California’s Infrastructure Crisis

1. California’s Infrastructure Crisis February 5, 2012

2. Statewide Transportation System Needs Assessment 2011 • “California’s transportation system is in jeopardy. Underfunding – decade after decade – has led to the decay of one of the State’s greatest assets.” • - California Transportation Commission 2011

3. Neglected Improvements are Staggering • California’s unfunded • needs are • - California Transportation Commission • Statewide Transportation Needs Assessment 2011 $295B through 2021.

4. Caltrans Maintenance Needs are Growing • - Legislative Analyst’s Office, 2011

5. Infrastructure Report Card • CALIFORNIA • Pavement: • 58% of California Roadways Require Rehabilitation or Pavement Maintenance • Bridges: • 20% Require Major Maintenance or Preventative Work • 6% Require Complete Replacement - Statewide Transportation Needs Assessment 2011

6. Infrastructure Report Card • CALIFORNIA • 6 of the Nation’s 10 Worst Urban Area Pavement Conditions • 14 of the Nation’s 20 Most Congested Transportation Corridors • 66% of California’s Major Urban Highways are Congested - Texas Transportation Institute

7. Poor Road Conditions • Cost Californian’s $13.9B Annually • $586 Per Motorist • Contribute to More Than • One-Half of US Highway • Fatalities: • More than Drunk Driving, Speeding or Failing to use Seat Belts • - TRIP 7

8. Population will Grow from 38MM to 44MM by 2020 VMT is growing 10 times faster than lane miles. - Governor’s 2006 Strategic Growth Plan Truck freight is expected to increase 75% by 2035. - Statewide Transportation Needs Assessment 2011

9. Funding Will Collapse in 2013

10. Jobs • Each $1B Invested in Transportation Creates approximately 30,000 Jobs (15,000 Direct and Indirect Transportation Jobs & 15,000 Induced Jobs) • The Construction Industry is Reporting 20-40% Unemployment - Federal Highway Administration

11. Commerce at Risk - US Chamber Foundation Study • - Statewide Transportation Needs Assessment 2011 • 84% of U.S. Economy Dependent on Transportation Infrastructure • Fully Funding Transportation Needs Would Increase California’s Gross State Product 5% – 7%

12. Funding Solutions • Encourage Public-Private Transportation Investment • Reinstate Vehicle License Fee • Annual Increase of Fuel User Fee • Harvest Cap & Trade Fees • Institute a Tire User Fee • Institute VMT Fee

13. Public-PrivateTransportationInvestment

14. Public-Private Transportation Investment Public-Private Investment • Encourage Privatization of Transportation Systems, when applicable • Support Appropriate Revenue Generation (Tolls or Other Mechanisms) to Attract Private Transportation Investment 14

15. Public-Private Transportation Investment Recommendation • Transportation California Recommends: • Adopting Legislation Necessary to Attract Private Transportation Investment • California’s Goal Should be to Attract $1B of Private Investment into Transportation Infrastructure Annually 15

16. Vehicle License Fee (VLF)

17. Vehicle License Fee (VLF) Recommendation • Transportation California recommends: • Increase Vehicle License Fee to • Pre-2006 Rate Schedule • 2% of Vehicle Value (currently .64%) • 1.36% of the Taxable Value of California’s Vehicles Raises approx. $3.7B Annually 17

18. Solutions Fuel User Fee

19. Fuel User Fee Fuel User Fee Increase Will… • Promote Innovation • Decrease Dependency on Foreign Oil • Improve Air Quality • Fund a Modern Transportation System • Create Jobs 19

20. Fuel User Fee Fuel User Fee Most Practical Funding Solution Simple & Fair Easily Administrated In Concert with Sound Energy Policy Surprisingly Inexpensive

21. Fuel User Fee Fuel User Fees Too Low Fuel User Fees are Green! • California - 55¢ Per Gallon • Fees Cover Only 50% of Road Maintenance & Operations- Building America’s Future Transportation Infrastructure Report 2011 • Canada & Europe – $4.43 Per Gallon (Average)

22. Fuel User Fee Each 1¢ Fuel User Fee Costs the Average Driver $5.54 Per Year Raises $200MM Annually

23. Fuel User Fee Recommendation • Transportation California recommends: • A Regular Annual Fuel User Fee Increase of 8¢ Per Gallon • 8¢ per Gallon Raises approx. $1.6B Annually 23

24. Harvest Cap & Trade Fees

25. Cap & Trade Fees Cap & Trade Fees • California will Begin Collecting Fees Associated with Fossil Fuel-Related Air Pollution in 2012 • Re-investing Cap & Trade Fees into California’s Transportation System will: • Improve Air Quality • Reduce Emissions • Serve the Goals of Cap and Trade Policy 25

26. Cap & Trade Fees Recommendation • Transportation California recommends: • Cap & Trade Fees Collected from Transportation-Related Pollution be Directed to the Maintenance of California’s Transportation System • Cap & Trade Fees Could Raise $2B Annually 26

27. Tire User Fee

28. Tire User Fee Recommendation • California Consumes approx. 35MM Tires Annually • Transportation California Recommends: • A $10 Per Tire User Fee be Assessed • A $10 Per Tire Fee Raises approx. $350MM Annually 28

29. Vehicle Miles Traveled (VMT)Fee

30. Vehicle Miles Traveled (VMT) Fee Recommendation • Californian’s Travel approx. 350B Miles Each Year • Transportation California Recommends: • A 1¢ Per Mile VMT Fee • 1¢ Per Mile VMT Fee Raises $3.5B Annually 30

31. Funding Solutions Raise Annually $1B equals 30,000 Jobs • Encourage Public-Private $1.0B Transportation Investment • Reinstate Vehicle License Fee $3.7B • Annual Increase of Fuel User Fee $1.6B • Harvest Cap & Trade Fees $2.0B • Institute a Tire User Fee $.35B • Institute VMT Fee $3.5B

32. Infrastructure investment will energize economic performance!