Understanding State and Local Transportation Funding Proposals

By Zach Friend

Recent storm events have caused over $9 million in local road damage causing the Board of Supervisors to declare an emergency seeking funding from the California Office of Emergency Services. The road damage is on top of a local road network that clearly needs more funding and attention. One of the most common requests our office receives is for road, culvert or other related infrastructure repairs – and given how much our residents pay in local property taxes, it’s a fair question to ask why roads aren’t being maintained to the standard we would all like. Here’s an overview of current and proposed funding.

How are local roads funded?

The majority of local road funding comes from the state gas tax and occasional bond funding. The state gas tax is not indexed for inflation and has not increased since 1994. As cars become more fuel efficient (and electric vehicles become more common) this funding stream has become much less reliable. This funding is used for everything from local road repairs and highway improvements to bridge (including bike/pedestrian bridges), and the proposed trail network. A second funding mechanism comes from a property tax assessment of a little over $50/year per parcel, which brings in about $2.7 million locally.

Unfortunately this amount is not enough to maintain the over 600 miles of roads in the unincorporated County area. However, we have been working closely with our state elected officials on increasing the amount of funding for our local needs. Recently I joined with elected officials and transportation experts from Monterey, San Luis Obispo and San Benito counties in Sacramento to meet with the Governor’s Secretary of Transportation and legislative leaders in the Assembly and Senate to highlight the conditions in our counties and the need for state support.

What are the current state proposals?

Recognizing the increasing amount of deferred maintenance and inefficacy of the current gas tax funding structure, the Governor last year convened a special session of the state legislature to deal with transportation funding. The legislature remains within that session and three separate proposals have been floated — one in the Assembly, one in the Senate and one from the Governor. Here is a quick overview of the three:

• Assembly (AB 1591 — Assemblymember Frazier): The Assembly bill is the largest and most aggressive of the funding proposals looking to bring in about $7.8 billion in annual statewide transportation funding.

The key elements are that it would restore the gas tax to 17.3 cents (the previous amount before reductions), index it for inflation every three years, add a road user fee on electric vehicles and have a $38 annual vehicle registration fee.

• Senate (SBx1 Senator Beall): The Senate bill provides about $6 billion in annual statewide transportation funding. It also restores the gas tax to 17.3 cents and indexes it to inflation every three years, it adds a smaller road user fee on electric vehicles and has a smaller ($35) annual vehicle registration fee.
• Governor: The Governor’s proposal is the smallest of the three proposed and would bring in about $3.6 billion annually. It also restores the gas tax to 17.3 cents but indexes it to inflation every year. However there are no electric vehicle fees and no vehicle registration fees. A system wide road access/highway user fee of $65/year replaces them.

The negotiations on these bills have just begun. While it’s unclear if any of them will ultimately pass this is the most committed to a transportation funding package the governor and legislature have been in quite some time. Currently, all of the proposals at the state look to local governments to have a “self-help” tax measure in place to leverage funds. This is one reason (of many) that a local sales tax measure for transportation is being proposed for the November ballot.

What is the current local proposal?

The local Regional Transportation Commission (RTC) is proposing a half-cent sales tax on the November ballot for local transportation needs. Having a local sales tax measure will allow for leveraging available state and federal funds – including bonding efforts. In general, the local sales tax measure will provide over half of the funding toward local roads and highway improvements including safe routes to school, repaving of roads and auxiliary lane work to State Park Drive and new bicycle/pedestrian bridges. The remaining funds will be distributed between senior and mobility access transit programs through Santa Cruz METRO and other providers, coastal rail trail funding and rail corridor maintenance and environmental analysis. A more complete look at the funding measure can be found on the RTC website at www.sccrtc.org.

Meeting local transportation needs is very challenging, but state action (should it come through) can have a real impact on our local issues.

Visit www.tpgonlinedaily.com/state-slashing-transportation-funding/ for more information about this subject.

•••

As always, I’d love to hear your thoughts. Feel free to call at 454-2200.