Transportation plan needs more than a simple fix

People who know about fixing and building roads will tell you that repairing an ailing road promptly is 6 to 10 times cheaper than letting it go too long. It's no different for a homeowner who discovers a leaky roof. Fix it now or face huge consequences later.
These examples provide a fitting metaphor for the challenges we face in securing adequate funding for California's transportation system.

As anyone who spends time behind the wheel knows, our golden state is the "olden" state when it comes to the quality of our transportation system: lots of lousy roads and too much congestion.

There is fortunately a little light in the tunnel. Voters in 2006 passed two critical measures that – to further abuse the metaphor – are filling some major potholes in our road to recovery.

Proposition 1A prevents politicians from raiding the gasoline sales tax to bail out the state budget or spend on programs unrelated to transportation. Proposition 1B provides $20 billion in bonds to fund critical transportation improvement projects that sat on the shelf gathering dust for lack of funding.

In just over a year since the passage of Prop. 1B, the California Transportation Commission has moved more than $11 billion through the door. Some of those projects have already broken ground, which is light speed in the transportation world.

So, aren't we on the right track to solving our transportation funding woes? Sadly, the answer to that question is: we are heading in the right direction, but we don't have enough gas to get there.

How did we get here?

You need a computer flow chart to track the funding stream for California's transportation program, but put simply, the bulk of the money for California's transportation program comes from federal and state gasoline excise taxes (36.4 cents/gallon), state sales tax on gasoline and the $20 billion Prop. 1B bond approved by voters in 2006.

Historically, most of the money to build and maintain our roads and highways came from state and federal excise taxes on gasoline. But this pot of money is losing ground. Federal and state excise taxes have remained unchanged for at least 14 years. Cars are more fuel efficient, which means they are generating less revenue for the wear and tear they produce. The push for ethanol blends and alternative fuels – while environmentally beneficial – is further cutting into this revenue source.

Once the backbone of the transportation system, excise taxes today don't fund any new construction and manage to generate only half of the $5 billion needed annually just to maintain what we already have.

That leaves the state sales tax on gasoline and Prop. 1B bond funds as the only statewide sources of funding for capital projects.
And while we're getting fewer dollars per mile of road usage, we're also getting less project built for our dollars. Thanks to worldwide demand, the cost of construction materials has far exceeded the consumer price index. Environmental mitigation, high costs of land and excessive litigation have all conspired to raise the cost of construction.

How do we get where we need to go?

As the transportation community has gone through the process of identifying the best way to spend the Proposition 1B funds, it has been a painful exercise for everyone, because it demonstrates that $20 billion – even though it's a lot of money – can't solve decades of neglect.

Leveraging private money to construct toll roads, HOT lanes, high-speed passenger rail, truck lanes, etc. is one way to enlarge the funding pie – and it can be done without endangering public sector jobs, which is a major concern of some unions. But using PPPs on state projects requires legislative approval and so far, it's not happening.

We also have to rethink the gasoline excise tax. It's a stalwart workhorse, but it's old and tired. If the politicians lack the political will to bring it up to a level that reflects the cost of construction and maintenance in today's dollars, then perhaps they will opt for a system that generates revenue based on "vehicle miles traveled?" Sure.

I can already see the angry masses reaching for the rotten tomatoes. But let's get real. If we want a world-class – or even just a safe and efficient – transportation system to travel on, we have to figure out how to pay for it. Thanks to Propositions 1A and 1B, we have a little breathing room to figure it out, but the paved road ends soon and the rest of the ride looks pretty rough.

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