Former House speaker Tip O’Neill is quoted as saying “all politics is local.” That is especially true when it comes to transit funding. There are, by mid-May, more than a dozen transit financing-related ballot measures that have already been confirmed for fall votes, while up to 30 more could join them, reports the Center for Transportation Excellence (CFTE), a Washington, D.C.-based public-transportation-oriented information clearinghouse.
These proposals could generate a large amount of transit investment: more than $55 billion alone for the measures that have the green signal to go in front of voters.
The key ones to watch for in 2008 are:
- A $42 billion package for transit and highways, to be built over 30 years in Arizona, which has been proposed by a coalition of Arizona business and political leaders, including Governor Janet Napolitano. The measure needs nearly 154,000 signatures to be placed on the ballot;
- A $10 billion bond issue to provide initial financing for a $42 billion high-speed rail line between the San Francisco Bay area and the Los Angeles basin, to be completed in 10 years;
- A possible sales tax increase to make up revenue shortfalls to implement voter-approved Measure A transit projects in the Santa Clara Valley (San Jose/Silicon Valley, Calif.). They include extending BART from Fremont; light rail expansion and new low-floor equipment; ACE and Caltrain commuter rail improvements; connections from San Jose International Airport to BART, Caltrain and light rail; and bus and paratransit upgrades.
- A financial analysis by the Valley Transportation Authority (VTA) reported that the current local sales tax revenue stream is insufficient to fund the projects. The VTA board will decide in September whether to seek more money from the voters or scale back the Measure A plans, which were approved in 2000;
- A 0.4 percent sales and use tax increase to finance a $63 million, 44-mile BRT system between Aspen, Carbondale and Glenwood Springs, Colo., implemented and managed by The Roaring Fork Transit Authority. If approved, the BRT could be rolling by 2015-2017.
Looking for voter approval
Several local transit systems hope to receive voter approval for stable or expanded financing sources, such as with dedicated property and sales taxes. Proposed new small city and rural transit systems are on ballots as well.
At least five approved and possible transit funding questions are second attempts. The proponents have gone back to adjust the proposals in the hopes of seeing them pass. The key ones include:
- A 25 percent sales tax increase to finance the Sonoma Marin Area Rail Transit (SMART), a 70-mile regional rail and trail project estimated to cost $450 million. A similar measure put to the voters in November 2006 narrowly failed to win the state-required two-thirds support. This time around the SMART proposal will include weekend service: the absence of which, research found, may have contributed to the measure’s defeat;
- Seattle-based Sound Transit (ST) may once again ask voters to approve light rail, commuter rail and regional bus expansion in the Puget Sound region, but this time it may offer them one or more choices.
In November 2007 the electorate derailed Proposition 1 that had coupled ST’s plan and Sound Transit 2 (ST2), which included 50 new miles of light rail plus commuter rail and express bus improvements priced at $11 billion, with $7 billion in highway expansion built over 20 years. Voters refused to approve a 0.6 cent increase in local taxes to help pay for the combined program.
ST2 would have followed Sound Move or “ST1,” passed by the voters in 1996, which had started up Sound Transit’s network.
In response, the ST board is considering putting forward ST2 without the highway expansion, plus two other choices featuring light rail and BRT expansions, and commuter rail improvements that would be constructed over 12 years. One plan would include 18 miles of light rail, cost $6.8 billion and require a 0.4 percent tax hike, while a slightly larger proposal would feature 23 miles of light rail priced at $7.8 billion that would need a 0.5 percent tax increase.
Both of the lower-scaled projects would have design engineering to build out the light rail in the Proposition 1 package; voters would presumably have to approve financing at the end of the 12 years to meet ST 2’s expansion goals.
The CFTE is very optimistic that most of the ballot measures will pass. The organization reports that Americans have voted for 88 percent of all transportation financing measures put to them over the past seven years.
“More Americans are using public transportation to beat the high cost of gas,” says CFTE spokesperson Bridget Hennessey, “and are willing to pay for transportation choices in their communities.”
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Answering challenges
To illustrate transit needs and the financial challenges faced in meeting them, it may be worthwhile to look at the Central Puget Sound region in Washington State, comprising of Seattle, Tacoma and Bellevue, as well as Everett, King, Pierce and Snohomish counties.
Continued population expansion — the Puget Sound Regional Council, the region’s planning organization, estimates that the area will reach nearly 4.6 million residents in 2040 from 3.1 million in 2000 — means more traffic congestion and pollution to a region that is already struggling to cope with high road demand and its consequences.
To provide an expanded transit system to handle this future growth, one that will draw people out of their cars, Sound Transit needs voters to approve sales tax increases to underwrite bond sales, which will finance approximately 40 percent of capital costs.
The challenge ST faces is devising the right package of routes and services at a price that the electorate will buy.
The region’s citizens have long been sharply divided between vocal pro- and anti-rail transit factions. Rail transit funding ballot measures also lost in 1962, 1968, 1970 and 1995, but won in 1996.
In response, ST is seeking community input before deciding which, if any, of the proposals and their specific details are placed on the ballot, through an online and face-to-face outreach program. It has also been informing the public of developments, such as new services and station openings.
Sound Transit has fine-tuned its cost-estimating process. It experienced cost overruns on the Link to SeaTac that forced the agency to defer two stations and which incurred bad publicity that may have also contributed to the Prop.1 defeat.
Sound Transit is also using real estate to help finance construction. It plans to sell off excess property acquired for the downtown SeaTac Link at federally required fair market value, save those parcels needed temporarily to stage an extension to the University of Washington.
ST is also participating in transit-oriented development projects on a case-by-case, opportunity by opportunity basis. These are win-win, because the agency obtains revenues from both property sales and higher ridership resulting from the developments.
These approaches appear to be gaining traction. A phone and Web survey, conducted in March 2008, revealed that over three-fourths of the transit district’s voters supported expanding the transit network.
“Again and again our region’s residents tell us we face an urgent need to expand mass transit,” said Sound Transit Board Chair and Seattle Mayor Greg Nickels, in announcing the options. “These train and bus service expansions respond to that urgent call in a way that is faster and more affordable.”
Different strategy
Metro Vancouver and the adjacent Fraser Valley, share a similar climate, geology, urban culture and population and influx, and resulting traffic and environmental consequences with the nearby Seattle/Central Puget Sound area. The Metro Vancouver/Fraser Valley region will see its population climb to 3.5 million by 2030 from 2.5 million in 2006.
TransLink, the region’s transit agency, and BC Transit in the central and east Fraser Valley, have been expanding rail and bus transit services in response to these needs. They are now preparing for major growth in the transit network, with a sizable share of the financing coming from the provincial government.
The Province of British Columbia’s $14 billion Provincial Transit Plan (PTP), announced in January 2008, will invest approximately $10.3 billion for two new rapid transit lines: the Evergreen Line and the UBC Line, an extension and upgrade to the Expo/Millennium Line and additional funds for BRT expansion. These projects will be finished by 2019/2020.
When these projects, along with the under-construction Canada Line, are complete, Metro Vancouver will have 60 miles of rail rapid transit, 94 miles of BRT and 40 existing miles of commuter rail. The expanded BRT network will be comprised entirely of new routes, with the existing ones being replaced by rail rapid transit.
Thanks to these investments, TransLink will see its market share grow to 22 percent by 2030 and 17 percent by 2020 from its current 12 percent. BC Transit will see a smaller increase in its area.
As a result, the PTP will reduce greenhouse gas emissions by at least 5 million tons between 2008 and 2020. Most of that benefit will be occurring in Metro Vancouver, where the bulk of the province’s population and traffic is situated.
The PTP will be financed by all government levels. The province will put in $4.75 billion into PT and has called for the Canadian federal government to kick in $3.1 billion.
That leaves TransLink to fund its share, which is $2.75 billion, and municipalities outside of TransLink’s service area to find money for theirs.
Assembling those resources means balancing needs, available money and the willingness of the electorate to finance a larger network.
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Voicing financing concerns
While TransLink’s situation lacks the often furious pro- and anti-rail transit election-styled debates surrounding the votes on Puget Sound transit plans, the local community there has not hesitated to express their concerns about transit financing issues.
Instead of a ballot box, these viewpoints have been presented directly and indirectly to the provincial government, which has the last say on transit, and has been actively involved in system planning, management and financing, since the early 1970s.
For example, the province cancelled a controversial parking tax in early 2008, which had raised $18 million annually for TransLink. The agency made up the shortfall by enacting a business levy and receiving higher revenues created by the new federal transit tax credit, greater-than-expected tax revenue from diesel fuel sales and internal cost savings.
On the other hand, the province opened new financing streams to TransLink. The agency can now raise an additional three-cent per liter fuel tax, which would generate approximately $66 million, but only if it raises an equal amount from increased property taxes and fares. TransLink recently enacted a 25-cent fare increase in January that will pull an additional $54 million annually.
Also, and potentially more significantly, the province now allows TransLink to acquire, assemble and sell real estate, including air rights at stations and park-and-ride lots, and disposing excess transit facilities, in partnership with local governments and developers.
This move will increase revenues from both property sales and from greater ridership by spurring higher-density transit-oriented development, thereby capturing rising resale values enabled by new transportation investments. TransLink estimates that the program will bring in approximately $30 million annually from property sales alone, plus farebox revenues.
“We are reaching the limits of our conventional fundraising, “explains TransLink Real Estate Division Vice President Philip Christie, “and we need to be more creative about raising revenues.”
Brendan B. Read is a freelance writer based in Ontario, Canada.
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