Financing and Regional Solutions

Marlon G. BoarnetDept. of Planning, Policy, & Design

Metropolitan Futures Initiative of the School of Social Ecology

UC Irvine

Background: The Economy

Source: California Employment Development Department

• Peak oil– Increasing demand– Reduced supply

• Climate change• Federal air quality attainment• Need to reinvest in regional transportation

infrastructure• Hollowing out of regional economy

– Aging of population– Stalled wage growth

Longer Term

1970 1980 2000 2004

SCAG Region vs. 17 Largest Metropolitan Regions

SCAG Region vs. 17 Largest Metropolitan Regions

Average

110%

90%

80%1990

Average Payroll Per Job

87%Per CapitaPersonal Income 84%

Per Capita Income RankPer Capita Income Rank

1

34

25

7

10

9

8

11

12

1315

16

Was in 4th placein 1970,

7th in 1990

2005: US Bureau of Economic Analysis

12

Among Top 17 Metros

SCAG Region

San FranciscoWashingtonDC

New York

Philadelphia

Boston

Houston

Seattle

Denver

Minneapolis

Chicago

AtlantaDallas17

St. Louis 14

6 Detroit

Pittsburgh

Cleveland

Policy Context

• Proposition 13– More reliance on sales and income tax

• Gasoline tax has not kept pace with driving or inflation– Federal gas tax last increased in 1993– California, even longer

• Sales tax increment for transportation

Raise the Gas TaxA Revenue-Neutral Way to Treat Our Oil AddictionBy Richard G. LugarSunday, February 1, 2009

California Fuel Tax Revenue Per Million Vehicle Miles Traveled

Source: Caltrans, California Transportation Plan, 2025

• Status Quo– Project-by-project environmental review and

financing

• Hope for more federal funding• New regional solutions

Options

Moving Toward Solutions• Regional infrastructure strategies

– Freight movement– San Bernardino sub-region

• Planning area – collaboration– Models: Western Riverside Habitat Conservation Plan, Alameda

Corridor Agency, Santa Ana Watershed Project Authority• Nexus between user fees and financing instruments

– Manage demand and improve supply• Regional fee / infrastructure bank / financing and

investment plan• Mitigation banks and in lieu fee arrangements• Early acquisition of conservation lands, public rights of

way

Pilot Cases

• Goods movement corridor– Lowenthal, SB 974, 2008, est. $340 million

per year Ports of LA/LB– Infrastructure needs: emission reduction,

electrification– Can we afford this? Can we afford not to

invest?

User Fee Pricing

MPC

MSC

D = MSB = MPB

Q

$

MSC = marginal social cost MSB = marginal social benefit

MPC = marginal private cost MPB = marginal private benefit

Q* Qp

Tax = MSC - MPC

Status quo: no user fees