How Caltrans Administers its Roadway Projects

CaltrainArticleCalifornia Senate Bill 1 was signed by Governor Jerry Brown on April 28, 2017. State Prop 6 would have rescinded SB 1 but it was defeated by the voters of California on November 6, 2018. So SB1 will continue to raise $0.12 a gallon in additional gas taxes. It is estimated that by 2020 this new funding source will be raising $5.1 billion a year in new State revenues, 2/3rd of which is already earmarked for roadway projects.

Given this large new source of funding now would be a good time to take a close look at how Caltrans spends its roadway money. One way of assessing Caltrans efficiency relative to that of other states is to compare its administration and engineering costs (soft costs) to construction costs. The table below shows California’s soft costs as a percentage of construction costs in comparison with those of other large and populous states:

From a report by the Midwest Economic Policy Institute

May 3, 2013

soft / construction costs
1 Florida 30.6%
2 Washington 30.0%
3 California 28.0%
4 Massachusetts 25.6%
5 Oregon 22.3%
6 New York 20.7%
7 Ohio 16.1%
8 Illinois 16.0%
9 Texas 13.4%
10 Pennsylvania 12.8%
11 New Jersey 12.5%

California’s high engineering and administrative costs relative to construction costs suggests that a fresh look at how the 22,000 employee state agency administers its roadway projects might lead to some significant cost savings and other improvements.  To this end an objective management analysis of Caltrans huge highway building and maintaining agency should be undertaken.

WHAT YOU CAN DO

Write or call Governor Jerry Brown, Governor-elect Gavin Newsom, and your favorite Legislators.

This article was featured in Newsletter Issue 7. Click here to go back to the newsletter.