1. What & Why? The Current State of California’s Transportation Funding Therese W. McMillan Deputy Director, Policy Metropolitan Transportation Commission Transportation/Land Use/Environment Symposium University of California Los Angeles October 19-21, 2003 · Lake Arrowhead, California

2. TEA 21: Programs Total 6 Years: $217.9 Billion

3. TEA 21: Federal Highways Total 6 Years: $171.1 Billion

4. TEA 21: Transit Total 6 Years: $41.0 Billion

5. FHWA Funding $2.53 FTA Funding $1.00 State Fuel Taxes $2.10 Weight Fees $0.70 FY 2003-03 California Federal and State Transportation Funding (in $ billions)

6. What is the State Transportation Improvement Program (STIP)? State’s spending plan for state and federal funding. Comprised of 75% Regional Transportation Improvement Program (RTIP) and 25% Interregional Transportation Improvement Program (ITIP). Approved biennially and covers a five-year period. State Funding

7. 25% N/S Split County Share Calculation: 75% county population 25% state highway mileage Caltrans RTPAs (i.e. MTC) 75% State Funding STIP Fund Allocation

8. The Current State Crisis The state’s fuel tax has lost one-third of its value since 1964, adjusted for inflation.

9. State Transportation Improvement Program Also at Risk State Highway Account: Going, Going, Gone? The Current State Crisis

10. 2000-01 Governor Davis proposes TCRP/AB 2928 signed into law: $6.8 billion total statewide / $4.9 billion in projects $1.7 billion in San Francisco Bay Area 2001-02 Majority of funding for TCRP immediately deferred for two years: from FY 2001-02 until FY 2003-04 March 2002 Proposition 42 passed by voters; to protect and extend funding for TCRP projects, local streets and roads and transit elements January 2003 Governor’s proposed budget proposes significant TCRP program reductions: TOTAL: $1.6 Billion Statewide July 2003 Final Budget suspends majority of Prop 42 funds in FY 2003-04. Program losses statewide: $489 million for TCRP projects $187 million for local streets and roads $187 million for the State Transportation Improvement Program $93 million for public transit TOTAL: Almost $1 Billion Traffic Congestion Relief Program: A Promise Deferred The Current State Crisis

11. Why Should We Care?

12. TEA-21 (in billions) SAFETEA- Administration Proposal (in billions) % change from TEA-21 Highways $ 171.1$ 192.512.5% Transit $ 41.0 $ 45.811.7% Other $ 5.8 $ 9.156.9% Total$217.9$247.413.5% Feds to the Rescue? Federal Reauthorization: Sparklers, Not Fireworks Compare: ISTEA to TEA-21 = 40%

13. Erosion of the Purchasing Power of the Federal Excise Tax on Gasoline Due to Inflation Feds to the Rescue?

14. Bay Area’s Local Response: Maintenance vs. Expansion Commitment State/Federal vs. Local Funding The Regional Transportation Plan Funding Distribution: $87.4 billion

15. In each of the five Bay Area counties with a special transportation sales tax in place, the proceeds from this levy exceed the county’s share of funds from the State Transportation Improvement Program (STIP). Bay Area’s Local Response: Sales Taxes Outstrip the STIP

16. The Economy Strikes Back… FY 2000-01 (millions) FY 2001-02 (millions) Percent Change Alameda $113.2$101.0-10.8% Contra Costa $ 64.7$ 65.61.4% San Francisco $ 77.5$ 63.9-17.5% San Mateo $ 68.7$ 58.6-14.7% Santa Clara $190.0$149.9-21.1% Bay Area County ½ -Cent Transportation Sales Tax Receipts

17. …Maybe… FY 2000-01 (millions) FY 2001-02 (millions) Percent Change Los Angeles $1069.0$1052.4-1.6% Orange $ 214.8$ 209.1-2.7% Riverside $ 89.5$ 94.45.5% San Bernardino $ 90.0$ 94.55.0% San Diego $ 189.8$ 193.11.7% Southern California ½ -Cent Transportation Sales Tax Receipts

18. FY 2000-01 (millions) FY 2001-02 (millions) Percent Change Fresno $41.1$41.61.2% Sacramento $85.1$85.60.6% San Joaquin $32.7$34.34.9% Central Valley ½ -Cent Transportation Sales Tax Receipts …Not?

19. 1. Index State and Federal Fuel Taxes Loss of purchasing power for the backbone of state and federal transportation funding has eroded its financial foundation—indexing or some proxy is one way of restoring it. 2. Shed the Shackles of the Ballot Box: Almost every state transportation revenue measure since 1990 has been subject to voter approval instead of direct legislative action. This uncertainty severely hinders long range transportation investment planning and implementation. 3. Lower the voter threshold for special transportation taxes Barring legislators making the tough decisions, at least let a simple majority of the electorate bring about difficult, but needed change. 4. Maintain and increase Funding Flexibility to respond to changing circumstances - Rigid expenditure plans, particularly those that leave major projects partially funded, are particularly vulnerable to economic downturns - Complex urban areas with their related diverse mobility challenges, need the ability to mix and match funds to different modes and different functions. 5. Capital Investment must be matched with Operating Capacity - Project capital planning must recognize attendant operating and maintaince requirements, and explicit provide the financial resources to meet those needs. The “Fix-It” Wish List: Stability and Accountability

20. 3. Lower the Voter Threshold for Special Transportation Taxes Barring direct legislative action to enhance transportation funding, at least let a simple majority of the electorate bring about difficult, but needed change. The “Fix-It” Wish List: Stability and Accountability (contd.)

21. 4. Maintain and Increase Funding Flexibility - Rigid expenditure plans, particularly those that leave major projects partially funded, are particularly vulnerable to economic downturns. - Complex urban areas, with their associated diverse mobility challenges, need the ability to mix and match funds to different modes and different functions. - Flexible federal and state funds have provided that “packaging” capacity. The “Fix-It” Wish List: Stability and Accountability (contd.)

22. 5. Operating Capacity to Match Capital Investment - Project capital planning must recognize attendant operating and maintenance requirements, and explicitly provide the financial resources to meet those needs. 6. Make Room for Innovation -As demand for infrastructure increases, traditional revenue sources can’t keep pace. Tolling and other pricing mechanisms may have a future… The “Fix-It” Wish List: Stability and Accountability (contd.)