Finding New Avenues of Transit Funding

Sarah L. Catz is director of the Center for Urban Infrastructure at UC Irvine's Institute of Transportation Studies.

Whether the staggering state budget deficit is greater than $20 billion or $30 billion, statewide transportation cuts will add up to about $1.7 billion through the next fiscal year. Chances are excellent that the cuts will jeopardize at least one project in Orange County and the Southern California region that will directly affect daily trips to destinations important to you.

This wake-up call is forcing us to look beyond Sacramento to close the transportation financing gap. We need to find new ways to finance transportation projects that will move people, goods and vehicles as well as provide stable funding for already underfunded maintenance and improvements.

Southern California and Orange County in particular have been leaders in thinking outside the box when it comes to financing major transportation projects. In fact, Orange County is one of the most visionary regions in the country in terms of using innovative financing tools.

For example, in the mid-1980s, with state coffers running dry, the Transportation Corridor Agencies formed to plan, finance, build and operate a 67-mile public toll-road system now known as the San Joaquin Hills Transportation Corridor and the Foothill/Eastern Transportation Corridor.

About the same time, a privately owned and operated toll road was created -- the 91 Express Lanes. While a controversial noncompetition clause prohibited additional congestion-relieving improvements along the Riverside Freeway, the fact remains that none of the projects could have been built without the use of nontraditional financing tools that called for user fees or tolls.

Currently, the Orange County Transportation Authority and Placentia are collaborating with the Orange North American Trade Rail Access Corridor Authority to enhance speed, safety and mobility by eliminating 11 railroad crossings along one of the busiest freight corridors in the nation.

To fund much of this $500-million project, the agencies are working with federal officials to create innovative financing measures. One method under consideration is using a portion of the growth in custom revenue to expand and improve the nation's trade-related transportation infrastructure.

This revenue could be placed into a rail trust fund that would be dedicated to transit and rail freight movement across the United States. This fund would also provide a revenue stream for commuter rail agencies such as Metrolink.

Though costly, the elimination of railway crossings is of great importance because about 10% of our nation's international trade travels through Placentia and Orange County, contributing nearly $7 billion annually to the Orange County economy. It also generates about 11% of Orange County's annual sales tax revenue.

Other important local, regional and state projects could be funded through revenue sources that could be phased in. These include high-occupancy toll lanes, which permit solo drivers to pay for the privilege of using lanes that carpoolers use for free; allowing the private sector to lease rights-of-way and air space near and above park-and-ride lots and train stations to build low-income housing and commercial and retail establishments; the privatization of rest areas, transportation centers and train stations; and selling the right to name highways and other infrastructure.

Some of these methods would employ private capital to make up some or all of the shortfall in our transportation infrastructure investment, thus reducing traffic congestion, increasing mobility and reinvigorating our economy.

More than 10 years ago, Orange County took an innovative stance to provide transportation infrastructure.

Now the entire state must create bundles of opportunities in response to the challenges of an unprecedented budget deficit. Many funding ideas have been studied and shelved, buried by fear and misunderstanding.

It is time to bring all potential solutions out into the open and examine them anew for economic viability and potential to provide lasting public benefit. Quick fixes and isolated, ad-hoc solutions are no longer appropriate; it is the entire system of financing transportation that demands change.

Courage and trust are absolutely essential if we are to create and maintain innovation in sustainable infrastructure financing.

We need the courage of innovation from our elected leaders, and we must find in ourselves the willingness to trust the new course long enough to harvest the benefits.

Economic cycles and political gamesmanship must be avoided; sober-minded and comprehensive, creative approaches must be found and followed to success.

Building on the spirit of Orange County's leadership tradition, UC Irvine's Center for Urban Infrastructure has challenged elected and public officials, transportation policymakers and professionals and experts from the finance, legal, business and academic fields to gather at the Wyndham Hotel in Costa Mesa on Friday and decide on the first steps of a statewide plan that encourages Californians to consider innovative sources that will begin moving us toward a sane and sustainable funding environment.

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