The 2021-22 California Spending Plan

Transportation

Overview

The 2021‑22 budget provides a total of $31.7 billion for transportation-related programs, including the California Department of Transportation (Caltrans), California State Transportation Agency (CalSTA), local streets and roads (shared revenues), California Highway Patrol (CHP), Department of Motor Vehicles (DMV), and High-Speed Rail Authority (HSRA). As shown in Figure 1, this total reflects a net increase of $5.2 billion (20 percent) compared to 2020‑21 estimated spending levels. Most of this increase is associated with a number of General Fund augmentations provided in the budget. These increases are partially offset by reduced spending for HSRA. (The reduction in HSRA spending largely reflects how balances from prior-year appropriations are shown in budget documents, rather than actual reduction in projected expenditures.)

Of the total spending, $18.6 billion (59 percent) is from special funds, particularly various fuel taxes and vehicle-related fees. The budget act includes $5 billion from the General Fund for transportation programs. Of this amount, $3.3 billion was budgeted for various CalSTA ($2.5 billion) and Caltrans ($800 million) programs on the condition that subsequent legislation be enacted by October 10, 2021 to allocate these funds. Given that no such legislation was enacted by this date, the $3.3 billion will revert to the General Fund as required in the budget act. The budget for CalSTA also provides $280 million from the General Fund not subject to reversion to support improved truck, rail, and safety infrastructure at the Port of Oakland. (The budget for CalSTA also includes $408 million from various funds for zero-emission transit and rail equipment purchases and infrastructure, as part of the Zero-Emission Vehicles Package, which is described in more detail in the “Natural Resources and Environmental Protection” spending plan post.)

In addition to the totals cited in Figure 1, the budget provides one-time General Fund appropriations totaling over $100 million for a number of specified local transportation projects, such as to implement pedestrian and safety enhancements.

Caltrans

The budget includes $17.3 billion from various sources for Caltrans, an increase of $3.7 billion (27 percent) from the revised 2020‑21 spending level. The augmentation is largely related to (1) increased state funding for litter abatement and beautification projects and (2) additional state and federal funds primarily for highway rehabilitation projects. Notably, the budget for Caltrans includes $800 million from the General Fund for the Active Transportation Program and climate change adaption projects. However, as discussed above, these funds will revert to the General Fund because subsequent legislation was not enacted to allocate the funds by October 10, as required in provisional language.

Clean California. The budget provides $475 million from the General Fund in 2021‑22 for the Clean California Initiative. The initiative also includes an additional $475 million in 2022‑23 and $146 million in 2023‑24, for a total of $1.1 billion over a three-year period. The total amount consists of the following: (1) $418 million over three years to augment Caltrans litter abatement efforts; (2) $287 million over two years for state beautification projects on the state highway system; (3) $296 million over two years for a grant program that supports local beautification and cleanup projects on streets and roads, tribal lands, parks, transit centers, and other public spaces; (4) $33 million over two years for a public education campaign to reduce litter; and (5) $62 million over three years for the staff needed to support the initiative.

Increased Federal Funding. The budget includes $968 million in additional federal funds for 2021‑22—mainly from the Coronavirus Response and Relief Supplemental Appropriations Act. Of this amount, $547 million is for state transportation projects, with $486 million for highway rehabilitation projects through the State Highway Operation and Protection Program (SHOPP) and $61 million for state selected capacity projects (highways and intercity passenger rail) through the State Transportation Improvement Program. The remaining $421 million will be allocated to local transportation planning agencies for local streets and roads, transit, and other projects.

Accrued Interest From State Transportation Accounts. The budget provides an additional $316 million in 2021‑22 ($747 million in total from 2022‑23 to 2027‑28) by allocating accrued interest from several state transportation accounts. The amount provided will be used to support state highway rehabilitation projects through SHOPP.

Capital Outlay Support. The budget includes a net increase of $104.7 million and 548 full-time equivalent staff for the Capital Outlay Support Program, which provides the staff support necessary to deliver transportation infrastructure projects, such as engineering and design, environmental analysis, right-of-way acquisition support, and construction administration and oversight. The augmentation reflects an increase in workload associated with projects funded through Chapter 5 of 2017 (SB 1, Beall), which increased fuel taxes and vehicle fees to support transportation projects.

Hazardous Material Removal at Encampments. The budget plan provides $20.6 million annually in 2021‑22 and 2022‑23 from the State Highway Account to support the department’s maintenance program in removing hazardous waste from the state highway system—particularly at homeless encampment sites.

General Transit Feed Specification and Support. The budget includes $7.2 million of federal funds from the Coronavirus Aid, Relief, and Economic Security Act for small and rural transit agencies to expand the use of contactless payment services for transit riders. Specifically, Caltrans will implement a statewide procurement process that transit agencies can access to purchase contactless payment systems and equipment. Implementing these systems is intended to improve transit agencies’ ability to provide real time transit information to customers, as well as make it easier for customers to pay transit fares by credit and debit cards, smartphones, and other devices.

California Highway Patrol

The budget provides $2.8 billion to fund CHP, an increase of $346 million (14 percent) compared to 2020‑21 revised spending estimates. The increase mainly is due to short-term employee compensation reductions enacted in 2020‑21 and several one-time capital outlay expenditures in 2021‑22. Nearly all of the funding for CHP is from the Motor Vehicle Account (MVA), which derives the majority of its revenue from vehicle registration fees and other driver license fees.

Various Equipment Upgrades. The budget includes $14.2 million from the MVA for the ongoing maintenance and operation of the Wire less In-Car Camera System, including ongoing funding for 12 previously approved positions. The budget also provides $8.6 million from the MVA to replace portable radios and accessories that have exceeded the life expectancy, are out of warranty, and unserviceable.

Facilities Projects. As shown in Figure 2, the budget includes a total of $167.4 million from the General Fund to design and construct several new area offices and other facilities, as well as for deferred maintenance of existing facilities. Although CHP capital outlay projects are historically funded by the MVA, due to the MVA fund condition and the available surplus in the General Fund, the Legislature approved these projects to be funded with General Fund as proposed by the Governor.

Department of Motor Vehicles

The budget provides about $1.6 billion for DMV, an increase of $288 million (or 21 percent) from the revised 2020‑21 expenditure level. The year-to-year increase is primarily due to temporary employee compensation reductions enacted in 2020‑21 and several limited-term expenditures from the General Fund in 2021‑22, as described more below. Nearly all of DMV’s ongoing funding is from the MVA.

Extension of REAL ID Resources and Operational Improvements. The 2021‑22 budget includes $186.3 million from the General Fund as well as 1,616 positions to continue processing driver licenses and ID cards that comply with federal standards—commonly referred to as “REAL IDs”—and to implement various operational improvements. This level of funding is similar to the amount provided for these purposes on a limited-term basis in prior years. Specifically, the budget includes $161.9 million (decreasing to $58.5 million in 2023‑24) and 1,358 temporary positions (decreasing to 458 positions in 2023‑24) to address REAL ID workload, as well as $24.4 million (increasing to $32 million ongoing) and 258 permanent positions to implement customer service, operational, and information technology (IT) improvements. The ongoing funding will shift to the MVA in 2025‑26.

Digital Experience Platform Project. The budget provides $54.4 million in 2021‑22 (totaling $193.5 million over three years) from the MVA and 90 temporary positions to complete the Occupational Licensing and Vehicle Registration phases of the Digital eXperience Platform Project. This is intended to be the first part of a multistep process to replace all of DMV’s legacy IT systems, including driver license and ID card services and programs. The department will provide another proposal for the replacement of the remaining components of the legacy IT systems in the next several years.

Facilities Improvements and Mobile Driver License Pilot Project. The budget provides $39.9 million from the General Fund on a one-time basis for facilities improvements, including maintenance projects, space consolidation, data security, continuity of operations planning, and electric vehicle charging stations. In addition, the budget includes $10 million from the General Fund for DMV to develop a mobile driver license pilot project.

Charter Bus Operator Fee Relief. The budget includes $18 million from the General Fund to provide refunds to charter bus operators who paid DMV fees in 2019‑20 but were unable to operate due to the pandemic.

Facilities Projects. The enacted budget includes $98.4 million from the General Fund for the design and construction phases of several DMV field offices, as well as deferred maintenance at existing facilities. Historically, DMV capital outlay projects have been funded from the MVA. However, due to a long-term structural imbalance in the MVA, and the available surplus in the General Fund, the Legislature approved General Fund for these projects as proposed by the Governor. Figure 3 identifies the funded projects.

High-Speed Rail Authority

The budget provides a total of $623 million for HSRA. This includes $536 million from special funds (primarily the Greenhouse Gas Reduction Fund) and $87 million from Proposition 1A bonds. Notably, the budget does not include the appropriation of $4.2 billion in Proposition 1A funds that was requested by the Governor.

Reappropriation of Federal Trust Funds. In addition to the amount budgeted for HSRA in 2021‑22, the budget reappropriates $929 million in federal grant funds that were provided to the project in 2010. In 2019, the federal government took action to rescind these funds, which the HSRA challenged in court. In 2021, the HSRA entered into a settlement agreement with the federal government, which restored these funds to the project and extended the state’s deadline to expend these funds and meet other requirements from December 2022 to December 2026.