1 Introduction to Transportation Funding
3 Introduction to Tra nsportation Funding A Primer for Understanding Federal, State and Local Revenue Sources for Transportation.
4 Introduction to Tra nsportation Funding Overview Transportation in California is funded by a variety of federal, state and local revenue sources, which fall into the following three basic categories: User Fees Gas taxes (federal and state) Diesel fuel taxes (federal and state) Vehicle weight fees Tolls Public transit fares Property Access Charges Property taxes Benefit assessment districts Developer fees Subsidies Sales taxes Federal, state and local General Funds Externalized costs Together, these revenue sources produce roughly $23 billion a year for California s transportation system. Federal Federal transportation funding is generally apportioned to California based on the state s contribution of revenues derived from federal excise taxes on motor vehicle fuels to the Highway Trust Fund. These revenues pay mostly for capital improvements and expansion projects. In FY 2011, California received about $4.5 billion in federal transportation funds. This amount accounted for approximately 22 percent of the total funding for the state s transportation system. State Ongoing state transportation funding consists primarily of the state excise tax on gasoline and diesel fuel, and the state sales tax on diesel fuel. Additional state funding sources can include bond revenues and appropriations from the General Fund. In FY 2011, state dollars provided about $7 billion, or 30 percent, of the total funding for transportation in California. Local Local dollars for transportation are derived from a variety of revenue sources. These sources include a statewide 1/4 percent tax on the sale of all goods and services, additional optional local sales taxes that have been approved by county voters, property taxes, and public transit fares. In FY 2011, local funding totaled $11 billion, constituting roughly 48 percent of all revenues for transportation in California. Transportation Funding Breakdown in California Federal 22% State 30% Local 48% FY
5 Introduction to Transportation Funding Federal Funding Sources Federal transportation funding is generally provided according to a two-step process: (1) authorization; and (2) appropriations. Authorization Authorizing legislation provides the legal authority for the federal government to spend funds on programs within a particular public policy area, such as transportation, for a given period of time. Usually covering a period of five to six years, authorizing legislation sets the maximum amount of funding that may be appropriated for programs within a particular public policy area for each fiscal year of the authorization period. It also includes provisions governing the structure of the various programs within a particular public policy area. The current authorization bill for federal surface transportation programs is the Moving Ahead for Progress in the 21st Century Act (MAP-21). Appropriations Every year, Congress considers appropriations bills for all federal agencies, departments and programs, including one for transportation. These measures provide the legal authority for federal agencies to spend money during the upcoming fiscal year for the programs they administer. In developing these appropriations bills, Congress may allocate funding for programs within a particular policy area up to the maximum amount included in the related authorizing legislation, but no more. Highway Trust Fund The Highway Revenue Act of 1956 established the Highway Trust Fund to provide a dedicated source of revenues for transportation. The Highway Trust Fund is intended to be a pay-as-yougo system that uses receipts from excise taxes to fund federal surface transportation programs. In 1983, the Highway Trust Fund was divided into the Highway Account and the Mass Transit Account. Over the years, Congress has enacted multi-year legislation, such as MAP-21, authorizing federal spending for surface transportation programs from the Trust Fund. Receipts from highway user fees, including federal excise taxes on motor vehicle fuels (gasoline, diesel and special fuels) and truck-related taxes (truck and trailer sales, truck tires, and heavy vehicle use), are transferred from the General Fund to the Highway Trust Fund. The current federal gas tax rate is 18.4 cents per gallon. Of this amount, 0.1 cent is deposited into the Leaking Underground Storage Tank Trust Fund. Of the remaining 18.3 cents, cents is deposited into the Highway Account and 2.86 cents into the Mass Transit Account. 3
6 Distribution of Federal Gas Tax Revenues MAP-21 Highway Trust Fund 18.4 cent federal gas tax 80% 20% Highway Account Mass Transit Account Federal-Aid Highway Programs Flexible Funding Programs Transit Programs Some General Fund Dollars MAP-21 On July 6, 2012, President Barack Obama signed into law H.R. 4348, better known as the Moving Ahead for Progress in the 21st Century Act (MAP-21). This legislation authorizes federal surface transportation programs for two years, covering FY 2013 and FY MAP-21 took effect on October 1, 2012, and runs through September 30, For FY 2013 and FY 2014, MAP-21 authorizes surface transportation programs at current funding levels, with a small adjustment for inflation, for a two-year total of $105 billion. For federal-aid highway programs, this means $ billion in obligational authority in FY 2013 and $ billion in FY In the case of public transit, MAP-21 provides $ billion in FY 2013 and $ billion in FY In addition, the legislation extends the federal government s authority to collect motor vehicle fuel excise taxes through September 30, 2016, and truck excise taxes through September 30, By extending the authorization to collect these excise taxes beyond the two-year period covered by the bill, MAP-21 provides additional stability in terms of the revenue sources that are dedicated to the Highway Trust Fund. 4 The roughly $21.2 billion gap between projected Highway Trust Fund revenues and MAP-21 s $105 billion authorized spending level is covered through a number of sources, primarily by using the revenues and savings that would be realized through changes to federal law pertaining to pensions for both public- and private-sector employees, and by tapping into the portion of the federal gasoline excise tax that currently goes to the Leaking Underground Storage Tank Trust Fund. However, these are only short-term solutions that make a two-year bill work. Thus, MAP-21 does not address the long-term solvency of the Highway Trust Fund. In fact, the Congressional Budget Office (CBO) has noted that both the Highway and Mass Transit Accounts in the Highway Trust Fund will face new deficits starting in FY 2015.
7 Introduction to Transportation Funding MAP-21 includes important policy and structural changes to federal surface transportation programs. In the case of the Highway Title, MAP-21: Collapses 90 separate funding programs into 30. Dedicates more than 92 percent of highway contract authority to the following six core programs: (1) National Highway Performance Program; (2) Surface Transportation Program (STP); (3) Highway Safety Improvement Program; (4) Congestion Mitigation and Air Quality Improvement Program (CMAQ); (5) Metropolitan Planning; and (6) Transportation Alternatives Program. Eliminates earmarks. Introduces the use of performance metrics to drive states and metropolitan areas to target federal resources to projects that would improve the condition and performance of their multimodal transportation assets. Reforms various federal processes in order to expedite project delivery for both highway and public transit projects. The changes to the Transit Title are aimed at providing more predictable and stable funding for public transit agencies by: Eliminating discretionary programs where funds were historically earmarked by Congress. Cutting back on the number of competitive grant programs administered by the U.S. Department of Transportation. Pushing more money through the formula programs. Federal-Aid Highway Programs With a few exceptions, federal-aid highway funds are apportioned to the states based on each state s share of total federal-aid highway funds received in FY 2012, and are programmed for projects through processes determined by the states. MAP-21 requires adjustments to be made to the apportionments to guarantee that each state receives a minimum return of 95 percent of the amount of federal excise tax revenues that it contributes to the Highway Account. The major federal-aid highway programs are as follows: National Highway Performance Program MAP-21 consolidates the old Interstate Maintenance, National Highway System and Highway Bridge Programs into a new National Highway Performance Program that focuses on the most critical 161,000 miles of roadways and bridges in the United States. The aim of this new formula program is to improve conditions and performance on these facilities, with an emphasis on state 5
8 of good repair. MAP-21 directs the Transportation Secretary to conduct a rulemaking to establish performance standards for the minimum condition of pavement and bridges on the National Highway System, and requires states to develop risk-based asset management plans for these facilities. States that fail to meet these standards over time would be required to spend a portion of their National Highway Performance Program funding to address the deficiencies. California s share of these funds will be programmed for State Highway Operation and Protection Program (SHOPP) projects, as well as through the State Transportation Improvement Program (STIP) process. Highway Safety Improvement Program This formula program provides federal resources to states for infrastructure improvements on public roadways that achieve a significant reduction in traffic fatalities and serious injuries. Under the provisions of MAP-21, states would be required to meet safety performance targets over time and to spend a portion of these funds to address any deficiencies if the targets are not met. The bill also requires an annual set-aside of $220 million for highway-railroad grade crossing projects. California s share of these funds is primarily programmed through the SHOPP. Projects of National and Regional Significance Program Under this program, funds are provided by the U.S. Department of Transportation on a competitive basis for major projects of national and regional significance that meet rigorous criteria and eligibility requirements. Transit Capital Investment Programs The major programs that fall under this category are as follows: Fixed Guideway New Starts and Extensions These discretionary funds are primarily for major rail expansion, core capacity and bus rapid transit projects. Candidate projects for these funds must go through a comprehensive evaluation process and get rated by the Federal Transit Administration (FTA). Based on this process, FTA recommends the projects to be funded during the upcoming fiscal year. A 20 percent local match is required, although most public transit agencies provide a higher local match to make their projects more competitive for these funds. In the past, VTA has received New Starts money for the Guadalupe and Tasman West Light Rail Projects, and currently is receiving these funds for the BART Silicon Valley Project. 6 Small Starts These discretionary funds are for smaller New-Starts-eligible projects with a federal share of less than $75 million. Eligible projects include streetcars, trolleys, bus rapid transit, and commuter rail.
9 Introduction to Transportation Funding Projects cannot cost more than $250 million in order to be eligible for funding under this program. Candidate projects for Small Starts funding also must go through an evaluation process administered by FTA. Transit Formula Programs The major programs that fall under this category are as follows: Urbanized Area Formula Program These funds are allocated to public transit providers in urbanized areas (UZAs) through a complex formula that takes into consideration various transit service factors and can be used for any transit capital purpose. However, the use of UZA formula funds for public transit operations varies, depending on the population of a particular UZA. These dollars cannot be used for operating assistance in UZAs with more than 200,000 people. On the other hand, public transit systems in UZAs with less than 200,000 people and small operators (less than 15 buses) in UZAs with more than 200,000 people can use their formula funds for either operating or capital needs. Under the provisions of MAP-21, these formula funds can be used for preventive maintenance in all UZAs. They also can be used for paratransit services required by the federal Americans with Disabilities Act (ADA), provided that the amount of UZA formula funds dedicated for this purpose does not exceed 10 percent and provided that the public transit operator is in full compliance with ADA. In UZAs with more than 200,000 people, MAP-21 requires 1 percent of UZA formula funds to be spent on transit enhancements. The types of projects that qualify as transit enhancements are: (1) the preservation, rehabilitation and operation of historic transit structures and facilities; (2) bus shelters; (3) landscaping; (4) public art at transit stations; (5) pedestrian access and walkways; (6) bicycle access; (7) public transit connections to parks; (8) signage; and (9) enhanced access to public transit for persons with disabilities. For the most part, UZA formula funds that are used for public transit capital purposes require a 20 percent local match. However, capital projects that meet ADA or federal Clean Air Act mandates require only a 10 percent local match. Operating assistance funds to UZAs with less than 200,000 people require a dollar-for-dollar match. On average, VTA receives approximately $40 million-$45 million per year in UZA formula funds, depending on federal appropriations levels. Typically, VTA uses these dollars for preventive maintenance, as well as for such capital projects as purchasing new buses, upgrading our public transit communications system, making improvements to our bus maintenance facilities, and constructing public transit centers and park & ride lots. State of Good Repair Program These funds are distributed by formula to UZAs for rehabilitation and enhancement projects related to existing rail systems. On average, the San Jose UZA receives approximately $20 million-$25 million per year, depending on federal appropriations levels. The funds are shared by VTA and the Caltrain Commuter Rail Service. VTA uses its portion to rehabilitate and upgrade our light rail system. A 20 percent local match is required. 7
10 Bus and Bus Facilities Program These funds are distributed by formula to UZAs for the purchase of buses, and for the construction or upgrading of bus facilities. VTA uses its share, which is approximately $3 million- $5 million a year, primarily for buying new buses. A 20 percent local match is required. Rural Area Formula Program These funds are allocated to public transit operators that are not in a UZA. In California, Caltrans is responsible for administering these funds as directed by the California Transportation Commission (CTC). VTA does not receive these funds. Elderly and Persons with Disabilities Formula Program These funds are allocated to public transit agencies and non-profit organizations to provide transportation services to elderly and disabled individuals who cannot use or do not have access to public transit systems. The money also can be used for new transportation services beyond those required by ADA for individuals with special mobility needs. The funding is allocated to UZAs based on a formula that takes into consideration senior and disabled populations, with 60 percent going to UZAs with a population of more than 200,000, 20 percent to UZAs with a population of less than 200,000, and 20 percent to rural areas. Roughly $1 million per year is available to VTA, depending on federal appropriations levels. As VTA s paratransit broker, Outreach, Inc., is the principal recipient of these funds locally. Miscellaneous Transit Programs Other programs included under the Transit Title of MAP-21 are as follows: Metropolitan Planning This program consists of funding for federally required planning studies that justify the need for public transit-related equipment and facilities. VTA receives an annual amount of funding under this program for the preparation of our Short Range Transit Plan (SRTP). Innovative Public Transportation Workforce Development Program MAP-21 created this new program to provide competitive grants for innovative workforce development and human resources activities within the public transit industry. Public Transit Emergency Relief Program Created under MAP-21, this new transit program is patterned after an existing program for highways and includes an open-ended General Fund authorization for such sums as necessary. It is designed to help states and public transit agencies pay for protecting, repairing or replacing equipment and facilities that have suffered, or are in danger of suffering, serious damage as a result of an emergency. Flexible Funding Programs Federal flexible funds can be used for highways or public transit. These funds are allocated to states on a formula basis. A portion is then suballocated to the Metropolition Planning Organizations (MPOs) for programming at the regional level. The major programs that fall under this category are as follows: 8
11 Introduction to Transportation Funding Surface Transportation Program (STP) This flexible funding category under the Highway Title provides money for roadway, highway, bridge, and public transit capital improvement projects. States must allocate at least 50 percent of their STP funds to the MPOs according to a formula that is based on population. Acting in its role as the congestion management agency (CMA) for Santa Clara County, VTA is responsible for submitting to the Metropolition Transportation Commission (MTC) a prioritized list of projects for our share of STP funds, which amounts to about $8 million-$15 million per year, depending on federal appropriations levels. Congestion Mitigation and Air Quality Improvement Program (CMAQ) This is another category of flexible funds under the Highway Title. CMAQ funds, which are programmed by the MPOs, are available to urbanized areas that have not attained the ozone, carbon monoxide or particulate matter air quality standards established under the federal Clean Air Act; or that have been designated as maintenance areas for ozone, carbon monoxide or particular matter. The funds may be applied to projects and programs that will contribute to the attainment of these air quality standards. Santa Clara County receives approximately $5 million-$10 million in CMAQ funds per year, depending on federal appropriations levels. Similar to STP dollars, VTA is responsible for submitting Santa Clara County s prioritized list of projects for CMAQ funds to MTC. Transportation Alternatives Program MAP-21 consolidates the Transportation Enhancements, Safe Routes to School, Recreational Trails, and Scenic Byways Programs into a new Transportation Alternatives Program. Under this new program, 50 percent of the funding is allocated to the MPOs and 50 percent to the states. State Funding Sources Overview A large portion of transportation funding in California is collected at the pump. In the case of gasoline, revenues for transportation are collected in the following manner: 18 cents in state excise taxes for each gallon purchased. This is considered to be the base rate cents in state excise taxes for each gallon purchased. This increment of the state excise tax was imposed in 2011 to compensate for exempting gasoline from the state sales tax. It gets adjusted on an annual basis, so that the money generated is equivalent to the amount that would have been raised had the state sales tax still applied to gasoline cents in federal excise taxes for each gallon purchased. Local sales taxes. Gallon of Gasoline Base Price + Federal Excise Tax (18.4 ) + State Excise Tax (35.3 ) + Local Sales Taxes Gallon of Diesel Base Price + Federal Excise Tax (24.4 ) + State Excise Tax (13.6 ) + State Sales Tax (6.75 ) + Local Sales Taxes 9
12 For diesel fuel, the following applies: 13.6 cents in state excise taxes for each gallon purchased. If the state sales tax rate for diesel fuel gets changed, this rate is adjusted accordingly to ensure that there is not a net increase or decrease in taxes for consumers at the pump cents in federal excise taxes for each gallon purchased. State and local sales taxes State Highway Account Revenues generated from federal and state gasoline and diesel fuel taxes, and from vehicle weight fees are deposited into the State Highway Account. Vehicle weight fee revenues are then transferred to the General Fund to pay for debt service on general obligation bonds that have been issued for transportation purposes. Of the remaining balance in the State Highway Account, funds for Caltrans administration; maintenance of the state highway system; and rehabilitation, safety and seismic retrofit projects related to the state highway system identified in the State Highway Operation and Protection Program (SHOPP) are taken off the top. Any remaining funds are then programmed through the State Transportation Improvement Program (STIP). The STIP, which is adopted during even numbered years by the California Transportation Commission (CTC), outlines the cost and schedule estimates for all transportation capital improvement projects funded with fuel tax revenues from the State Highway Account. Any transportation capital improvement project is eligible for funding through the STIP, including the construction of fixed guideway mass transit projects. However, public transit vehicle purchases and operations are not eligible expenditures under the STIP because Article XIX of the California Constitution prohibits the use of fuel tax revenues for these purposes. State Highway Account Sources of Funds Programs Funded State highway maintenance, operations and planning State and federal fuel taxes State Highway Account State Highway Operation and Protection Program (SHOPP): Safety and rehabilitation projects on the state highway system State Transportation Improvement Program (STIP): 75% Regional 25% Interregional 10
13 Introduction to Transportation Funding State Transportation Improvement Program (STIP) SB 45 (Kopp), which was enacted into law in 1997, brought about various changes to the process for programming transportation dollars through the STIP. In general, this legislation simplified the programming process by consolidating nine separate state transportation funding pots into two broad categories: (1) the Regional Transportation Improvement Program (RTIP); and (2) the Interregional Transportation Improvement Program (ITIP). In addition, SB 45 devolved a significant amount of programming responsibility from the CTC to the regional transportation planning agencies (RTPAs), such as MTC in the Bay Area. The bill also shortened the STIP from a sevenyear program to a four-year program, although a subsequent measure changed the length of the STIP to five years. Under SB 45, the RTPAs have programming responsibility for 75 percent of available STIP funds through their RTIPs. Of this amount, 60 percent flows to the counties in Southern California and 40 percent to the counties in Northern California. This formula is known as the north-south split. The RTPAs then select projects to include in their RTIPs consistent with county guarantees. County guarantees, a formula calculation based on population and center lane highway miles, ensure that individual counties receive their fair share of STIP dollars. VTA s annual county guarantee amount can range from $30 million to $60 million, depending on the amount of STIP funding that is available. Projects that are eligible to be programmed at the regional level include: (1) state highways; (2) local streets and roads; (3) rail and other public transit capital improvements; (4) bicycle and pedestrian facilities; (5) grade separations; (6) transportation system management activities; (7) soundwalls; and (8) intermodal facilities. Under the provisions of SB 45, the RTIPs must be State Transportation Improvement Program (STIP) STIP Programming Process 75% Regional 25% Interregional 60% to south 40% to north RTPAs select projects for their RTIPs consistent with county guarantees. County guarantees are based on population and center lane highway miles 2.25% Intercity Rail 15% Interregional Roads in Rural Areas No geographic balance 10% Projects of Statewide Significance Subject to north/south split; county guarantees do not apply RTPAs present their RTIPs to the CTC CTC approves or disapproves RTIPs in their entirely RTPAs = Regional Transportation Planning Agencies RTIPs = Regional Transportation Improvement Programs CTC = California Transportation Commission Nominated by Caltrans with input from RTPAs and programmed by the CTC 11
14 submitted to the CTC for inclusion in the STIP. However, the CTC cannot modify an RTIP. The commission can only accept or reject an RTIP in its entirety. The state retains programming responsibility for the remaining 25 percent of available STIP dollars through the ITIP. This program is intended to fund: (1) projects that facilitate the interregional movement of people and goods; (2) projects that are considered to be of statewide significance; (3) projects on the interregional road system that are outside the boundaries of the urban areas; and (4) intercity rail capital improvements. These projects are nominated by Caltrans with some input from the RTPAs and are programmed by the CTC. State Highway Operation and Protection Program (SHOPP) The SHOPP is a five-year program of projects adopted by the CTC separately from the STIP. These funds are used for safety, rehabilitation, seismic retrofit, bridge replacement, landscaping, and operational improvement projects on the state highway system. SHOPP funding is derived from both state and federal fuel taxes. VTA does not receive SHOPP funds. Transportation Development Act (TDA) Enacted in 1971, TDA allows each county in California to elect to impose a ¼ percent sales tax to be collected by the state Board of Equalization and returned on a pro rata basis for public transportation purposes. TDA funds are apportioned by the state through the RTPAs to each participating county based on the amount collected within the county. In Santa Clara County, TDA funds are allocated as follows: 90 percent to VTA for public transit operating purposes. This amounts to approximately $80 million per year. 5 percent, or about $4 million per year, to VTA in the form of TDA Article 4 funds for community and paratransit services. 2 percent in the form of TDA Article 3 funds for bicycle and pedestrian projects, which are sponsored by a city or the county, and are prioritized by VTA. Santa Clara County receives approximately $1.5 million per year in TDA Article 3 funds. 3 percent, or approximately $2.3 million per year, retained by MTC for administration and planning purposes. Public Transportation Account (PTA) Revenues in the PTA are derived from the sales tax on diesel fuel. These revenues are allocated as follows. In the case of the amount generated by the base sales tax rate for diesel fuel of 4.75 percent, half goes to the State Transit Assistance Program (STA), which provides funds primarily for public transit operating and capital purposes. The remaining 50 percent is used to fund: Mass transit planning activities of Caltrans and the CTC. 12
15 Introduction to Transportation Funding Public Transportation Account PTA Sales tax on diesel fuel Amount Exceeding Base Rate Base sales tax rate of 4.75% State Transit Assistance Program (STA) 50% 50% State Transit Assistance Program (STA) T Caltrans transit administration and planning California Transportation Commission transit planning California High-Speed Rail Authority Public Utilities Commission for rail safety Intercity rail for operating and capital purposes Developmentally disabled transportation services Passenger rail safety responsibilities of the California Public Utilities Commission (CPUC). Operating costs of the state s intercity rail system. Rolling stock acquisition and other capital projects for intercity rail. California High-Speed Rail Authority, which was created through legislation passed in 1997 to oversee the development of the state s proposed high-speed train system. Transportation for the clients of the state s regional occupational centers. This portion of PTA revenues also can be used to fund transit capital improvement projects, including public transit vehicle purchases, that are programmed through the STIP process. With regard to PTA revenues derived from the state sales tax rate for diesel fuel above the base of 4.75 percent, 100 percent goes to STA. State Transit Assistance Program (STA) STA funds are apportioned to the RTPAs according to a formula based on population and annual transit operator revenues, and are then distributed by these agencies to the various public transit operators within their regions. 13
16 In the Bay Area, MTC usually receives about 38 percent of the state s available STA funds per year. MTC allocates the revenue-based funds to public transit operators in the region on a formula basis. Historically, VTA s annual share has ranged from about $5 million to as high as $16 million. The distribution of the population-based funds is at MTC s discretion. Proposition 1B: Transportation Bonds In November 2006, the voters of California approved Proposition 1B, which authorizes the state to issue $ billion in general obligation bonds for transportation purposes over a 10-year period, subject to annual appropriations by the Legislature. The proceeds from the sale of these bonds fund a combination of: (a) existing programs, such as the STIP and SHOPP; and (b) several new programs designed to address some of California s emerging transportation needs, such as goods movement, corridor mobility and public transit security. The method for distributing the bond proceeds from Proposition 1B varies by program category. In some cases, such as the STIP and SHOPP, the funding gets allocated to projects in accordance with processes in existing law. In other cases, such as the State-Local Partnership Program and public transit security, the Legislature defined the process for allocating the funds. And some programs, such as the Corridor Mobility Improvement Account (CMIA) and the Trade Corridors Improvement Fund (TCIF), were designed to be competitive in nature, with the CTC selecting the projects to be funded based on guidelines and a set of performance criteria. The major Proposition 1B program categories are as follows: Corridor Mobility Improvement Account (CMIA) This competitive grant program administered by the CTC provides $4.5 billion for projects that are designed to improve mobility in highly congested highway corridors. Trade Corridors Improvement Fund (TCIF) This competitive grant program provides $2 billion for infrastructure improvements along federally designated Trade Corridors of National Significance and along other corridors with a high volume of freight movement. It is administered by the CTC. No projects in Santa Clara County were selected by the CTC for funding under this program. STIP and SHOPP Augmentations Proposition 1B provides $2 billion to be programmed through the existing STIP process and $500 million for the SHOPP. Santa Clara County CMIA Projects 1. I-880 HOV lanes between Milpitas and San Jose = $72 million. 2. U.S. 101 improvements between Mountain View and the San Mateo County line = $85 million. 3. U.S. 101 improvements in the Evergreen area of San Jose = $54 million. 4. I-880/I-280/Stevens Creek Boulevard Interchange Improvements = $31 million. 14 Public Transportation Modernization, Improvement and Service Enhancement Account (PTMISEA) This formula program provides $3.6 billion to public transit operators for the following: (a) rehabilitation, safety or modernization improvements; (b) capital service enhancements or expansions; (c) new capital projects; (d) bus rapid transit improvements; and (e) bus and rail car procurement, rehabilitation or replacement. VTA s formula share under this program is approximately $125 million.
17 Introduction to Transportation Funding State-Local Partnership Program This formula program provides $1 billion to local and regional entities with voter-approved sales taxes, tolls or property taxes for transportation purposes. VTA s formula share under this program is roughly $47 million. Transit System Safety, Security and Disaster Response Account (TSSSDRA) This formula program provides $1 billion to public transit operators for: (a) capital projects that increase protection against a security or safety threat; and (b) capital expenditures to increase the capacity of public transit operators to develop disaster response transportation systems that can move people and goods, as well as emergency personnel and equipment, in the aftermath of a disaster. VTA s formula share under this program is about $24 million. Highway-Railroad Crossing Safety Account This competitive grant program administered by the CTC provides $250 million for the completion of high-priority grade separation and railroad crossing safety improvements. VTA, in partnership with the city of Fremont, received $19.6 million under this program for two grade separation projects: (1) Warren Avenue = $9.6 million; and (2) Kato Road = $10 million. Both of these projects will facilitate the implementation of the BART Silicon Valley Project. Local Streets and Road Improvement, Congestion Relief, and Traffic Safety Account This formula program provides $2 billion to cities and counties for local street and road maintenance and improvement projects. Of this amount, $1 billion gets allocated to counties based on vehicle registrations and maintained county road miles, and $1 billion to cities based on population. However, in the case of the cities share, each jurisdiction is guaranteed a minimum amount of $400,000, regardless of population. Local jurisdictions within Santa Clara County collectively will receive about $92 million under this program. The following chart summarizes the program categories under Proposition 1B: Transportation Fund for Clean Air Program (TFCA) TFCA was established in 1991 through the enactment of AB 434 (Sher), which increased vehicle registration fees in the Bay Area by $4 to fund projects and programs that help reduce vehicle emissions. Eligible projects include: (1) ridesharing; (2) clean-fuel vehicles; (3) signal synchronization; (4) regional transit information systems; (5) congestion pricing; and (6) bicycle facilities. 15
18 TFCA funds in the Bay Area are distributed as follows: Proposition 1B Program Category Public Transit Capital 1 Intercity Rail Corridor Mobility 2 State Route 99 State Transportation Improvement Program (STIP) State Highway Operation and Protection Program (SHOPP) 3 State-Local Partnership Program Goods Movement 4 Air Quality: School Bus Diesel Retrofit Transit Safety, Security and Disaster Response Local Bridge Seismic Retrofit Highway-Railroad Grade Separations Local Streets and Roads 5 Total Amount $3.6 billion $400 million $4.5 billion $1 billion $2 billion $750 million $1 billion $3.1 billion $200 million $1 billion $125 million $250 million $2 billion $ billion Notes: 1. Distributed to public transit operators throughout California according to the existing State Transit Assistance Program (STA) formula. 2. Projects were selected by the California Transportation Commission (CTC) pursuant to the north/south split formula. 3. Of the $750 million provided, $250 million is dedicated to intelligent transportation system (ITS) improvements on local streets and roads. 4. Of the $3.1 billion provided, $2 billion is for improvements to key trade corridors in California, $1 billion for goods movement air quality improvements and $100 million for port security. 5. Of the $2 billion provided, $1 billion gets allocated to counties based on motor vehicle registrations and county-maintained road mileage, and $1 billion to cities based on population. 60 percent allocated on a competitive basis by the Bay Area Air Quality Management District (BAAQMD). The air district programs approximately $10 million per year in TFCA 60 percent funds. 40 percent administered by a program manager selected in each county. VTA is responsible for programming TFCA 40 percent funds in Santa Clara County, which total about $2 million per year. Local Funding Sources Counties may place a sales tax measure for transportation purposes on the ballot for voter approval. With federal and state funding historically being insufficient to meet all of California s mobility needs, local sales tax revenues have provided more than 50 percent of new capital funding for the state s transportation infrastructure over the last several decades. Counties representing more than 85 percent of the state s population currently have in place local sales taxes for transportation purposes. Most of these taxes are temporary in nature and will expire if they are 16
19 Introduction to Transportation Funding not renewed by the voters. In 1995, the California Supreme Court ruled in Santa Clara County Local Transportation Authority vs. Guardino that a two-thirds majority vote is required to renew existing or to enact new local transportation sales taxes. This case involved a half-cent, local sales tax that was passed by a 54 percent majority vote in Santa Clara County in The tax was intended to be imposed for 20 years in order to fund a set of transportation capital improvement projects. Under this program, approximately 90 percent of the money was proposed to be used for public transit improvements, including the construction and operation of several new light rail lines. However, the Supreme Court ruled that the program constituted a special tax and, therefore, needed a twothirds, not a simple majority, vote for approval. As a result of the court s decision, the tax was invalidated, and the program was never implemented. Currently, Santa Clara County has three local transportation sales taxes in place. One is permanent and two are temporary Measure A In 1976, the voters of Santa Clara County approved a half-cent, local sales tax known as Measure A to fund public transit operations. This sales tax, which is permanent, provides more than 50 percent of VTA s public transit operating budget. On average, these revenues total about $160 million per year, depending on the economy Measure A Transit Improvement Program In 2000, VTA s Board of Directors placed a half-cent, local transit sales tax on the ballot, which was approved by more than 70 percent of the vote. This tax took effect in April 2006 and will be imposed for a 30-year period ending in March All of the revenues generated by this tax will be used for public transit capital improvement projects and operations Measure B By a two-thirds majority, Santa Clara County voters approved Measure B in November 2008, a 30-year, 1/8-cent local sales tax dedicated solely for funding the operating and maintenance costs associated with the BART Silicon Valley Project. The 2008 Measure B sales tax took effect in July
21 NOTES: Linking Land Use with Transportation
23 Linking Land Use with Transportation