California Continues to Struggle with Transportation and Infrastructure

California is the laboratory for all progressive initiatives, and they are getting expensive and unrealistic when it comes to transportation and infrastructure.

June 3, 2024

By: Bobby Casey, Managing Director GWP

Around sixteen years ago, California pushed through a high-speed lite rail system initiative. It would run between Los Angeles and San Francisco. The proposed cost was $33 Billion, three quarters of which would come from federal funds and private investment.

That’s where they started. Here’s where they are:

California has some of the highest taxes in the union and struggles to find funds to crack down on crime or mitigate the economic burdens on businesses and individuals through any reduction in taxes or regulations. Instead, it hiked the fast-food minimum wage to $20 per hour, leading to the loss of approximately 9,500 fast food jobs. It miraculously found the resources, however, to clean up San Francisco in preparation for a visit from Chinese President Xi Jinping, and also found $ $50 million in some effort toward preserving wild salmon$ .

In 2018, California voted for a fuel tax hike. Whether that was intentional or not, we’ll never know. But the language of the initiative Proposition 6 was confusing. You would have to vote YES for NO new taxes; but it looked like a YES vote was yes to new taxes, and a NO was a no to new taxes.

It didn’t pass, and Californians had an opportunity to eliminate a $0.12 per gallon fuel tax, but didn’t in part because of the wording of the initiative.

Fast-forward to May 2024, and you see:

California is poised to make a significant change to its gas tax policy — potentially raising the price of diesel by an average of $0.47 per gallon and gasoline by an average of $0.37 per gallon.

The crazy part is, this article goes on to say this is hardly sufficient. In fact, the taxes should be higher:

These taxes would attach as part of the Low Carbon Fuel Standard (LCFS) which is aimed at addressing environmental impacts of fuel consumption. To make a meaningful change, they likely need to be more than ten times that figure.

This advocacy comes from the fact that fossil fuel consumption is simply untenable! People must be discouraged from their reliance on petrol cars.

I couldn’t tell you what California’s strong suits are, but I can certainly deduce what they are not, and transportation and infrastructure clearly are not California’s strong suits.

California plans to ban the sale of gasoline fueled cars by 2035. That’s just over ten years from now. They currently have a shortfall in fuel taxes to maintain the roads because electric cars don’t pay fuel taxes, and hybrids pay less fuel taxes than their petrol only counterparts.

Here’s the thing: Electric cars are about 50% heavier than traditional cars, and they put a lot more wear and tear on the roads too:

Heavier electric vehicles cause damage to roads, bridges and parking garages and some can easily plow through highway safety guardrails while posing a greater danger to gasoline-powered cars, pedestrians and bicyclists in crashes.

In January, a group of engineers writing for Structure Magazine warned that construction industries must begin adapting the nation’s infrastructure to support an increase in heavier electric vehicles.

So what is California doing?

Why, it’s testing a mileage tax of course!

HOW do they plan to get the mileage and assess the tax? They can hook up a tracking device to their car or submit odometer reads to the California Department of Transportation.

The one thing the fuel tax had going for it was that it was paid at the point of sale based on consumption. Contrast that with income tax, which is based on what is reported, or property tax is which is based on appraisals. Like a sales tax, it’s a fixed percentage of the sale and it is collected at the point of sale.

If you have to report the mileage off the odometer, it’s now subject to evasion. Don’t get me wrong, I’m not bothered by the prospect of anyone dodging road usage taxes. But it is a point of vulnerability. They won’t capture unregistered cars. They won’t capture tourists and interlopers. They will only capture residents.

They are basing their three tiered test on current expenses to keep California roads maintained. That will come at a swift premium with the enhancements needed for those roads to accommodate the weight of the EV fleets that will ultimately canvas the state.

The worst of it is, the math they did to estimate the lite rail system is the same math they are using to estimate whether their grid can support a zero emissions initiative by 2035. CalMatters reports:

Despite expecting 12.5 million electric cars by 2035, California officials insist that the grid can provide enough electricity. But that’s based on multiple assumptions — including building solar and wind at almost five times the pace of the past decade — that may not be realistic.

Reform California overshot the estimated deadline by ten years and still is worried:

New study finds that California’s electric grid will not be able to support a costly all-electric vehicle mandate by 2045. Reform California warns that continuing with the reckless mandate will cause blackouts and a massive spike in utility rates and cost-of-living.

California has taken the sunk cost fallacy and made it the sunk cost delusion.