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Commission staff warn of possible allocation squeeze in 2013–14 as gas tax receipts drop
Summary
Caltrans financial staff presented a 24‑month State Highway Account cash forecast showing tight cash in 2013–14 and long‑term pressure from lower fuel excise receipts. Staff also highlighted higher right‑of‑way costs and bond allocations and flagged Prop 1A allocations available for intercity rail/connectivity projects.
Caltrans budget and allocation staff told the Transportation Commission that while current allocation capacity for the coming year looks adequate, the State Highway Account (SHA) cash forecast shows a possible shortfall in fiscal 2013–14 that could require short‑term borrowing or program adjustments.
Stephen Keck of Caltrans presented the department’s 24‑month SHA cash forecast and said total allocation capacity for the coming year stands at just over $5 billion including bond authority, but cautioned there are risks. Keck pointed to three main pressures: large project extensions carried into 2013–14, rising right‑of‑way (R/W) “poster” costs that are higher than historic estimates, and more frequent STIP supplemental requests. He said some R/W estimates being reported at construction allocation are significantly above prior fund‑estimate numbers and that the cumulative effect could reduce what the commission can allocate.
Keck also presented trend data showing a substantial decline in base excise tax receipts tied to gasoline and diesel consumption. He said the 18‑cent per gallon excise tax base has produced roughly $340 million less for the maintenance/SHOP pool than five years ago and that vehicle miles traveled have declined since 2008; he warned that some of the decline may reflect greater fuel efficiency and alternative fuels, not just recessionary factors.
On cash timing, Keck explained the forecast shows monthly end‑of‑month balances; because gas‑tax receipts arrive on specific monthly cycles, the state can face intra‑month lows that require short‑term internal borrowing from transportation revolving accounts or interfund loans. Keck said the tightest period in the forecast corresponds to the last SHA payment for the toll‑bridge seismic retrofit program and that the department will revisit forecasts as the fiscal year approaches.
Commissioners pressed staff for detail. One asked whether the monthly lines represented low points or month‑end balances; Keck clarified they are month‑end and that revenue timing creates the sawtooth pattern in the chart. Commissioners and staff also discussed higher R/W costs and the incentives in the STIP process that sometimes delay accurate reporting of R/W estimates until construction allocation, which can create a cumulative shortfall.
Keck closed by noting that Proposition 1A appropriations included funds for high‑speed rail connectivity and intercity projects and that a portion (about $819 million as presented) is available for the commission to allocate for interconnectivity projects when ready.
The takeaway: commissioners were warned to watch right‑of‑way costs, STIP supplementals and fuel‑tax revenue trends as they could combine to constrain allocation capacity in 2013–14; staff said it will monitor the situation and adjust the next fund estimate accordingly.
