RECOMMENDATIONS TO SPEAKER'S COMMISSION ON REGIONALISM
CALCOG (California Association of Councils of Governments) is the statewide association of California's regional planning agencies. Most were formed as councils of governments, meaning that they represent joint powers agreements of cities and counties. The others were created as transportation commissions by the State Legislature. All have mandated state planning responsibilities. All councils of governments are responsible for identifying the share of the region's housing need for each community. Nearly all transportation commissions and councils of governments have transportation planning responsibility under both state and federal law. All councils of governments and transportation commissions are governed by city councilmembers and county supervisors chosen by their peers.
While most of our members are single-county organizations, those representing three of the four largest metropolitan regions - Southern California Association of Governments (SCAG), Association of Bay Area Governments (ABAG)/Metropolitan Transportation Commission (MTC) in the Bay Area and Sacramento Area Councils of Governments (SACOG), as well as Monterey/Santa Cruz area (Association of Monterey Bay Area Governments (AMBAG) - are multi-county. In these multi-county regions there are also sub-regional organizations in transportation. In the Southern California region there are also 14 sub-regions for all regional planning, not just transportation but also including housing and other non-mandated regional planning issues.
With a few exceptions in specific transportation operations, our member agencies do not have service delivery responsibility. Their role with regard to transportation funds (and limited other funds that they distribute) is as a policy planning body that guides allocations of funds to other organizations without regulatory or service delivery authority or responsibility.
REGIONAL HOUSING, LAND CONSERVATION AND ECONOMIC DEVELOPMENT/WORKFORCE TRAINING PROGRAMS
Much of the Commission's discussion and recommendations from the Public Policy Institute of California have focused upon ways of increasing local government collaboration and regional governance to reduce competition in fiscal and land use decision making and to bring them together to address shared regional issues. We support these objectives and generally concur in those recommendations.
However, the commission must also look at programs created and funded by the State or Federal Government dealing with inherently regional subjects. We have identified six subjects. Three have an existing regional framework - transportation, air quality and water quality. In each of these areas there is a comprehensive regional program recognizing that success could only be meaningfully measured on a regional basis and that the potentially competing interests of individual local governments could not meet the regional need. There are three other inherently regional subjects for which the state and federal governments have created dozens of programs but none which provide a comprehensive regional approach - housing, land conservation, and economic development/work force training.
Accordingly, our primary recommendation is to create regional programs to address issues of economic development (including work force training), housing, and land conservation. Each of these programs would require regional planning and programming of funding. They would also involve coordination of many existing federal and state funded programs. For each of these programs we propose that the funding process build upon the only existing model of regional planning and funding, which is transportation. (Air Quality and Water Quality programs are regulatory which is not an applicable model.)
COMPREHENSIVE REGIONAL PLANNING TO ADDRESS GROWTH RELATED CHALLENGES
These efforts would require the development of comprehensive regional plans and strategies, coordinated with existing plans for transportation, water quality and air quality, to address land conservation and housing needs as well as similar plans and strategies for economic development and work force preparation.
There are many existing state programs and even more federal programs to acquire lands for parks, habitat, watershed protection, provide assistance in meeting affordable housing needs, economic development and work force preparation. Some of these are regional. However, none of these programs currently provides for the development of a single coordinating regional plan or strategy which links together all of these efforts to ensure the most effective use of limited funds.
Moreover, most of the funds that are available are targeted to be utilized for existing urban areas to support infill development or to preserve ecologically significant lands which are often far from areas in the path of urban growth. Virtually no funds are available to direct and improve the location, mix and impacts of development on the urban fringe, yet this is where the overwhelming majority of growth will continue to occur.
In spite of numerous policies to favor infill development as opposed to development beyond the existing urbanized area, 80% of new development has occurred and will occur on the urban fringein virtually every metropolitan region of the country. There are many reasons including the existing highway infrastructure built for intercity travel and the fact that as you expand an area outward there is 5 to 10 times as much developable land along the urban fringe than in infill potential areas. Moreover, there is much less traffic congestion, much lower land prices and, in most cases, much less controversy and opposition to the development. The greatest potential for improvements as a result of better regional governance is to create new developed areas on the urban fringe which avoid the problems of past development.
We want to create areas that have sustainable transportation mobility. We want better locations of land uses in relationship to one another and evaluating the types of transportation opportunities available and planning about where the next area to develop will be so that congestion does not quickly follow as it seems to in all recently developed areas. Similarly, we want sustainable and balanced economic development mixing not only jobs and housing but a range of housing and jobs that is part of an overall regional strategy that supports the long term regional economy and is located in areas where we most want development to occur and away from areas that are the most valuable for land conservation purposes.
Similarly, most existing regional transportation programming is not utilized for transportation projects to serve new development on the urban fringe but rather to provide relief from congestion for existing residents and businesses.
On the urban fringe, it appears that most development and infrastructure is funded through private development. This all reflects local decisions and local marketplace opportunities without any regional coordination.
We make efforts to attract and subsidize economic development and housing in the infill potential area. We do not direct, coordinate and improve the location and nature of development on the urban fringe. That development continues to happen the way it has happened over the last several decades.
Market pressures and opportunities to link up to existing infrastructure dictate where development occurs, instead of having a coordinated strategy that includes the acquisition of lands where we'd least want it to occur as would be possible with a regional open space strategy.
Moreover, if there were more transportation funds available to assist in meeting some of the transportation needs in these areas and not relying as much on developer contributions, it might be more feasible to impose regional impact fees on that development for purposes other than transportation that could assist in meeting the regional needs for green space. We also could utilize funds to subsidize and support more balanced development which provides the most needed housing for the region or which improves the regional economy.
INSTITUTIONS INFORMATION AND INCENTIVES
We concur with the Commission that in all programs, policies must address the three e's of economy, environment and equity. CALCOG adds to that a framework for looking at these issues that are three i's - institutions, information and incentives.
We should look at existing institutional structures that work, and ensure that decisions are based on having adequate information and evaluating the information before them. Mostly we need to create financial incentives that are likely to lead to desirable results.
INSTITUTIONS
We believe that the model of transportation fund distribution under SB 45 of state law and under ISTEA and TEA 21 of federal law provides a good model for checks and balances. Decisions are made by local elected officials - Mayors, City Council Members and County Supervisors, selected by their peers, to serve on regional planning agencies. Regional decisions must be consistent with a state plan and are subject to oversight by a State Commission. It is an existing model - so we don't have to create a new governmental agency or a new process - both of which could add to the complexity and controversy of any proposal. It also emphasizes participation of local elected officials which provides the best structure to integrate regional decisions with local land use decisions.
Funds provided to regions on an appropriate formula basis are made available to local governments and others that would be the applicants for the funds in accordance with a regional plan.
Federal law imposes public participation and environmental justice requirements upon these agencies which could be clarified to ensure that these processes reflect the public/private regional collaboration and inclusiveness that several Commissioners have advocated for.
ACCOUNTABILITY AND PERFORMANCE
The board members of these agencies are held accountable to the public in many ways. First, they are selected by their peers on their respective City Councils and Boards of Supervisors to represent those communities for whom they and their peers were elected to represent. Secondly, their decisions are subject to numerous levels and types of state and federal review approvals and compliance requirements. We are also working with the Department of Transportation and the California Transportation Commission to develop performance measures to guide decisions on the most effective utilization of our limited available funding.
FUNDING - INCENTIVES
The best way to get better decisions is with the carrot of new funding. However, with the state surplus now gone and no foreseeable state surplus forecast for the next few years, we need to look creatively at financing alternatives.
PARK BONDS
Land Conservation is a common feature of state park bond measures including AB 1602 Keeley just approved by the Legislature and pending on the Governor's desk. If it is signed by the Governor and approved by the voters in March, the grant programs it creates for state agencies could be required to be coordinated with comprehensive regional planning programs. Future state park bonds, which are regularly placed before and consistently approved by voters could have a more directly stated regional program with funds provided to regional planning organizations. These programs could be linked with transportation planning and programming and with air and water quality plans
The plan would identify areas with the highest priority for acquisition for a wide range of purposes including protection of habitat, providing space between local communities, active recreational uses, protection of agriculture, forestry and other purposes. Once a plan is developed, the funds provided by bonds can also be supplemented by local governments which can work together in implementing a regional plan. They also can add local funds and in some areas may include regional impact fees that can be imposed on development to contribute to the plan. (This is currently a proposal in Riverside as part of a master plan for new highway projects and habitat conservation.) In all areas where the land would be publicly owned bond funds will need to be supplemented by user fees or other funds to cover operating costs.
FUND INFRASTRUCTURE TO SUPPORT (AND SUBSIDIZE) REGIONALLY SIGNIFICANT HOUSING AND ECONOMIC DEVELOPMENT
While there are many programs funding housing and economic development there are no readily available ongoing sources for increased funds for these programs. However, a way to indirectly assist in the development of more affordable housing and to enhance economic development opportunities is through provision of infrastructure (particularly transportation infrastructure for which the unmet needs appear to be greater than that of all other types of infrastructure combined).
UNMET TRANSPORTATION NEEDS
While there are regional transportation programs and the state annually expends more than $12 billion on three forms of transportation - state highways, local streets and roads and public transit, California was recently found to rank last among the states in per capita transportation spending. An unmet needs report commissioned by the State Senate completed by the State Transportation Commission in 1999 found that over the next ten years California would have to increase its spending by $100 billion or $10 billion per year. Spending would have to be increased by approximately $6 billion per year just to come up to the national average in per capita spending.
In addition, an ongoing $1 billion revenue source is at risk from half cent sales taxes that were enacted by a majority vote but now would require a 2/3 vote for re-authorization. They are set to expire in about half the state over the next 5 to 10 years.
CHANGING VOTE REQUIREMENTS FROM 2/3 TO 55%
While recent indications are that some of these could gain the 2/3 vote necessary for re-authorization, CALCOG strongly supports efforts to lower the vote threshold. The success of last year's Proposition 39, lowering the vote requirement for education bonds to 55%, could be applied for transportation sales taxes, as well as for regional and general obligation bonds (financed as an addition to property taxes) for transportation and other infrastructure besides schools.
However, this type of financing, like Proposition 39, would probably have to be presented as an initiative submitted directly to the voters as legislative efforts to obtain the 2/3 vote in the Legislature necessary to put a Constitutional Amendment on the ballot have generally not been successful.
USER FEES FOR HIGHWAYS AND LOCAL STREETS AND ROADS
Besides tax financing of infrastructure, we can finance transportation as a user fee. A recent Legislative Counsel Opinion concluded (Attachment 5) that a fee collected as part of motor vehicle registration payments or at the pump as people purchase fuel is a user fee and not a tax. It only requires a majority vote of the Legislature to authorize regional agencies to collect these fees based upon findings that the fees are utilized to benefit the people paying the fees. At the local level there is no vote of the public required, only a vote of the governing board of the regional agency.
EXISTING PROGRAMS SHOULD HAVE REGIONAL APPROACH
The existing state (and federal) programs which support acquisition of land for habitat conservation, watershed protection, park and recreational lands, the construction of lower priced housing address economic development and work force preparation could be restructured so that the funds in those programs are allocated through and in accordance with a regional planning program. These funds are not adequate to meet the needs but they shouldn't be spent in ways that don't support these inherently regional issues. There should be a thorough examination of all of the applicable state and federal programs to see how they can be restructured to emphasize a regional approach which is coordinated with other regional programs.
FEDERAL ACTION CREATED TRANSPORTATION WATER AND AIR REGIONAL PROGRAMS
OTHER STATES HAVE SIMILAR ISSUES
The three existing regional programs of water quality, air quality, and transportation planning and programming were created by federal legislation. Regions throughout the nation are equally limited in their ability to develop regional programs to address land conservation, housing and economic development needs. Accordingly, in addition to the actions that we recommend for the state to carry out, CALCOG, the Speaker's Commission on Regionalism, the Governor and the Legislature should work with interests from other states and regions to build an agenda for federal action to provide new federal funding for regional programs in housing, land conservation and economic development and to restructure existing programs so that they support these efforts.
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LOCAL FISCAL ASSISTANCE IS CRITICAL FOR LONG TERM SUCCESS
To more meaningfully address these issues over the long term we must also address the overall on-going revenue issues affecting local government and the incentives that exist for them. That should be a part of the Commission's actions that does not have to all be enacted at once or be enacted before other proposals are adopted.
We know that the primary fiscal incentive in local land use decisions is to approve retail commercial development with the impression that very little else pays for itself in terms of bringing in revenues that exceed the cost of providing services.
There ought to be rewards for local governments that participate in a regional plan and are making the land use decisions that support accomplishment of these regional objectives but make land use decisions that do not pay for themselves in terms of paying for the service cost associated with that development.
This is particularly true for local governments approving housing where the more that a development contributes to meeting an affordable housing need (meaning the lower the cost and value of that housing in terms of the lower incomes required to occupy it) the less revenue it provides to local government without a corresponding decrease in service requirements and in many cases significantly increased service responsibilities.
We need to look at what services aren't getting provided when the revenues to local governments from affordable housing developments (and other types that don't pay their own way) are developed. We should offer ongoing funding for local governments that makes up that difference in order to create the right incentives for local land use decisions. Local governments need not have plans approved by other organizations but simply provide the development that is called for in those plans with an ability to automatically allocate the funds to local governments in a way that does not require discretionary decisions in approving or reviewing or exercising oversight over local government land use decisions, which should remain the exclusive province of cities and counties. It is simply a way of rewarding those local governments who are doing the things that support their adopted regional objectives.
This last recommendation is admittedly much more ambitious and difficult, but we believe that significant permanent assistance to local governments must occur if we are to properly change the incentives to create better decisions.
ADDITIONAL MATERIALS INCLUDED
Attached to this paper are several additional materials to explain our recommendations.
GOVERNANCE/PROCESS SHOULD BUILD ON REGIONAL TRANSPORTATION PLANS (Attachment #1)
The first is a background paper on the transportation planning process to explain what we do now and how our programs can be restructured to meet these needs better.
One of our strongest recommendations is to utilize the same agencies that make regional transportation decisions as the Regional Transportation Planning Authority is set forth in federal law with designated metropolitan planning organizations. This law requires a 20 year fiscally constrained comprehensive regional transportation plan to be updated every three years under federal law. All projects using any state or federal funds must be consistent with (included in) this plan.
Under federal law it requires the approval of local governments representing 75% of the population in a region to change the designation of these federal planning organizations, something that seems extremely unlikely to occur. Accordingly, if we don't use these agencies to carry out these other regional planning purposes we will again be fracturing our decision-making by creating different organizations for this planning that would be separate from transportation planning. We believe it should be coordinated with transportation planning and thus whatever limitations and problems exist (as they do to varying degrees in different parts of the state) with the existing regional transportation planning process, changes to it and improvements should be made within the context of the existing organizations. We believe the Commission's concerns about the needs of the region as a whole in balance with those of individual localities within the region and better inclusiveness of participation to address social equity concerns can be accommodated within this framework.
MORE DETAILS ON HOUSING, LAND CONSERVATION AND ECONOMY
(Attachment #'s 2, 3 and 4)
We've also attached more detailed descriptions of some of the issues and opportunities in regional housing (Attachment 2), land conservation (Attachment 3) and economic development/work force preparation strategies (Attachment 4).
TRANSPORTATION USER FEE (Attachment 5)
Finally, we've also included the Legislative Counsel Opinion and description of the transportation user fee concept.
Attachment #1
PROPOSALS TO SPEAKER'S COMMISSION ON REGIONALISM
TRANSPORTATION PLANNING AND PROGRAMMING
A GOVERNANCE STRUCTURE FOR REGIONAL DECISION-MAKING
Regional Plans and Spending Programs with State Review
Transportation decision-making involves the preparation of a regional transportation plan every three years. All projects, which are not only those that are directly approved and authorized by the regional
agencies but all others requiring state or federal funding, must be consistent with these regional transportation plans. The regional transportation plan must be consistent with the state transportation plan but there is no state approval requirement of the regional plan.
Regional transportation programming involves some funds which are regionally generated through local self-help sales tax measures, some federal funds which are directly programmed and allocated by regional agencies, and some state (and indirectly federal) funds allocated by regional agencies in a spending program which must be approved by the state transportation commission.
Stakeholder Participation in Decision-making
In developing the regional transportation plan and transportation programs each regional agency is required by federal law to have a citizen participation component.
These requirements often result in the formation of a formal advisory committee that operates much like a planning commission does in providing recommendations to city councils and county boards of supervisors doing general plans. The regional transportation governing board which is comprised of local elected officials receives advice from a citizen's committee that should represent all of the important stakeholders within the region.
There could be funds to ensure participation of economically disadvantaged groups as is done in various health planning programs.
The State Transportation Commission members are all appointed by the Governor. There are no provisions to require that they represent specific different interest groups. However, new commissions created for other subjects could have such designated representation.
Funding Decisions Split Between Regional and State Needs
The designation of having 75% of the portion of state transportation funds used for expansion of an existing program (actually only about 10% of all state transportation funds) is based on several laws and facts. Federal law was amended in 1991 to require all projects to be consistent with regional transportation plans. 80% of vehicle trips are local - they do not leave the regional area. The biggest transportation problems are no longer building the interstate freeway system but dealing with congestion problems in moving goods and people through metropolitan areas. In other words, since the problems are regional in nature the regional decision-making body as opposed to a state body was better equipped to make the funding allocation decisions. The 25% State Interregional Program
recognizes that there are still statewide needs and a portion of projects are to get goods and people "to you and through you."
Land Use Transportation Coordination and Accountability
One reason for having local elected officials as a regional decision-making body is that these are the officials who make local land use decisions and any efforts to coordinate land use decisions with transportation decisions or for other subjects is best done through an organization that is comprised of local elected officials.
This is also a model that has existing organizations throughout the state so it would not require the creation of new entities.
In addition, housing, economic development, social equity, and open space protection are all issues that are related to transportation planning and programming. However, armed with only funds and planning related to transportation projects, regional transportation planning agencies are not able to effectively deal with these issues. Having funds for housing, economic development and open space acquisition would compliment transportation decision-making and provide a coordinated program.
These agencies will continue to be the transportation planning and programming agencies. Under federal law, this can't be changed without approval by local governments representing 75% of the population in a region. Thus any other approach separates transportation decisions from other growth related issues.
Attachment #2
CALCOG RECOMMENDATIONS TO SPEAKER'S COMMISSION ON REGIONALISM
HOUSING
Housing is a regional issue. Housing prices and housing availability in one community is directly related to what is available in nearby communities throughout the region. However, there is only one regional housing planning program in California and that is the process by which regional planning agencies (generally the same agencies that do regional transportation plans) assign each community its share of the region's need for housing over the next five years. This process is completely separate from any process of allocating funds to individual communities which comes from state, federal and local sources (the most significant of which is redevelopment program set-aside funds for low and moderate income housing).
There is an absence of any type of regional strategy to look at all of the different state, federal and local funding sources to determine how well they are being utilized to meet housing needs.
It is well established that the marketplace is not effective at providing very much of the need for multi-family housing and public subsidy funds fall far short of the amount needed to make up for that gap for lower income households.
Are we getting the most out of our available funds? How much additional funding do we need? How much of a factor is the lack of adequate revenues to local government to keep pace with needs? It is clear that the lower the value of housing the less property tax revenues it produces and the greater the gap between the cost of providing services and the revenues available to provide those services.
What is needed is a program to provide for new funds, not only for the direct production of housing, but for the provision of public improvements and services in relationship to that housing. These funds should be allocated regionally based on a regional plan to provide assistance to support housing where it is most needed and where it can be most cost-effectively provided.
Local governments would apply for these funds. They would be allocated in accordance with a regional plan, and local governments would have to have their own plans that assist in implementing these plans.
State funds could be provided to regions conditioned upon regions having their plans approved by a state commission similar to the Transportation Commission. In addition, a portion of funds could be set aside to be directly allocated by a state commission based on overall state needs in particular high priority programs.
Attachment #3
RECOMMENDATIONS TO SPEAKER'S COMMISSION ON REGIONALISM
LAND CONSERVATION
No matter how much we may want growth to primarily occur within the areas that are already urbanized, the overwhelming majority of growth has been taking place over the past several decades and will inevitably continue to take place in areas along the urban fringe and beyond. This is due to significantly greater available land, less public resistance, lower land costs, less traffic congestion, and other factors.
The biggest challenge and opportunity is for us to direct it towards the places we most want it to go and away from places we least want it to go.
This can be accomplished by providing funds for regional plans to designate lands to be aquired (or development rights purchased) in areas reflecting regional priorities for preservation. These may be lands for habitat protection, key agricultural lands in areas most vulnerable to urban growth, watershed or flood protection, providing space between cities preserving their independence. (Numerous public opinion polls have indicated that keeping space between cities is a top priority of residents so they don't all grow to touch up against one another as they have in Los Angeles and parts of the Bay Area.)
Funds can also land acquisition within urbanizing areas for recreation and other purposes.
With funding available to acquire lands, regional plans can identify which areas should be protected thereby directing growth towards the other areas.
Funds can also reward communities that utilize more smart growth principles to reduce vehicle trips and increase pedestrian/bicycle opportunities, more efficient use of land such as densities, mixture of uses and utilization of school sites for multiple community purposes.
Traditionally, funding for major land acquisition has come through state bond measures and through federal programs.
Park bonds have occurred on a sufficiently regular basis that they can be viewed as an ongoing and permanent source of revenue even though they have to go to voters every two or four years. Park bonds could include a significant component for allocations to regional areas to prepare regional plans. The plans would be developed by regions with funds allocated for regional projects. Similar to transportation, this program could be combined with the establishment of a state commission that would also have funds for statewide projects that would not be directly designated in the bond measure but could be determined through a state planning process. A portion of the regional funds may provide a match for state funds for projects that share both a statewide and regional value.
The plans would not authorize any regional agency to regulate or control local land uses. However, local governments applying for these funds could be required to have local programs and funds that assist in meeting regional objectives.
Attachment #4
CALCOG RECOMMENDATIONS TO SPEAKER'S COMMISSION ON REGIONALISM
ECONOMIC DEVELOPMENT/WORK FORCE PREPARATION
California consists of a set of regional economies with regional work forces communities to work in regional transportation and regional housing markets who require coordinated education and training to be prepared for coming job opportunities. In addition, many of these regional economies have not been performing well. Even in the boom times of the late 90's, several regional economies, particularly those in the San Joaquin Valley, had high population growth, high unemployment and little or no real economic growth in contrast to most other areas of the state (and a few other areas).
Now, with the state facing budget deficits, all regions of the state need to increase economic development opportunities.
Both work-force preparation and economic development should occur on a regional basis with coordinated strategies to accomplish consistent policy objectives. However, seldom is that the case. There are many work-force preparation training and education programs operating within each region. There are even many programs trying to coordinate several of these programs, which include educational institution activities, welfare to work programs, job training programs and others. We were told once there were more than 200 federal programs affecting this subject that involve state or federal funds and potentially all of them had existed within a single region.
What is clearly missing is an overall set of regional strategies based upon an analysis of the state of the regional economy, presently projected opportunities and deficits in the future, needs of its citizenry and a way to bring together all of these different programs in a way that they mutually support the same overall regional objectives.
Regional planning agencies the San Diego Association of Governments (SANDAG), Southern California Association of Governments (SCAG), and the Association of Bay Area Governments (ABAG), have prepared overall plans. However, there is no obligation for anyone operating those programs to conduct those programs to consider the adopted regional plan. Moreover, there is no additional funding or support that any organization receives if it follows the regional plan.
Funding for infrastructure, to support economic development and support the regional economy could be made available to local governments and to support other education or other programs within the region tied to their participation and agreement to act consistent with an overall regional work-force training and preparation program.
Similarly, primarily individual local governments undertake economic development activities. They not only utilize funds from state or federal programs but utilize their own funds
Attachment #4
(particularly where the economic development will result in sales tax or other revenues to the local government that more than covers their costs in services or infrastructure provided).
These actions generally are taken to enhance local economic activity and do not necessarily enhance regional economic activity. Much of the economic development that local governments are seeking to attract is economic development activity that is going to happen somewhere in the region anyway. It is local governments competing with one another to attract that development to their individual community.
This particular subject often called the pursuit of "big box development" has led to numerous legislative proposals such as a proposal to prohibit subsidies of this type of development and to require sales tax growth sharing by all local governments within a region (as proposed by current AB 680 - Steinberg for the Sacramento region).
Rather than addressing those controversial issues directly through legislation, we propose that regional agencies be given significant new funds through the various funding sources we have identified for transportation infrastructure. If this funding is sufficiently large and adopted as part of a regional plan for economic development, the regional agency could condition the award of these funds upon local policies and expenditures of local funds that support it, or the regional agency could take into account the availability of other revenues for local governments in considering the need for regional funds for such purposes.
Attachment #5
Request for Legislative Counsel Opinion
We are considering a legislative proposal that could finance transportation services, like a public utility. The methodology requires setting rates that could be paid for in the same manner that people pay for gasoline and other fuels, such as diesel, to be added on to the price of the fuel at the pump. Alternatively, the fees could be collected as part of vehicle registration based upon miles traveled measured by the odometer reading as part of smog check or a computer chip in new cars. The rates would be determined and funds would be allocated as follows:
1. The State Transportation Commission or some other administrative body at the state level would determine the needs to maintain the physical condition and the functional condition of state level facilities, generally maintenance and repair of existing freeways and state highways and the construction of new roadways to meet inter-city travel needs.
They would make findings, after noticed hearings, to establish the required level of the rate, which could be increased or decreased annually, based upon the findings of the needs. It would work like a user fee and the people would be paying it to the extent to which they purchased motor vehicle fuels or drove miles.
If gasoline useage is the measure, the disparity of fees collected between cars, which use less fuel per mile or get more miles to the gallon as compared to larger vehicles, and trucks could be justified in that these smaller vehicles take up less space on the roadway, pollute less and do less damage to the roadways, thus contributing less to the maintenance costs of the roadways.
2. In addition to the above component which would be set uniformly throughout the state, regional transportation agencies or some other administrative body at the metropolitan level would establish the need for maintenance and function of local streets and roads. In addition to the maintenance needs, where areas are congested, additional state or local roadways could be added.
3. A secondary use both statewide and regionally would be authorized where the agency finds that it is not feasible to expand the roadway capacity. Where congestion is significantly high, the cost of adding additional lanes to a facility or to a street are prohibitive because of the buildings that would have to be displaced, or other problems. In those instances, an agency could find that instead the user fee or rate funds could be applied to develop an alternative to road usage that reduced the congestion, thus improving the flow of traffic and the useability of the roadway for those who chose to remain on it. These types of funds could be used to support transit that directly reduces congestion and for ridesharing, telecommuting or other programs that reduce traffic congestion and improve the overall functional utility of the roadways.
4. The regional agencies would also take into account the needs for local streets and roads which are based upon need information submitted by individual cities and counties. These needs would be added together in establishing an overall regional rate which would be added to the state rate. Rates would vary by region but not by individual city and county.
Attachment #5
The reason for not setting the rates by individual cities, for local streets, and roads is that it is assumed that all motorists travel extensively outside of their own individual cities and would use other cities' roads.
This concept for financing transportation raises a number of legal questions.
1. For purposes of Proposition 13, Proposition 62, Article XIX and other potential limitations on taxes and fees, is this properly considered a user fee and not a tax?
2. Assuming that it is a user fee and is subject to Proposition 218 plus all of the nexus and findings case law, such as the Nolan case, and assuming that all of the necessary findings as to the relationship between the amount of the user fee and the purpose for which it can be used are met, are all of the proposed uses of these fees or rates proper?
A. State fee for inter-city roads repair and maintenance.
B. Statewide fee for all maintenance and repair of freeways and state highways.
C. State fee for construction of additional inter-city roadways.
D. Metropolitan-area roadway maintenance.
E. Metropolitan-area roadway expansion.
F. Metropolitan-area transit that directly reduces congestion.
G. Metropolitan fee for ridesharing to reduce congestion.
H. Metropolitan fee for telecommuting to reduce congestion.
I. Local streets and roads as part of a regional fee.
J. Local streets and roads with findings made by local government and varying the fee
by individual city.
3. Are there other legal hurdles that stand in the way of this concept assuming that it is authorized by legislation and implemented as set forth in this memorandum?
