Friday, October 28, 2011

The looming showdown in surface transportation funding


Or "How I learned to stop worrying and love my car.

Although presidential candidates in the last election tried to ease the pain of the gas tax by temporarily suspending it (the federal excise tax that is), the problem is that desperately needed funds derived from a gas tax have less of an effect with each passing year. The last time the state of California raised the state excise tax was 21 years ago. Although the total miles driven by California's has begun to peak the addition of alternatively powered and fueled vehicles (hybrids and electric) on the roadways means that gas tax collection is going done far faster than our use of the roadways. 

In a recent Los Angles Times opinion column "It's time to raise California's Gas Tax" (see links below), the author highlights comments by the current state treasurer and governor.

"California's infrastructure was designed for 25 million people, but we're fast approaching a population of 40 million.We've got a lot of needs, but we're never going to be able to finance them with the General Fund," State Treasurer Bill Lockyer says. "It's too big a price tag."
"I surely didn't expect California to grow like it did," Jerry Brown told me last year as he was starting to run for governor again. "We had tremendous growth. And when you have growth, you've got to build: energy, water, roads, transit, schools, jails."

But the Democratic candidate added a caveat: "We need a design change. We can't just keep paving over. We've paved over the San Fernando Valley. We've got to use the land better. We've got to use our energy better — the natural resources, the wind, the sun, geothermal."

The big argument has always been that the huge investments required to build roadways designed mostly for solo vehicle trips are funded by the oft used term "user fees". Gas taxes and highway trust funds gave us the illusion that each mile driven was more than covering the cost of our massive expansive roadway system. But the highway trust fund is nearly insolvent, and state, regional, and local governments are finding that user fees do not even come close to building and maintaining roadways.

That gap has been cobbled together with a patchwork (depending on the funding level) of general fund revenue, sales taxes, payroll taxes, vehicle registration fees, and property taxes. Just last November, Santa Clara County residents approved Measure B, which would add a $10 vehicle registration fee to each auto. This fee would be apportioned to each Santa Clara County city passed on roadway miles and population.

In a recent post I highlighted a presentation this week that San Jose's Director of the Department of Transportation needs $1 billion over the next 10 years just to keep his city's roads at an average maintenance level. Only about $2 to $3 million of the $100 million needed each year will come from the city's general fund. Measure B funds mentioned above will only contribute about $5 million each year. The rest of the funds which will come from State Proposition 42 funds as well as other grants will only total approximately $15 - 20  each year for the next 10 years, leaving an $80 million dollar shortfall each year.

Just to maintain the city's roadways at the same levels over the next 10 or 20 years will require additional revenue. San Jose city staff have recommended a parcel tax to cover these expected roadway maintenance shortfalls. Additionally it was mentioned in the tail end of an article yesterday in several Bay Area Newsgroup papers that a regional gas tax is being considered ("Bay Area transit agencies could save $235 million a year, analysts say"). Although traditional gas (excise) taxes are raised at the federal and state level (and in Oregon at the local level), this would be the first time that a regional gasoline tax will be initiated.

All in all, you can expect the costs of our expensive and aging roadways to go up. It's just that the costs, in the form of property, sales, and other taxes will go up but those costs won't necessarily be born solely by the users.

What are your thoughts on this subjects? Any comments.

It's time to raise California's gas tax - Los Angeles Times - 10-27-2011

Bay Area transit agencies could save $235 million a year, analysts say - Contra Costa Times - 10-27-2011

San Jose's DOT Director discusses the state of the city's roadways and how to repair them - One Square Mile -10-27-2011

Transportation for America - The Fix we're in for; The state of our bridges

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