Reliable Transport Funds Required

According to the 2006 Mobility Project by the Reason Foundation, Los Angeles ranked number one among the most congested cities in the U.S., beleaguered by the nation’s worst Travel Time Index (TTI) of 1.75, meaning that driving times during L.A.’s peak traffic hours are 75 percent longer than during off-peak hours. The study projected that, without mitigation, TTI will increase to 1.94 by 2030. It was suggested that the addition of approximately 3,700 new lane-miles, at an estimated cost of $67.7 billion, would be needed to significantly reduce congestion and accommodate expected growth through 2030. Statewide estimates suggest a need for the addition of 13,100 new lane-miles at an estimated cost of $122 billion. When I look at these numbers they appear overwhelming, especially when considering that in 2006 when the voters approved $19.9 billion of bonds to fund much-needed transportation infrastructure, most of us thought that was a huge amount. The fact is that the bonds we approved represent less than 20 percent of the amount that was and is truly needed. Why weren’t we asked to approve $122 billion of transportation infrastructure bonds? The main reason is that California couldn’t afford the additional debt service without a significant increase in taxes or possibly a combination of taxes and user fees. Additionally, with the passage of the package of infrastructure bonds, which totaled more than $30 billion (of which $19.9 represented transportation funds) California substantially maxed out its ability to borrow without endangering its bond ratings which would result in higher interest costs. Traffic conditions in and around Los Angeles certainly aren’t improving. It seems that no matter what time of day or night I use the freeways, traffic is bumper-to-bumper. Even the carpool lanes are experiencing difficulties. Last week there were two days when I needed to drive long distances on the freeways. The first day I thought I could avoid the serious traffic because I was driving my authorized clean air vehicle and was able to use the carpool lane. But instead of avoiding traffic, I experienced the height of irony. As I smugly proceeded to drive in the designated lane, I came to an abrupt stop. There was a multiple car collision in the car pool lane. The second day I thought I was safe because I thought it couldn’t happen on two consecutive days. Guess what? I was wrong. It did. I’m beginning to think that the car pool lanes are where all of the collisions occur. Traffic congestion is not just a nuisance. It is costly and unhealthy. When people are stuck on the freeway their ability to get to work on time is severely hampered. Then, when they finally arrive at work, they are stressed, causing health and productivity issues. Additionally, the more time one spends in traffic, the greater the chance of ill effects from exhaust fumes. Traffic congestion also has a major negative impact on the ability to attract and retain businesses. Californians, especially those in Los Angeles County, have been plagued by traffic congestion for many years. Now, traffic congestion has become a front-burner issue for Assemblyman Mike Feuer (D-Los Angeles) who recently introduced a package of transportation bills including several designed to provide local control over the sources and uses of transportation funds. It is clear that federal and state transportation funds are not reliable sources for the needs of Los Angeles County and Southern California, in general. It seems that each time new state bond measures are passed to provide these funds, or federal transportation funds are received at the state level, the amounts ultimately received by our localities are far less than anticipated and needed. Assemblymember Feuer’s bills (highlighted below) will enable us to raise our own funds locally for our own benefit. Here are the bills: AB 2321: Existing law authorizes the Los Angeles County Metropolitan Transit Authority (MTA) to impose (subject to voter approval) a transactions and use tax at the rate of 0.5% for 6 & #733; years or less for the funding of specified transportation-related capital projects or programs. This bill extends the time period from 6 & #733; to 30 years and designates numerous capital projects (consisting of light rail, transit corridors and rapid-ways, highway enhancements, etc.) and capital programs (consisting of grade separations, road resurfacing and reconstruction, soundwall construction, Metrolink capital improvements, etc.). The designated projects are throughout Los Angeles County (only) and must be completed. It is estimated that revenues received over the 30 years will be approximately $30 billion. AB 2558: This bill authorizes MTA to impose a countywide or regional carbon emissions fee (subject to voter approval) to be imposed either as a vehicle fuel tax or a vehicle fee. Fee revenues would be used for public transit and congestion management projects and programs in Los Angeles County. ACA 10: This bill (a constitutional amendment, subject to voter approval) lowers the vote threshold for approval of bonds for local transportation projects from two-thirds popular vote to 55% so that 1/3 (plus 1 vote) of the voters cannot block a local project that is desired by 2/3 (less 1 vote) of the voters. The New York City Council recently voted to urge the New York Legislature to vote in favor of Mayor Bloomberg’s plan to give the City the authority to charge a congestion fee to vehicles entering Manhattan south of 60th street. Both the Bloomberg plan and the Feuer bills can be considered methods of “congestion pricing.” I believe that it’s time for us to stop complaining about the congestion problem and to act on it. Perhaps congestion pricing is the best approach and, for us, the Feuer bills may represent the best method. Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lippe, Hellie, Hoffer & Allison, LLP; chairman of the Valley Industry and Commerce Association and a director of First Commerce Bank.