Gov. Gavin Newsom on Friday released his long-anticipated revision of the state's budget for the 2024-25 fiscal year that begins on July 1, revealing a $288 billion spending plan that includes a yawning $28 billion deficit.

The so-called "May Revise" (pronounced: REE-vyze), kicks off negotiations between the administration and the Legislature heading toward a June 15 deadline when the Legislature must adopt a balanced budget or stop getting paid.

Overall, the state will be looking to eliminate trim overall state spending on operations, including personnel, by $7.9%, and seeking to eliminate about 10,000 positions by targeting vacant positions. The budget dips into the state's emergency reserves to shore up its finances.

Transportation funding is projected to be about $17.3 billion for the next fiscal year, buoyed mostly by special funds, such as fuel taxes, and bond funds. Revenue from those funds continues to run strong, with budget projections indicating that various "highway user" funds will increase by $159 million in the next fiscal year.

Due to protections in the California Constitution prohibiting the use of transportation dollars for other purposes, the governor's revised budget generally avoids targeting funds that go to fixing roads. However, some General Fund investments made when the state was flush with cash have been pulled back, including $300 million in FY 2025-26 for so-called "Active Transportation Projects" meant to promote walking and biking, and another $99 million in FY2026-27. Officials said they are still committed to the program and projects, but some projects in outer years would be delayed. One bicycle advocacy group criticized the cuts, saying "there is no need for this cut because there is no deficit in transportation funding."

In a briefing with transportation stakeholders held following the release of the governor's revised budget on Friday, California State Transportation Secretary Toks Omishakin emphasized that 93% of transportation-related dollars remained intact in the revised budget. He said the state is facing "dark storm clouds" as the administration seeks to "navigate a challenging budget season." He said the state will aggressively go after federal Infrastructure Investment & Jobs Act (IIJA) funding to backfill some of the areas reduced by the budget reductions. He stressed there would be no negative impact to near-term construction projects.

One of the big losers in the budget is a program to convert highways to boulevards, being cut in half, from $150 million to $75 million. Projects ready to go in San Francisco, San Diego and Arcata would proceed, Omishakin said, but others would be put on hold.

Omishakin said the department is still committed to climate-related spending as outlined in CalSTA's Climate Action Plan for Transportation Infrastructure (CAPTI). CalAPA and others have expressed concerns that not enough is being devoted to the basic principles of SB1, the Road Repair & Accountability Act of 2017 that raised pump prices to fix roads and bridges. That pavement maintenance is being diverted to a priority offramp was evidenced by the recent release of the CalSTA Strategic Plan, which didn't mention road repair or maintenance once, but mentioned climate and equity numerous times.

In a harsh blow, the governor's budget eliminates $10 million on top of the $5 million reduction already proposed earlier this year for the Women in Construction program, basically eliminating it. Recent U.S. Bureau of Labor Statistics data show only 10.9 % of the construction workforce are female, and the state Department of Industrial Relations has been promoting construction careers for women via apprenticeships and other career-entry points. Officials during the briefing did not answer a question posed by CalAPA on this topic.

The governor's Department of Finance economic outlook, included in the May Budget Revision, closely mirrors trends and projections contained in the CalAPA Asphalt Market Forecast for California that was released last December and updated April 30. In particular, inflation continues to be stubbornly higher than desired, economic growth and non-farm job creation is modest and construction activity is in the doldrums. "Growth is projected to be moderate into 2025," the governor's economic forecast said.

The governor's May Budget Revision summary document released on Friday is HERE.

A previous Asphalt Insider story on the release of the governor's initial budget in January is HERE.

The Women of Asphalt California Branch is sponsoring an educational webinar series titled “Empower-Her Leadership Series: Elevating Women in Asphalt.” The kick-off webinar will take place on Thursday, May 16 from 11:30 a.m. to 1 p.m. and is titled, “Strategic Goal Setting: Fueling Your Career and Business Growth.” The featured presenter is Rachael Luciak, MBA, CCMP, founder of Strategic G Advisors and also chairwoman of the WofA-CA Educational Committee. The event is being hosted by Mimi Le of MCK Services, the Women of Asphalt California Branch Co-Chair. The webinar is free, but advanced registration is required HERE.

Attendees to the webinar will learn the vital role of mission, vision and values in establishing a robust foundation for success; how to prioritize and craft “SMART” goals that catapult you toward achieving those goals; and effective strategies for ensuring successful goal implementation and sustainability.

For more information on the Women of Asphalt California Branch, including to sign up to receive notices on WofA-CA activities and events, click HERE. The Women of Asphalt California Branch is supported by the CalAPA California Asphalt Research & Education (CARE) Foundation. Learn more about the foundation HERE.

In last week's newsletter we noted that May 15 is national "Asphalt Day, and also highlighted the fun facts about asphalt are courtesy of our colleagues at the Virginia Asphalt Pavement Association, who compiled them in a web page, "The History of Asphalt," which can be viewed HERE. The official Asphalt Day website, with logos and other resources, is HERE.

We'd like to give a tip of the hard hat to our partners at the Asphalt Institute for their promotional work in this area, and to the Asphalt Pavement Alliance (and the National Asphalt Pavement Association) for shipping us a pop-up banner last week that we proudly put on display in our West Sacramento offices. CalAPA Board Member and trainer Pete Lambert with McGuire & Hester is pictured with the banner for a photo we sent out via our various social media feeds.

Say it loud and say it proud: Asphalt rules!

CalAPA is pleased to host one of our most popular events of the year -- our "Day at the Races" on Saturday, July 27 at beautiful Del Mar Race Track. The association has once again reserved a luxury suite at the height of the thoroughbred racing season at the famed seaside track. Details and registration are on the event webpage HERE.

Can you think of a better way to reward your loyal employees? Recognize a special customer? Pamper your long-suffering spouse? Even the younger set has discovered Del Mar is a great way to dazzle friends with social media posts guaranteed to go viral. This memorable event is a classy way for you to invest in the most important relationships in your life.

The luxury skybox suite reserved by CalAPA boasts panoramic views from a private balcony close to the finish line, with its own betting windows, access to grounds, a fabulous lunch, snacks and a no-host bar. The event is family-friendly. Photos from last year's event are on our Facebook page HERE.

The Women of Asphalt California Branch will be well-represented with another gala hat contest, which has become an annual tradition that elicits as many cheers as a stretch run. And of course, the day always promises to deliver the unexpected. For an example, you can look no further than this year's Kentucky Derby winner, Mystik Dan, which bested the crowded field at Churchill Downs May 5 by a nose – or as one announcer put it – “a flared nostril” -- despite 16-1 odds.

Early registration is strongly recommended as last year's event sold out quickly. For sponsorship information, contact Jackie Henry of CalAPA at (562) 233-7585. To learn more about the Women of Asphalt California Branch, click HERE.

CalAPA is pleased to welcome its newest paving contractor member, Central Coast Paving, based in Buellton, Calif.

The company specializes in new asphalt paving, maintenance and repairs, and performs work in the Central Coast Area. Projects include asphalt paving, seal coating, chip seal applications, patching, crack filling and striping. The company prides itself in its attention to detail on a wide variety of projects, from streets, parking lots, sports courts, cart and bike paths and driveways.

For more information, visit the company’s website HERE, or call (805) 665-3292.

Each week we highlight a word, acronym or other term commonly used in the asphalt pavement industry in California.

COARSE AGGREGATE: Aggregate particles retained on a No. 8 sieve.

Each week we highlight a key point or best practice of interest to asphalt paving crews, inspectors and others working in the field. We welcome suggestions. More tips can be found in our "Asphalt Parking Lot Construction Checklist" HERE. Information on the CalAPA "Quality Paving Certificate" program is HERE.

COMPACTION: Check pavement temperature before compaction begins. Don't rely solely on an infrared temperature gauge. Have a probe thermometer on hand to check the internal temperature of the mat. The ability to achieve proper compaction requires a mat temperature of 175 degrees or greater. Do not let roller operators park equipment on the fresh mat while compaction is ongoing.

Each week we highlight a term that is specific to climate-change issues related to the asphalt pavement industry. This feature is intended to raise awareness of the asphalt industry's climate-change initiatives and the specialized terminology that goes with them. More information on "The Road Forward" asphalt industry climate initiative can be found HERE.

KYOTO PROTOCOL: A 1997 international treaty where nations detailed emission reduction targets for first time. 

"The journey is the reward."

– Tao saying

We hope you enjoy CalAPA's Asphalt Insider newsletter. We are committed to providing you with the most up-to-date information on technical issues, regulation, news, analysis, people, events and trends in California that is of interest to the asphalt pavement industry and our various agency partners. To subscribe to the newsletter, click HERE. For comments, questions or to suggest a story idea, click HERE.

Sincerely,

Russell W. Snyder, CAE

Executive Director

The California Asphalt Pavement Association (CalAPA)®