SACRAMENTO — The state is running a $1.6-billion deficit in its highway expansion program and the governor and Legislature will have to either raise highway taxes and fees or eliminate projects aimed at relieving congestion, the Legislature's nonpartisan budget analyst said Wednesday.
Legislative Analyst Elizabeth G. Hill, in a review of Gov. George Deukmejian's proposed $44.3-billion budget, said the state's 5-year, $1-billion-a-year highway expansion program would continue to operate with a deficit even if the governor wins voter approval for his $1-billion transportation bond issue.
More importantly, Hill said, by 1989-90 the state will not have enough money to meet the ongoing cost of maintaining and operating the existing highway network.
The review of the state's transportation program was included in the 1,267-page budget analysis that Hill prepares annually for the Legislature. The budget "book" will be used as the foundation for several months of budget hearings that the Legislature will undertake before voting on it in July.
Overall, Hill said the governor's proposed budget for the fiscal year that will begin July 1 satisfactorily funds existing programs and provides necessary increases to keep up with inflationary costs and such things as rising enrollments in public schools.
In hundreds of individual recommendations, she proposed that $328 million be cut from the governor's $44.3-billion budget. Although the Legislature frequently follows individual recommendations from the analyst, it generally winds up approving a budget calling for more spending than the governor recommends.
Hill said the decision on whether to raise the current 9-cents-a-gallon tax on gasoline and other highway user fees or to cut expenditures will have to be made by the governor and the Legislature. She offered no specific recommendations.
She said the deficit developed because of federal transportation cutbacks and because state highway expenditures are increasing faster than revenues generated by the current gasoline tax and highway user fees.
The analyst said that the state had been running a deficit since the 1986-87 fiscal year, drawing money from a once-healthy reserve in the state Highway Trust Fund. She said that at the present rate the reserve is expected to shrink from $629 million less than a year ago to $30 million by June, 1989, the end of the next fiscal year.
With congestion on freeways in Los Angeles and San Francisco growing faster than the money the state has available to spend, Hill called on the Legislature to "re-examine its transportation policies."
Among other things, Hill suggested that the Legislature should consider either playing a bigger role in state transportation policy or giving more authority to regional transportation authorities.
Projects Fall Behind
Despite the deficit in the highway program, Hill said the state Department of Transportation is running badly behind in its ability to get projects already funded off the drawing board.
She said the governor's budget proposes spending about $109 million to contract with private consultants for engineering and highway design work, an increase of $75 million over the current year. She recommended that the Legislature reduce that amount by $17 million because Caltrans "has been unable to substantiate its cost projections."
Elsewhere in the budget review, Hill said that the amount of money the governor is proposing to spend to combat AIDS is actually being reduced, rather than increased, as the governor has been saying. Hill said state spending on various AIDS programs will actually decline by $7 million under the governor's budget.
Hill said the reason for this is that the governor has no plan to replace money obtained from a one-time-only federal grant to purchase the drug AZT used by AIDS victims. The analyst's report also criticized the Administration for not having a plan to control the spread of AIDS among intravenous drug users, the segment of the population where AIDS is increasing fastest.
In another section of the review, Hill said that the state's program to help welfare recipients become self-sufficient, called Greater Avenues for Independence (GAIN), will never result in a net savings, as once anticipated.
Originally, the cost of GAIN was to have been offset by savings in other areas, most notably in the costs of administering the Aid to Families with Dependent Children program. Once welfare recipients gained employment, it was presumed that they would leave the AFDC program. It was also believed that other welfare recipients would not apply for aid because of requirements of the GAIN program.
But the analyst's review of the GAIN program said that costs of the program had risen faster than expected and the savings had never materialized at levels predicted by the Administration. It said the program would result in a net cost to the state of $65 million a year.