OCTA CEO: Transportation funding facing a changing landscape

Posted on April 27, 2011 by Will Kempton

In 1956, President Dwight D. Eisenhower signed the Federal Aid Highway Act, a bill that made it easier for Americans to connect, from the Liberty Bell to the Golden Gate Bridge and the Windy City to the Big Easy.

That legislation marked the first time in U.S. history the federal government assumed a greater role in providing transportation infrastructure to the nation. Funded through the federal gas tax, — previously used to help balance the budget — the Highway Act provided a dedicated and reliable revenue stream to build the interstate highway system.

Constructing the system proved to be an economic boom for the country. However, the success was fleeting because the federal gas tax was insufficient to meet the nation’s growing travel needs. Starting in the 1970s, federal gas tax revenues declined as the nation experienced the first fuel crisis. This led many states to impose their own or raise existing gas taxes to keep pace with dwindling revenues and rising costs.

Gas taxes do not grow with the economy and are an unreliable source of revenue for transportation projects and programs. Today, the issue has become more alarming as improved fuel efficiency of new cars is causing less fuel to be consumed per mile, resulting in less fuel tax collected.

Although the federal government recently passed a continuing resolution to keep federal funds flowing until the end of September, the outlook for transportation funding is bleak. 

The situation is similar at the state level given the struggle with lower sales tax revenue. We can anticipate a further decline in transportation funding from the federal and state governments.

The devolving role of the federal and state government has resulted in local governments stepping up to maintain and expand our transportation infrastructure.

Self-help counties, those with local sales-tax measures, are a saving grace for many regions where keeping up with the pace of growth is proving to be a continuing challenge.

The diminishing funds available from federal and state transportation sources gave way to the emergence of self-help counties in the early 1980s. Here in California, for example, 19 self-help counties now encompass 81 percent of the population and provide more than $4.2 billion annually for local transportation improvements.

And in Orange County, Measure M, the half-cent sales tax for transportation improvements, changed the landscape of transportation in Orange County by adding 192 freeway lane miles, improving 170 intersections and 38 freeway interchanges, and implementing commuter-rail throughout the county.

For counties with a strong tax base, local sales-tax measures have proven to be a successful model, but it is not the only solution. There needs to be a unified approach including local, state, federal and private dollars that responds to the fluctuations in the economy while paving the way for long-term growth and stability. In addition, we need to make the development process more efficient to deliver projects faster and reduce costs.

The Federal Aid Highway Act bridged the gap between the four corners of the U.S., but today the challenge lies with preserving that connection and preparing our transportation system to meet the needs of future generations.

In case you missed it...

Read our METRO blog, "California: the last hope for high-speed rail" here.

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