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Voters Preserve Transportation Funding

Pavement recycling
Noah Berger
Tuesday, November 27, 2018

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California voters on November 6, 2018 rejected Proposition 6, which would have cut more than $5 billion per year in transportation funding statewide, including over $390 million per year for the Bay Area. The measure, which voters defeated by a margin of 57 percent to 43 percent (as of November 27), would have repealed the motor vehicle fuel taxes and vehicle taxes raised in 2017 by Senate Bill 1 (SB 1), the most significant new state investment in transportation in California history.

Impact on Every Bay Area Community
The funding cuts that would have resulted from passage of Proposition 6 would be felt by every Bay Area resident and visitor. Funding levels for the maintenance and rehabilitation of the state’s highways and local roads were woefully insufficient before SB 1, due in large part to the state’s failure to raise the gasoline tax since 1994. Without new SB 1 funding, pavement conditions would have been expected to deteriorate at an ever-accelerating pace. Public transit systems would have faced tighter budgets that may have required cuts in service and delays to vehicle purchases, and to urgent state-of-good-repair priorities. Vital congestion-relief projects and transit system expansions also would have been delayed for years.

Pothole Peril
The greatest negative impact on the region’s transportation system resulting from a SB 1 repeal likely would have been the condition of local streets and roads, 22 percent of which already are classified as being in poor or failed condition. Regionwide, we currently have an average Pavement Condition Index (PCI) of 67 out of 100 possible points, which is considered “fair.” However, conditions vary widely by county as well as within each county depending on the type of road, as shown in this interactive graphic. Overall, local roads in Napa and Sonoma counties are classified as “at risk,” but a sizeable portion of them are deemed “failed,” with PCIs below 25. Whether driving, riding the bus, cycling or walking, Bay Area residents should expect significantly worse local road conditions if Proposition 6 passes. MTC estimates a repeal of SB 1 would have lowered the region’s PCI to 58 by 2027 and would have increased the share of poor or failed conditions to 36 percent in this time.

Proposition 6 would have reduced local street and road funding for every city and county in the state since the funds are distributed by formula. Bay Area cities and counties are forecast to receive $208 million from SB 1 in the current 2018-19 fiscal year, a 73 percent increase in their baseline state gas tax funding, as shown in this table. These funds can be spent on road maintenance and rehabilitation, safety, railroad grade separations, traffic control devices and complete streets components, including pedestrian and bicycle safety projects. Cities and counties already have submitted specific plans to the California Transportation Commission (CTC) for use of these funds. To see specific projects planned by individual Bay Area jurisdictions, visit the local funding page on the SB 1 project website. All such work would have been at risk in the event of passage of Proposition 6.  

Trouble for Transit
Bay Area transit riders had a lot at stake in Proposition 6 as well. SB 1 is anticipated to result in the Bay Area receiving an increase of $156 million in State Transit Assistance (STA) funds in FY 2018-19 – more than two times the baseline STA program. Of this amount, $118 million augments the existing STA program and can be used on any transit agency needs, whether it be increasing service, paying for rising fuel and labor costs, boosting safety measures or expanding the system. Another $38 million is anticipated for a new State of Good Repair transit program, which is limited to capital improvements such as replacing vehicles and upgrading facilities. Examples of transit projects that could be in jeopardy include new zero-emission buses for AC Transit, new light rail vehicles for San Francisco Muni, “quality of life” improvements at BART to improve the safety and cleanliness of stations, and a new regional transit discount program for low-income transit riders. The amount of funding that was at risk for each Bay Area transit operator can be reviewed in this chart.

Congestion Relief Projects
Voters' defeat of Proposition 6 also closed potential funding gaps for many top priority congestion relief projects in the Bay Area. In its first award of competitive funds from new SB 1 programs, the CTC awarded Bay Area projects $660 million in funding, more than 25 percent of the statewide total. The region’s largest award was a $233 million commitment to Caltrans and the Santa Clara Valley Transportation Authority (VTA) through the Solutions for Congested Corridors program to establish express lanes along both directions of U.S. 101 between State Route 237 in Mountain View through San Mateo County to Interstate 380 near San Francisco International Airport. The CTC also awarded Caltrans $85 million through the Solutions for Congested Corridors program to complete the final Sonoma County portion of the multi-phase widening of U.S. 101 through the Marin-Sonoma Narrows. Review a complete list of Bay Area projects that were awarded competitive funding from SB 1.

Matching Funds for Voter-Approved Measures
Under SB 1, the Legislature revived a State-Local Partnership Program that rewards communities in which voters already have approved measures that dedicate funding for transportation. Because Bay Area voters have been such strong champions of transportation funding, the region does very well under this program, receiving 26 percent of the statewide total. For fiscal 2018-19, the Bay Area is estimated to receive $28 million in formula funding from this program, including almost $10 million as a result of voter-approved bridge toll measures and the remainder due to county sales tax measures and vehicle registration fees, and BART and AC Transit parcel taxes. Passage of Proposition 6 would have eliminated the only funding sources for the State-Local Partnership Program. 

SB 1 Background
In April 2017, the Legislature enacted Senate Bill 1, sponsored by San Jose Senator and former MTC Commissioner Jim Beall. The landmark transportation bill provides approximately $5 billion per year in ongoing state funding after decades of underinvestment by the state. The primary goal of SB 1 was to restore the condition of the state highway and local road systems, which face maintenance backlogs of $59 billion and $78 billion, respectively. While state and local roadway maintenance projects receive the vast majority of SB 1 funds, the law also provides vital new funding for enhanced travel options and congestion reduction, establishing a Corridor Mobility Improvement Program, a Trade Corridors Improvement Program and the Local Partnership Program that rewards local jurisdictions with voter-approved funding for transportation), plus funding increases for the existing Transit and Intercity Rail Capital, State Transit Assistance and Active Transportation programs.

SB 1 is funded by adjustments to roadway user fees assessed on gasoline, diesel fuel and motor vehicles. Proposition 69 – approved by 81 percent of voters in June 2018 – added a provision to the California Constitution ensuring that all SB 1 funding sources are protected from diversion to the General Fund or to any non-transportation purpose. New revenue measures contained in SB 1 include:

  • A 12-cent/gallon increase in the state’s gasoline excise tax. This amounts to an inflation adjustment to restore the purchasing power lost since the gas tax was last raised in 1994. 
  • A Transportation Improvement Fee, an annual vehicle registration surcharge which varies based on the value of the vehicle and depreciates over time.
  • A zero-emission vehicle registration surcharge of $100 per year
  • A 20-cent/gallon increase in the diesel excise tax
  • A 4 percent rate increase in the sales tax on diesel fuel

Proposition 6 would have repealed each of these sources of transportation revenue.

With passage of SB 1 in 2017, California has joined the ranks of 38 states both red and blue and the District of Columbia that have stepped up in the face of congressional inaction and passed legislation to raise their own state gas taxes since Congress last did so in 1993. When MTC plotted on a map the states voting to raise their gas tax, it reaffirmed that infrastructure investment can, and often does, transcend party lines, or as former US Congressman Norm Mineta used to say: "There is no such thing as a Democratic bridge or a Republican road." The largest transportation investment in state history, SB 1 will invest $52 billion in California's roads, bridges and transit systems over the next decade with ongoing annual revenues of over $5 billion per year thereafter. See MTC's map depicting the states that have enacted a gas tax since 1993.