our state is in a sad state of disrepair and we all know it. Our roads are so bad that even Jamba Juice ran to Texas to escape the pot-holes and we know those health nuts power-walk everywhere.

But why a new gas tax? Because voters won’t let us tax their property any more thanks to Prop13. California relies on our Property Taxes for 25.4% of our General Fund so when that gets capped we have to find new sources of revenue. Our government does a lot of things and they don’t always pan out it’s true. Sure, every $1 in 3 for film subsidies went to productions that would have filmed here anyways but you have to take risks when spending other people’s money. If you need to see a big return in order to pay off huge CalPERS rates you can’t exactly be cautious prudent with taxes.

SB1, much to the dismay of many “taxpayer advocates” is genius and a first-of-its-kind solution to taxing thanks to it being tied to inflation. Everything is delivered via gas-powered vehicles which means that if we increase gas taxes we add to the cost of transporting it. Those added transportation costs then lead to higher costs to the consumers which is actually the definition of inflation:

Definition of inflation
2: a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services

So we create inflation by taxing a major factor of inflation and then we tie the tax to inflation so it increases itself. It’s the Perpetual-Motion-Tax™.