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The Current State of California's Transportation Funding Crisis

Explore the challenges faced by California's transportation funding, including the erosion of the state's fuel tax value, the risk to the State Highway Account, and the deferred promise of the Traffic Congestion Relief Program. Discover the impact on the state's transportation improvement programs and the need for stability and accountability in funding. Learn about potential solutions to address the funding crisis and the importance of maintaining and increasing funding flexibility.

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The Current State of California's Transportation Funding Crisis

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  1. What & Why?The Current State of California’s Transportation Funding Therese W. McMillan Deputy Director, PolicyMetropolitan Transportation Commission Transportation/Land Use/Environment Symposium University of California Los AngelesOctober 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. FY 2003-03 California Federal and StateTransportation Funding (in $ billions) FTA Funding $1.00 Weight Fees $0.70 FHWA Funding $2.53 State Fuel Taxes $2.10

  6. State Funding • 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.

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

  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. Traffic Congestion Relief Program: A Promise Deferred The Current State Crisis

  11. Why Should We Care?

  12. Feds to the Rescue? Federal Reauthorization: Sparklers, Not Fireworks Compare: ISTEA to TEA-21 = 40%

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

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

  15. Bay Area’s Local Response: Sales Taxes Outstrip the STIP • 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).

  16. The Economy Strikes Back… Bay Area County ½ -Cent Transportation Sales Tax Receipts

  17. …Maybe… Southern California ½ -Cent Transportation Sales Tax Receipts

  18. …Not? Central Valley ½ -Cent Transportation Sales Tax Receipts

  19. The “Fix-It” Wish List: Stability and Accountability • Index State and Federal Fuel TaxesLoss 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. • 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. • Lower the voter threshold for special transportation taxesBarring legislators making the tough decisions, at least let a simple majority of the electorate bring about difficult, but needed change. • 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. • 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.

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

  21. The “Fix-It” Wish List: Stability and Accountability (contd.) • 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.

  22. The “Fix-It” Wish List: Stability and Accountability (contd.) • 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. • 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…

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