California’s Big Infrastructure Spending Bill

Late last month, California added its voice to the larger national discussion around infrastructure spending. Gov. Gerry Brown announced a proposal to raise $52 billion over the next 10 years and spend $5 billion a year for road and highway projects, funded mostly by diesel and gas taxes.

The proposal raises the excise tax on diesel to 36 cents a gallon. The diesel sales tax would go up, too. Similarly, the excise tax on gas would rise 12 cents. An additional “transportation improvement fee” for vehicle licenses would also be levied.  

California already pays the highest gas taxes of all the states, and critics say most of those funds have been diverted away from roadway improvement projects. This bill amends the state’s constitution to mandate that new tax revenue will be spent on infrastructure.

No one denies the need to spend on infrastructure is a priority, and if raising the price of diesel and gas is the only way to do it, how should carriers respond when they’re already working with thin margins?

When operating expenses rise, it’s imperative to ensure the fleet is as efficient as it can be. GPS fleet management solutions, or telematics, offer an alternative to costly vehicle and power plant upgrades. Three quick ways to improve fleet operations via telematics include:

• Vehicle Analytics – lousy engine performance risks downtime but it also increases fuel spend. Having in-the-moment information about the health of your fleet makes preventative maintenance part of the operating culture and keeps costs down. 
• Vehicle Tracking – Knowing where your vehicles are and when they’re supposed to be at their destination means being able to route them more efficiently. The more miles shaved from routes through intelligent, real time tracking, the more savings in fuel costs and time are realized.    
• Fleet Productivity – Is one of your trucks closer to a new job than another? Make the best use of assets by taking advantage of accurate data. Second by second data and longer term, trending data bring efficiency to operations processes across the board.

California’s in the news now because Gov. Brown is pushing the state legislature to pass the tax bill this week. But this isn’t just a state issue. President Donald Trump has already floated the idea of a $1 trillion national infrastructure improvement plan.

To pay for it, the President suggested improvement projects would be structured as public/private partnerships. Private companies front the funds for the improvements, then recoup their costs — and profits — through tolls and other measures. As a result, costs for operators are likely not going to stabilize anytime soon.

Make sure your fleet is as ready as it can be for the coming operating costs increases.