User Fees, Taxes Eyed for Funding Of Transit Plans

Staff Reporter

With budgets strained in Washington and Sacramento, local transit and planning officials are looking at motorists and freight haulers as funding sources for local transportation projects.

The idea is to levy user fees on railroad companies and truckers to pay for major improvements to the region's rail and truck routes. Transportation planners are also lobbying Sacramento to make it easier for L.A.-area voters to approve increases in gas and sales taxes to fund local projects.

"If Sacramento can't or won't raise funds at the statewide level for these vital projects, they should at least give us the option here in L.A. of increasing taxes on ourselves," said Mark Pisano, executive director of the Southern California Association of Governments, a regional planning agency.

But some groups are already voicing their opposition. They say state and local officials need to do a better job of keeping their own fiscal houses in order and prying loose funds from the federal government.

Both tax plans face stiff opposition from the powerful Howard Jarvis Taxpayer Association, according to its executive director, Kris Vosbergh.

"This is another government tax grab, pure and simple," Vosbergh said. "We are already a high tax state that is driving business and residents away. Imposing these new taxes will be counterproductive."

But Pisano said that the public recognizes the need for projects that make it easier for people and goods to move around the region.

"Traffic and transportation are such a high priority with both the public and business right now that we believe we can form a broad coalition to get these measures approved," he said.

Lobbying Washington

Transportation and government officials across Southern California have been lobbying federal officials for $11 billion covering 29 transportation projects. But with intense competition, only a fraction of that money is likely to come to the region. And with the state facing a budget deficit of up to $35 billion, officials are in a project-cutting mode. In his 2003-04 budget, Gov. Gray Davis has proposed slashing up to $2 billion in funding for transportation projects.

Local transportation officials are faced with the choice of shelving much-needed projects or seeking alternate sources of funding.

L.A. City Councilman Hal Bernson, who chairs both the board of SCAG and the Metropolitan Transportation Authority, said both agencies are looking to impose additional user fees on freight moving through the region.

Bernson pointed to the precedent-setting use of such fees for the recently completed Alameda Corridor. Half of that $2.4 billion construction project was funded with revenue bonds, which are being paid back with a $30 per container levy on freight cars using the underground rail corridor.

"We could sell revenue bonds to create truck lanes or fund major rail improvements like the Alameda Corridor East project," Bernson said.

Trucking officials were less than enthusiastic about the proposed user fees.

"We're already paying for these improvements with our gas tax and other tax dollars," said Stephanie Williams, vice president of the California Trucking Association. "So people (in government) decide to shift funds elsewhere and then come back with these new fees or taxes? That's double dipping."

Williams added that with truckers now making 1 cent to 2 cents on the dollar, "you impose additional fees or taxes on them and they go in the red very quickly."

But Mike Furtney, western region spokesman for Omaha, Neb.-based Union Pacific Corp., which owns and operates the Union Pacific Railroad, said, "We wouldn't object to discussing these user fees. We would look at them on a case-by-case basis."

Railroad funds

Furtney said the railroad company has had preliminary discussions with officials from the Alameda Corridor East Construction Authority about "railroad participation in the financing of that project," although he would not offer details.

Like the railroad, at least one freight logistics company isn't flatly opposed to user fees.

"As long as the fee could be charged back to our customers, the freight industry would not likely oppose this," said Jeanette Bateman, facility manager for the southwest division of Oakland-based Pacific Coast Container Inc.

As for Pacific's customers, Bateman added, "They would absorb the user fee, especially if it meant that they could get goods through more quickly and more reliably."

The risk with this revenue-enhancing effort is that if freight volumes decline at any point during the decades it would take to repay the revenue bonds such as happened after the Sept. 11, 20001 terrorist attacks transit agencies could be left holding the bag. The agencies would either have to take money away from other projects to pay off the bondholders or come to taxpayers for more money.

While direct user fees may work for freight haulers, Southern California commuters have resisted imposition of fees or tolls on local highways. Because of this, local transportation planners are turning to more broad-based user fees, such as sales or gas taxes.

Pisano said his agency and the MTA are lobbying for state legislation to make it easier for local jurisdiction to levy and pass sales and gas tax increases.

On the sales tax side, Pisano said the effort is focused on reducing the voter approval threshold from the current two-thirds to 55 percent, just as happened with local school facilities bonds in 2000.

Regarding the gasoline tax, he said SCAG and the MTA are pushing for the state to grant authority to local jurisdictions to impose a tax on the sale of gasoline over and above the current state gasoline tax levy. In 1998, the state Legislature granted the Bay Area Metropolitan Transportation Commission the power to take a regional gas tax of up to 10 cents a gallon to voters in nine Bay Area counties. Such a measure would still need to garner two-thirds voter approval to pass, though.

MTC spokesman Randy Rentshler said the MTC has not yet taken such a proposal to voters. "We are thinking of putting a proposal together now and are trying to find the right ballot to do so," Rentshler said.

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