Governor Brown is on Right Track with Budget Proposal but Much More Can (and Should) be Accomplished

The American Council of Engineering Companies of California (ACEC California) today applauded Governor Brown for his willingness in his just released May Revise to address a significant chronic problem in the state’s budget deficit.

“In his May Revise proposal, the Governor has taken the first real steps in many years towards addressing Caltrans’ overstaffing and workflow issues in an era when there are few resources and even fewer projects to support such a huge department. We applaud Governor Brown for proposing some cuts and opening the door to a full discussion of the issue,” said Paul Meyer, executive director of ACEC California. “There is no doubt that the state can and should do much more,” he added.

Both the bipartisan Legislative Analysts Office (LAO) and the State Auditor have previously recommended that the state can make meaningful savings at Caltrans–money which the state could put to better use in actually rebuilding its crumbling infrastructure. The LAO, for example, has concluded that Caltrans is way overstaffed and recommended cutting Caltrans staff by 1,500 positions–for a savings of approximately $200 million per year. That proposed reduction would be more than 4.5 times the size of the Governor’s proposal.

Caltrans management itself–-faced with the certainty of a declining federal funding and the wrap up of a past bond fund–has also recognized that the department needs to shift more of its engineering work to the private sector in order to better manage project and personnel workload. Management last year asked to be able to contract up to 20 percent of its workload to the private sector instead of the 10 percent historically contracted out. Governor Brown’s proposal will result in Caltrans being able to contract out just 11 percent of its work.

Caltrans today is actually an anomaly. Nationwide state departments of transportation (DOTs) use private engineering firms on average for more than 50 per cent of their workload. DOTs realize that with a private firm after a project is satisfactorily finished, the state has no further financial obligations—such as public employee pensions and lifetime healthcare. In addition, the LAO and State Auditor have also pointed to systemic inefficiencies in Caltrans’ operations.

Until addressed with meaningful reforms, these will continue to hamper the department’s ability to accurately account for project costs and limit its efficient operation. “The Governor is certainly on the right track and our organization is heartened to see him addressing important issues for the good of the State and all of its citizens. We support him in this endeavor and assure him that the private engineering sector within California stands ready to help should he choose to pursue these additional opportunities to make Caltrans as efficient and cost effective as possible,” Meyer concluded.

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