Inside Seven
Current Issue: September 2014
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Los Angeles County voted to fund more transportation projects. The question now is where that money is to be found.

Measuring Measure R and Mending a State Budget
by  Maria Raptis
Issue Date: 01/2009

Suddenly, transportation and infrastructure are the talk of the town, of the state and of the nation.

In the past two elections – one local and one general election - voters in Los Angeles County have been in favor of the work of Caltrans and of transportation agencies as a whole. Statewide, they voted to approve Proposition 1B in 2006 and most recently in November 2008 approved Measure R in Los Angeles County. Voters in this region take transportation issues seriously because time spent on the road and away from family, friends and leisure affects their quality of life.

California’s Proposition 1B enacted the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 to authorize $19.925 billion of state general obligation bonds for high-priority transportation corridor improvements, infrastructure and port security projects, state highways, local streets and roads, transit and passenger rail, state-local partnership projects, local bridge seismic retrofits, highway-railroad grade separation and crossing, traffic safety and congestion relief programs.

Measure R is a half-cent sales tax increase for residents of Los Angeles County that is expected to provide the local resources to finance new transportation projects and accelerate those already in the pipeline. Over the next 30 years, it is projected to generate $40 billion for congestion relief projects. Locally, from Measure R, Caltrans and other transportation agencies can anticipate funds coming in from the ½ cent sales tax beginning in July, 2009.

Since the passage of Proposition 1B, more than $5 billion has been put to work to improve California's transportation infrastructure and for a wide range of statewide projects that included a $27 million allocation (including $8.5 million for Los Angeles County) from Proposition 1B's Traffic Light Synchronization Program.

"Most importantly, new projects will reduce traffic congestion, improve air quality and safety and provide good paying construction jobs that will help boost our state’s economy," says Doug Failing, Caltrans District 7 Director.

The state budget crunch in the general fund – now at $15 billion and growing to potentially $40 billion into the next fiscal year – has created a shortage in the Pooled Money Investment Account (PMIA). Through the PMIA, the State Treasurer, Bill Lockyer, invests taxpayers’ money to manage the State’s cash flow and strengthen the financial security of local governmental entities. The PMIA has three primary sources of funds: the State general fund; special funds held by State agencies; and moneys deposited by cities, counties and other entities. At the end of November 2008, the PMIA portfolio totaled $62.7 billion and daily investment activity averaged $1.11 billion.

On December 17, the Pooled Money Investment Board (PMIB) suspended disbursements at least until additional funds are available and released. Caltrans relies upon these disbursements to construct bond-funded projects.

Add national and state financial troubles to Proposition 1B and Measure R highway project funding and things have gotten very confusing. For those involved in sorting out the details, it must feel like a chess game, waiting for someone to make a move.

Nationally, it is anticipated that the new administration will move soon after January 20 (Presidential Inauguration Day) to implement a federal stimulus package with transportation dollars to accelerate projects, hopefully highway bond-funded projects that may be delayed by the state budget crisis.

Statewide, it is eagerly anticipated that the Legislature will announce its plan for an amended budget, fees, cuts, taxes, and an economic and job stimulus package. Part of stimulating the statewide economy would involve the public buying State General Obligation Bonds as an investment in the State’s financial future.

“Caltrans is fortunate to be on the stimulus side of the economic equation. There is a lot of potential new work on the horizon for us. At the same time we’re looking at delaying some existing work. We are in a unique position of being in the forefront of creating jobs for others to help stimulate the state’s economy,” said Failing.

Caltrans estimates that 18,000 jobs are supported for each $1 billion invested in transportation.

Right now, Caltrans Division of Planning is leading discussions on what projects can actually be delivered in 90 days, 180 days, and in one to two years. Their job is to determine what can happen, what we hope will occur and what District 7 can expect when the things start rolling by the federal government, state government and local tax revenue.

“The Planning Division’s job is to identify good projects so that when money become available, we have the right projects ready to implement that will give us the best return on our investment and fits with our mission to improve mobility,” says Elhami Nasr, Chief, Division of Planning and Office of Advance Planning in District 7. “Measure R is just one part of it. We at Caltrans have more issues on our plate when trying to understand what Measure R means to us, what the state budget addendum will mean to our workforce and expected funding.”

 

Elhami Nasr, Chief, Division of Planning and Office of Advance Planning in District 7.