January 28, 2015
Transportation Funding Options
And the Options Are...
A Look at the Future of Transportation Funding
By Tim Whyte
Regional transportation systems, heal thyself.
That just may be the de facto prescription for future transportation funding in the Southland as we turn a figurative corner in the next several years, as existing projects near completion and our leaders look to the next round of needed transportation improvements and collectively try to figure out exactly how to pay for them.
You could argue that road and highway improvements are going great guns — for now. The Golden State Gateway Coalition’s top-priority project, the improvements to Interstate 5 in northern Los Angeles County, are deep into the construction of Phase 1 truck lanes, 67 percent complete at press time and scheduled to be finished in the coming year. Elsewhere in the region, improvements are under way on Interstate 405, State Route 126, SR 138 and more.
Federal, state and local funds have been invested in these projects, and they will accomplish a great deal toward adding roadway capacity and improving existing facilities.
But, just as Walt Disney said his Anaheim theme park will never be finished, a road and highway network isn’t “finished” just because any particular project is completed. It’s like a living thing: It will continue to grow and will need routine maintenance to stay healthy.
So how will we pay for it? With the federal Highway Trust Fund expected to be insolvent this year, and Congress occupied frying bigger fish, the picture in terms of future federal transportation funds appears dim — leaving local transportation leaders analyzing the options absent any impending windfall of federal transportation funds.
“The Trust Fund has been broke for the last decade, basically,” says David Grannis, of PointC Partners, a consultant for the Golden State Gateway Coalition. “There’s been not only a lack of action on money, but if you think about it, there’s no real imperative anymore.”
That, says Grannis, is because the federal interstate highway system — originally conceived by President Dwight Eisenhower as a key to national defense — is basically finished, and there’s been no initiative to move toward “what’s next” on a national scale.
“I see no national vision, literally from anyone, about what our future transportation system should look like,” says Grannis. “We don’t have a vision.”
That, he says, leaves state, regional and local governments to fend for themselves, with particular emphasis on entities like Los Angeles County’s Metro and the Orange County Transportation Authority.
“They’re the boots on the ground,” says Grannis. “I think the trend line from here is really regionalizing transportation investments.”
Grannis expects the years ahead to feature creativity and innovation in transportation funding — perhaps more public-private partnerships like the one involving the Gateway Coalition, Caltrans and Metro — and also new tools to shore up transportation funds, either providing new revenue sources or shoring up those that are drying up or have run their course, like the state’s $19 billion Proposition 1B.
For example, he says, Oregon is experimenting with a vehicle miles traveled (VMT) tax, which is assessed to motorists based on how many miles they travel rather than how many gallons of gas they buy. This, in turn, offsets the imbalance that would inevitably arise as electric and hybrid vehicles become more popular. After all, those vehicles utilize roads and highways just as much as gas-burning vehicles do.
Oregon’s VMT program is a voluntary one involving 5,000 drivers of high-efficiency vehicles, but it’s being closely watched as a potential model for future transportation revenue programs.
Also, says Grannis, here in California new revenue sources are being considered. Among them: The California Air Resources Board auctions carbon dioxide emissions allowances under its cap-and-trade program, and a significant percentage of the resulting revenue is likely to be spent on transportation improvement projects. “There’s a source nobody even knows about,” says Grannis.
And, he adds, as the Southland and California move forward, increasingly there will be a need to not just find revenue for new transportation projects, but also to maintain the existing network.
“Inside California, there’s an initiative in play to lockbox some maintenance money,” he says. But, maintenance can be a tough sell because it’s lot less sexy to political leaders. “Nobody wants to cut a ribbon on a repaving project.”
Steve Finnegan, Manager of Government Affairs for the Automobile Club of Southern California, says taxpayers will inevitably face decisions on transportation funding.
“The transportation funding outlook for 2014 appears dim in terms of increasing the amount of money available for transportation investment. The need to better maintain repair, rebuild, and expand our roads and public transit systems is growing faster that available resources,” Finnegan says.
“In the coming years voters will likely be asked to consider a number of tax and fee proposals,” he adds. “Some of these proposals make sense in the near-term, like raising state or federal gasoline tax rates. AAA is supporting a measure to do just that – to increase the federal fuel tax rate by 15 cents. Other ideas, like a ‘vehicle miles traveled’ tax, still need much more exploration and discussion.”
And, Finnegan says, while there’s of course work to do on the front end in terms of funding, that’s only part of the equation.
“Government agencies and policy makers alike must think of ways to deliver projects faster and at lower costs to save money,” he says. “Eliminating red tape, partnering with the private sector, and providing better routine maintenance are some reforms the Auto Club – and taxpayers – wants to see and that must be part of any effort to increase taxes and fees.”
Fiscal prudence must be exercised regardless of which financing mechanisms are chosen for future transportation improvements, says 38th District Assemblyman Scott Wilk, who represents portions of northern Los Angeles County including Santa Clarita.
“Going forward, we all need to be vigilant to make sure our tax dollars are spent the right way, on the right projects,” says Wilk, who in February 2013 called for an audit of the California High-Speed Rail Authority’s oversight and management of private contractors for the initial 29-mile segment of the planned $68.5-billion high-speed rail line connecting the Bay Area to Southern California.
Wilk, in response to a Los Angeles Times article about the ongoing legal maneuvering over the high-speed train, posted on his Facebook account in November: “The Bullet Train continues to be the ‘Blank check to Nowhere.’”
“We can’t just write blank checks,” Wilk says. “We have to be smart about it.”
Santa Clarita Councilwoman Marsha McLean, who serves on the Southern California Association of Governments’ Transportation Policy Committee, says it will become more important than ever for regions like northern Los Angeles County to speak up and make sure their voices are heard when the transportation pie is being sliced.
“After aggressively making our needs known, we have been able to obtain funding for some much needed I-5/14 improvements. But the job is far from over,” McLean says. “We deserve a lot more attention than we got from the Federal Highway Trust Fund and with this fund quickly becoming insolvent, there needs to be a huge push to make sure we get a fair share of whatever future funding does become available.”
She adds: “The northern portion of Los Angeles County is the fastest-growing sub-region of the county, which includes the Santa Clarita and Antelope valleys. The best way to gain the funds needed for vital projects is to advocate continuously, loudly and clearly. I look forward to working closely with the Golden State Gateway Coalition to make sure Santa Clarita portions of the I-5 and Highway 14 are recognized as one of the most important corridors for goods movement in the nation.”
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