California: Helping Themselves to a Brighter Future
March 24, 2014|Carter Templeton
BY KYLE MOTYCKA
Business Development and Proposal Manager – Rail
Veolia Transportation Maintenance & Infrastructure, Inc.
California and Hollywood. The tie goes back to the early days of film where individuals had big dreams and Hollywood was the place where dreams come true. What has struck me about California, is it is less about the stars and more about the drive as hard working individuals must have to make their dreams become a reality. There is no need to look further than companies like Tesla and Google to see this tenacity at work. The people that I have met throughout the state have a calm but persistent attitude towards life. Maybe the constant sunlight brings about a sense of optimism or maybe the inventions in Silicon Valley constantly is inspiring folks to strive for more in their own lives but whatever it is, the people of California have a tenacity that is second to none.
Few cities have been transformed the way Los Angeles has by transportation. Los Angeles was once a thriving, progressive, rail-oriented city. Throughout the 1930’s and 1940’s, Los Angeles County was as well or better connected by passenger rail than any other in the country. While much of this expansion was driven by real-estate deals conducted by a single individual who wanted to connect all of his then-remote developments, it nonetheless set Los Angeles on a path into future where everyone could be connected in the county by rail. However, with American’s accessibility to cars in the 1950’s and the subsequent lack of public backing to keep the rail lines live, the extensive rail system in Los Angeles fell to the wayside. Today many of the freeway corridors in the region actually follow the original rail lines alignment.
Over the past three decades, California voters have changed their tune and decided to back enhancements in rail and transportation. Anyone who has seen the daily transportation challenges that currently face the major cities in California can understand why improvements are critical. The amount of traffic and congestion that plagues some regions can bring even the most patient individuals to their breaking point. With successes in San Francisco with the BART train and Caltrain and Los Angeles with Metrolink and the LACMTA light rail and subway network, residents have seen what a positive economic impact and betterment of life having a robust rail network can bring to a region.
The question and challenges facing today’s voters are much different than the same region faced over 60 years ago. Today there is a collective attitude that rail is here to stay. Millennials do not want to get in their cars anymore. For much of the generation, cars are seen more of a liability and unneeded responsibility than as the sign that they have “arrived”. Individuals are moving back into the cities and this can easily be seen by the vibrant rebirth and focus on downtown rejuvenation that is happening across the country. In Los Angeles, local city leaders have seen the importance of a healthy downtown as much as any other city. Through the Bringing Back Broadway initiative, teams of people are working to bringing the LA Streetcar to the downtown business and residents. Rail is once again being used as an economic engine for growth and development. What is exciting about LA Streetcar is that local voters decided to tax themselves to raise of $60M in construction funding.
This example of voters taking on the initiative to self-fund their transportation needs is something Californians have been doing for a while now. The Self-Help Counties Coalition has 19 members covering 81 percent of the population in California. The idea of a self-help county, or a county that has local tax measures to fund infrastructure needs, is a trend that will be necessary in the future. We will always need transportation investments; it will always be a debate on who funds it.
This debate continues today on every level of government. The federal government spending levels are staying stagnant as seen in the MAP-21 federal transportation funding bill. Leaders in California have used the self-help county model to take matters into their own hands and not rely on federal handouts to fund all of the State’s transportation needs. With federal funding toward transportation not forecasted to significantly increase anytime in the near future, it is important this trend continues.
County leaders have taken this to heart and smart people have realized the financial leverage having long term funding streams can provide. With the advent of Measure R, a half cent sales tax passed in November 2008, a projected $40 billion of funding will go to traffic relief and transportation upgrades throughout Los Angeles County over the next 30 years. The County of Los Angeles and Los Angeles County Metropolitan Transportation Authority have done a great job leveraging this long term funding stream from Measure R. This long term funding stream has given them access to debt and the ability to fast track critical projects.
I see two stars in California aligning that make for a bright future in the state when it comes to transportation. The first is long term, guaranteed revenue streams at the local level continuing to be a constant in the state. Complimenting local revenue streams is the evolution and maturation of the public private partnerships (P3) and Transportation Infrastructure Finance and Innovation Act (TIFIA) financing markets in the United States. Slow to take hold, the P3 delivery model for rail projects about to expand to a level never seen before in the United States in the coming years. In concert with the private sectors willingness to participate, the Federal Transit Administration’s expansion of the TIFIA program allows access to relatively cheap long term financing from the federal government. Projects like Denver’s Eagle Project blazed the trail; now the Maryland Purple Line is leading a new pack of projects that will take advantage of the market conditions to best leverage the building of infrastructure in their neighborhoods.
With P3 legislation in place for local agencies in California, the market is primed to leverage the local long term guaranteed funding necessary to lock in necessary financing. Like with Measure R in Los Angeles County, voters are taking upon the long-term burden of taxation and the local leaders are leveraging this long term funding into getting projects financed today. This is what has allowed projects in the region to be fast tracked and what has driven the boom in construction in the county in the past several years. As counties see the success of this program, others will follow suit.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Eno Center for Transportation.