Rural Counties Task Force Meeting – October 2005 Martin Wachs University of California, Berkeley

Quiet Revolution Under Way Nationally State legislatures reluctant to raise user fees Increasingly reluctant to directly raise fees or taxes at all Putting measures on ballot for voters to enact instead of taking action in legislatures

Number of states granting authority to local governments…..All since States: Local motor fuel taxes 33 States: Local vehicle license/registration fees 33 States: Local option sales taxes 15 States: Local income/payroll taxes A few others….severance taxes; impact fees; real estate transfer taxes, mortgage recording taxes

Local Option Sales Taxes Most popular and fastest growing National survey and detailed study of California (23 Counties; 85% of Population) Read ballot measures Interviewed proponents/opponents/administrators Examined projects built and not built, studied budgets and costs

Major Features of LOSTS Majority or Supermajority (in CA) Vote Required Sunset Date/ Reauthorization Required Lists of Projects or Categories of Spending Implementation by Local Governments

Change is happening quickly 44 Transportation Finance Ballot Measures in US in Local/Regional in Nature 9 Statewide 20 Dealt with sales taxes 5 Property taxes 1 Gasoline tax 9 Bond issues Another 43 in 2003

Voting Patterns People vote their interests (e.g. bicyclists vote for bike paths) People vote geographically Democrats more supportive than Republicans

Recent CA LTST Vote Results 2000 Alameda 81.5% Passed Santa Clara 70% Passed Sonoma(Hwy) 58.5% Failed Sonoma (Transit) 60.3% Failed 2002 Fresno 54% Failed Madera 51% Failed Riverside 69% Passed Merced 61% Failed Solano 60% Failed

Recent CA LTST Vote Results 2003 San Francisco 75% Passed 2004 Contra Costa 71% Passed Marin 71% Passed Sacramento 75% Passed San Bernardino 80% Passed San Diego 67% Passed San Mateo 76% Passed Sonoma 67% Passed Santa Cruz 43% Failed Solano 64% Failed

Sonoma County Instructive Part rural but part suburban History of several attempts to pass measures If you try and don’t succeed, try again and learn from your mistakes……

Year Sales Tax Increase ProjectsSupport 19901/2 %Transit and road improvements46% (failed) 19981/2 % Highway, road, transit, bike/pedestrian projects 47.6% (failed) 20001/2 %Highway improvements58.5% (failed) 20001/4 % Rail/bus service, road maintenance, pedestrian, and bicycle projects 60.3% (failed) 20041/4 % Highway, road, transit, bike/pedestrian projects 67.2% (passed) Source: Sonoma County Registrar of voters: Table XX: History of local transportation sales taxes in Sonoma County since 1990.

Sonoma 2000 Measure B In order to (1) widen and improve Highway 101 from Windsor to the Sonoma-Marin border; (2) improve or construct major Highway 101 interchanges; and (3) improve sections of Highway 116, shall a 1/2 cent sales tax be levied for a period not to exceed eight (8) years?

Sonoma 2000 Measure C In order to (1) repair and improve local streets and roads; (2) implement passenger rail service through Sonoma and Marin counties; (3) expand transit service by increasing bus frequencies and establishing broader service; (4) enhance transit service for seniors and the disabled; and (5) build and improve bicycle and pedestrian paths, shall a 1/4 cent sales tax be levied for a period not to exceed sixteen (16) years?

Comparing 2000 Measures B & C Highways Measure Resulted from Organized Campaign…..58.5% Voted in Favor and it Failed Transit Measure Resulted from Hasty Last Minute Effort…..60.3% Voted in Favor & it Failed… Suggests New Interpretation….Transit Measures May Be Inherently More Popular

Sonoma 2004 Measure M To maintain local streets, fix potholes, accelerate widening Highway 101, improve interchanges, restore and enhance transit, support development of passenger rail, and build safe bike/pedestrian routes, shall the Sonoma County Transportation Authority be authorized to levy a 1/4 cent retail transactions and use tax for a period not to exceed 20 years, spend money raised by the tax on the projects proposed, and issue bonds to finance the projects?

Interpretations from Regression Greater correlation between failed transit and passed combined measure than between failed highway and passed combined measure Environmentally oriented citizens more likely to vote yes Democrats vote yes; Republicans less so Higher income/education communities vote yes, holding constant political affiliation Proximity to projects a good predictor

Which way do we go?

Issues Raised by LOSTs Move away from user fee philosophy Sales Tax is broad based tax Regressive Consistency with Regional Transportation Plans Project delivery Local authority and responsibility Flexibility versus specificity Salience of issue of “trust”

More Issues Raised by LOSTS Christmas tree measures Pay to play measures may be even worse (California Proposition 51) Dissociation between projects and efficiency of management of system Increased congestion in many areas is due to longer-intercity trips; why pay for improvements through local taxes?

Broader Questions Worth Asking Is user fee concept still valid and appropriate? User fees provide incentives to efficiency Motor fuel taxes were second best, and may be declining Technology to the rescue/ A new era of tolls Attitudes changing toward tolls, if you get what you pay for