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The Gas Tax and Transit "Armageddon"

by: Robert Cruickshank

Mon Feb 23, 2009 at 09:15:00 AM PST


Crossposted from the California High Speed Rail Blog

One of my lingering concerns about the Obama Administration has been that they might be tempted to claim victory with the $8 billion in HSR funding added to the stimulus and not follow up on that money, which as we know merely pays for some initial costs. But Secretary of Transportation Ray LaHood made clear last week that in fact, the $8 billion in HSR stimulus really is intended as a signal to America that Obama is truly serious about building HSR:

LaHood said that for Obama building high-speed rail networks is, "if not his No. 1 priority, certainly at the top of his list. What the president is saying with the $8 billion is this is the start to help begin high-speed rail projects." He added that the administration "is committed to finding the dollars to not only get them started but to finishing them in at least five parts of the country," although he declined to elaborate on where these projects might ultimately be built.

And don't worry about the right-wing freakout over the Vegas HSR project - California is in better position than any other HSR project in America to use that stimulus funding. We can begin construction in late 2010 or early 2011; no other project is anywhere close to that point.

This couldn't be better news for us in California, where we have long known that at least $15 billion in federal aid, spread out over 10 years, will be needed to build the SF-LA line. Unfortunately the news is tempered by the fact that the Obama Administration's support for HSR did not extend to mass transit as a whole. Here in California the state has decided to zero out the State Transit Assistance account, costing local agencies over $500 million in funding. The federal stimulus isn't nearly enough to make up the difference. And as the San Jose Mercury News reports, that's setting up a situation where HSR may be pit against local transit agencies:

The MTC meeting Wednesday in Oakland could turn contentious, as the current plan calls for allocating $75 million to help build the Transbay Terminal in San Francisco, which would serve as the final stopping point for a high-speed rail line and Caltrain (UPDATE: the MTC now plans to seek train box funds from the $8 billion HSR stimulus, not the general transit stimulus funds - see Transbay Blog for more info) and $70 million to build a BART spur to Oakland International Airport. Those two projects alone would take 43 percent of the $340 million headed to the area in stimulus funds for local transit.

Some want money for those new two projects scrapped or reduced - and redirected to cover the cost of paying for day-to-day transit needs.

But MTC officials counter that building the Transbay Terminal now will save millions of dollars in later costs, and combined with the $8 billion in stimulus funds set aside for high-speed rail could accelerate that program.

I support using that money for the Transbay Terminal, although I'm less certain about whether BART to OAK is all that necessary; the AirBART buses work pretty well (I used them on numerous occasions when I was an undergrad at UC Berkeley, although that was 10 years ago).

But I really hate it when HSR pitted against other forms of transit. I have said it before and I will say it again - HSR and other mass transit need each other to be successful. It should not and must not be an either/or choice. I don't blame the MTC for being stuck in this position - that blame lies in Sacramento and Washington DC. But we transit advocates need to not fall out along modal lines.

I'd like to propose a solution, one that I don't even know is possible under state law but makes a ton of sense to me. The nine-county SF Bay Area region should implement its own gas tax, which will solely be used to fund public transit. I haven't penciled out the numbers so I don't know exactly what the tax amount should be, but it should be indexed to the price of gas, and not a fixed cent number.

This money would initially be used to backfill the loss of STA funds, and allow the federal stimulus money to go to new transit infrastructure such as Transbay Terminal or BART to OAK. Ultimately the STA funds must be restored by a statewide gas tax increase, but it is much more politically possible to implement a gas tax in the Bay Area first than to try and get the Central Valley and the Southern California exurbs to buy into this (they can be brought on board later, once the 2/3 rule is eliminated).

It's very difficult for folks living in the nine counties to evade the tax, with the possible exception of Gilroy residents who might drive to Hollister to fill up. Most folks will simply pay the increase rather than drive far out of their way to get a cheaper gallon of gas.

I'm not sure if this option has been explored by the MTC and the member counties, but it ought to be. It's a sensible solution that would not only help spare transit agencies from "Armageddon" but would itself be a long overdue policy shift that would give a real boost to transit efforts in the SF Bay Area.

Robert Cruickshank :: The Gas Tax and Transit "Armageddon"
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Ready, Fire, Aim (0.00 / 0)
I'm a little concerned that stimulus money could go to projects that are ready, but may not the highest priority.  Mass transit is a great thing for cities, but regional mass transit is a little less wonderful.  So much of it depends on how ready a community is for transit--not how ready transit is for a community.

Let's take San Mateo County.  It is a bedroom community dominated by single-family homes.  If mass transit came to San Mateo County, what percent of the population would drive to get to the transit station vs. how many would walk.  Once that transit user got to his/her transit destination, how many would drive vs. how many would walk to their final destination.

Our suburban communities have been laid out for cars, not transit.  I wish it were not so, but it is.  San Francisco is perfect for mass transit, and we should do as much as possible to encourage it.  San Jose needs to consolidate more before it will really work well.  Oakland is ok, but could use better consolidation.

The point is, we should not waste stimulus money putting mass transit into areas that cannot support it due to established land use policies.  Transbay Terminal is a great project.  BART to Oakland Intl? I'm not so sure.  We should start with expanded and improved bus service and when a community is ready, move up to light rail, then heavy rail.

A regional gas tax?  I like the idea just for the energy conservation/pollution reduction/traffic reduction element to it.  


Oakland Airport (0.00 / 0)
"BART to Oakland Intl? I'm not so sure.  We should start with expanded and improved bus service and when a community is ready, move up to light rail, then heavy rail."

I guarantee you that the "community" is ready.


[ Parent ]
Actually (0.00 / 0)
San Mateo County is laid out for rail. It evolved around the rail line and a combination of bus service, greater densities around rail stations, and more frequent rail service (which HSR and Caltrain electrification will make possible) will actually make San Mateo County very, very transit-friendly. Perhaps moreso than any other part of the state, outside of SF and central LA.

You can check out any time you like but you can never leave

[ Parent ]
San Mateo County (0.00 / 0)
I used to work in San Mateo County and live in Palo Alto.  I LOVED riding my bike to CalTrain and going up to my job in downtown San Mateo and walking to work (the only part of that job that I miss).

To keep things in perspective, San Francisco MUNI has an average daily ridership of about 750,000.  San Mateo's SamTrans is at about 56,000.  CalTrain is at about 36,000.  San Mateo's population is about 90% of San Francisco.


[ Parent ]
How many BART boardings in San Mateo County? (0.00 / 0)
SamTrans isn't the only provider down there.  But the Bay Area is about as built out as it can get, and building up is inevitable - better to be prepared.

[ Parent ]
Re: Gas Tax (0.00 / 0)
Gerard Neilly at Baltimore InnerSpace wrote a really well thought out proposal for a national gas tax that you might be interested in reading

Reslice The American Pie - (But Make It Nutritious Pie)

Some snippets:

Simply put: The per-barrel price of oil should ideally be low, and the per-gallon pump price of gas should be high. This will provide the maximum benefit to the economy, the environment, world political stability and the transportation system.

Note that he specifically recommends that the revenue from the taxes NOT be dedicated solely to public transit/alternative energy investment.


Capital will inevitably be attracted to efficient transportation and alternate fuel development projects when the pump price of gasoline is allowed to rise to levels that make them viable and efficient, and no sooner.

Instead:

President Obama's tax cuts should be targeted to correlate as closely as possible to the amount that taxpayers would be paying in additional gas taxes if they maintained wasteful gas consumption habits.


[ Parent ]
His idea makes no sense (0.00 / 0)
The high gas prices of 2005-08 were responsible for bursting the housing bubble and sending the economy into a tailspin. I support higher gas taxes but they will only work if the money is used to expand mass transit options.

Sure, people stopped driving last summer, but at a huge economic cost. 60 years of sprawl and neglect of the transit infrastructure means America cannot presently absorb gas prices much above $2.50 without investing in alternatives.

Neilly is especially wrong to lump everyone calling for more infrastructure investment into the "concrete pourers" crowd and that remark suggests to me he basically lacks an understanding of the transit infrastructure in America.

You can check out any time you like but you can never leave


[ Parent ]
Tax revenues/Gas Prices (0.00 / 0)
Personally, I'm not entirely sold on the point about not devoting at least a significant portion of the revenue generated from the gas tax towards mass transit infrastructure. The need is very real there. It's just that the lobby for it is simply not as powerful as those of the highway builders and land developers.

But what I fear most about the stimulus bill is that what little money in it is allocated to developing infrastructure will be go to either propping up the existing highway/exurban development model or get sucked up by "shovel-ready" boondoggles like SF's Central Subway or LA's Gold Line Foothill extension. In that sense, I think Neilly's skepticism and call for maintaining the highest standards for potential projects is more than a little justified.

In terms of gas prices, while the latest oil shock was disastrous, we need to put a floor underneath gas prices and gradually and continuously raise it. This is a "stick" method of inducing demand reduction. Better to do this in a controlled manner via taxation and keep revenue in our own economy rather than have our economy continue to be held at the mercy of extortionate oil exporters.


[ Parent ]
OAK Transit Line (0.00 / 0)
It's not actually a BART spur as it would be an automated train much closer to the intra-airport system at SFO, but that aside.  If you haven't ridden the thing in 10 years I'd suggest you try it again next Christmas or Thanksgiving when the lines at the Coliseum station to get on the bus stretched down the block and every bus was crammed full.  This is one of the most cost effective projects in the East Bay and on that is sorely needed.  Not up there with a subway on Geary or Van Ness certainly, but something that will get lots of people out of their cars because I guarantee you that plenty of people end up driving rather than braving the jammed buses with their luggage, who would take BART instead if there was a rail line.

Good points (0.00 / 0)
Which is why I think we need to not be pitting long-overdue, smart projects like this against ongoing transit operating expenses. A regional gas tax would help backfill the lost STA money AND allow the BART to OAK train to be built.

You can check out any time you like but you can never leave

[ Parent ]
Agreed (0.00 / 0)
A people-mover is necessary, a BART extension is over-building.  Frankly, I avoid OAK because I'm in a wheelchair and taking a bus in a wheelchair with luggage is extremely frustrating.  And that's annoying for me, because I'd love to be able to utilize Southwest from Burbank to OAK, but for now, it's just not worth it, and I trust LA's FlyAway a lot more than I trust "AirBART."

[ Parent ]
regional tax initiatives (0.00 / 0)
i'm not certain but i think the legislature needs to give explicit permission for the MTC to put something like the regional gas tax on the ballot.  

while a good idea, the problem is that it runs up against the dreaded 2/3rds requirement.  why not make it a fee instead?

this actually brings up the question of whether CA's large regions should push for 'self-help' authority to be able to sidestep the state's problems with intractable republicans from rural areas.  the regions are overwhelmingly democratic and already serve as net subsidizers of the state's finances. while this generally goes against my belief that we in the state's wealthier areas are indeed obligated to support poorer regions, the alternative is that we both go down.  at least allowing us to do some self-help will keep things running until a broader political shift.  besides, i'd love to hear 'local control' and 'federalism' republicans arguing against a measure that devolves taxing power to a smaller level of government.


I'm all for making it a fee (0.00 / 0)
And the Legislature would likely need to give permission for a regional gas tax. Although I'm not entirely sure about that, since MTC has been able to put regional sales taxes on the ballot.

I would prefer a statewide solution because even the rural and exurban areas dominated by the Zombie Death Cult need transit too. But in the interim, regional solutions like this make sense.

In Washington State, for example, Sound Transit is funded largely by regional taxes that fall on Snohomish, King, and Pierce counties. It's a workable system. And your points about "local control" show the power of the arguments for such a move.

You can check out any time you like but you can never leave


[ Parent ]
Transportation systems (0.00 / 0)
We need complete transportation systems, with long-distance, regional, subregional, and local systems. The local systems need to include walkable and bikeable neighborhoods.

And the entire pot for transportation has to recognize all of the societal costs, especially the incredible cost for creating parking spaces for cars.

Over a fairly short period of time, if we invest the money that would go to new airports, roads, and parking spaces into other transportation modes, especially in places like San Mateo County and Orange County, we could move 30% of the trips from cars into other modes.

It might not work for Atherton or Newport Coast, but much of urbanized California is at high enough density to support new systems.  


The money for the train box is coming from the HSR funds (0.00 / 0)

The reporting in the Mercury is incorrect. The MTC staff initially proposed to fund the train box through the general stimulus funds, but now that the $8 billion has been added in for HSR, they are going to apply for that $75 million directly from the HSR funds. So there's really no controversy over this anymore.

The Oakland Airport Connector, on the other hand, is still a boondoggle that they propose supporting via the $70 million that local transit agencies desperately need right now. I wrote a post about this issue here.



I just saw that (0.00 / 0)
Thanks for pointing that out (hadn't read Transbay Blog yet today!). Good to hear that the train box is finally going to get funded (we hope).

You can check out any time you like but you can never leave

[ Parent ]
Re: Gas Tax (0.00 / 0)
NOTE: Apologies for the double post, but I accidentally posted this on the wrong thread.

Gerard Neilly at Baltimore InnerSpace wrote a really well thought out proposal for a national gas tax that you might be interested in reading

Reslice The American Pie - (But Make It Nutritious Pie)

Some snippets:

Simply put: The per-barrel price of oil should ideally be low, and the per-gallon pump price of gas should be high. This will provide the maximum benefit to the economy, the environment, world political stability and the transportation system.

Note that he specifically recommends that the revenue from the taxes NOT be dedicated solely to public transit/alternative energy investment.


Capital will inevitably be attracted to efficient transportation and alternate fuel development projects when the pump price of gasoline is allowed to rise to levels that make them viable and efficient, and no sooner.

Instead:

President Obama's tax cuts should be targeted to correlate as closely as possible to the amount that taxpayers would be paying in additional gas taxes if they maintained wasteful gas consumption habits.


Santa Clara County (0.00 / 0)
Santa Clara County, I think, is ripe ground for  public trans, but the VTA is certainly not the agency to oversee it. As someone who doesn't have a car and relies on the VTA every single gosh darned day, I think public transportation, if intelligently designed, could work well in SCC. As it is, I tend to spend the large chunk of my days waiting at bus stops thinking how, if I were God Empress of the World, how I'd redesign the VTA.

I took the BART shuttle in January at OAK, and I thought it was a joke that there was no Air BART shuttle to OAK. Its soooo close to the line, and the shuttle was jam packed, uncomfortable, and downright miserable.


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