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GREEN CITY Environmentalists are pondering the state’s seemingly schizophrenic approach to fighting climate change after a recent state report encouraging increased use of mass transit came out at the same time that the governor’s budget proposal denies the state’s public transportation fund more than $1 billion.
The California Air Resource Board’s June 26 Draft Scoping Plan to combat global warming, released pursuant to Assembly Bill 32, the California Global Warming Solutions Act of 2006, is at least the second major report this year to recommend expanding public transit. But the governor’s latest spending plan redirects that sizeable chunk of money — gasoline tax revenue that voters who approved Prop. 42 in 2002 directed toward transportation projects and agencies — to help reduce the state’s $17 billion budget deficit.
"There’s a lot of misallocation of resources going on," said Tom Radulovich, executive director of the San Francisco nonprofit Livable Cities. "The governor on the one hand wants to say, ‘You should all ride mass transit.’ But on the other hand, he is taking away [transit] support from the state budget."
The governor’s press secretary, Aaron McLear, said the budget proposal spares transit from cuts faced by other programs during these tough economic times.
"Funding for public transportation stays level in the governor’s budget proposal. That’s in the face of a $17 billion deficit. The fact that it remains level is better than a lot of cuts we’ve had to make," McLear said. "We wish we could increase it, because it certainly is something the governor believes in. But again, the state is facing a $17 billion shortfall. We can only spend the money that we have. There will have to be some tough decisions to be made."
The CARB plan calls for California to lead by example by encouraging state employees to take advantage of public transportation during their commutes. It notes that transportation accounts for 38 percent of California’s greenhouse gas emissions, most of which comes from cars and trucks, and that curbing these emissions is critical to reaching California’s goal of reducing total emissions by 30 percent over the next 12 years.
"Overall I think this is headed in the right direction. For better or worse, this really does put California ahead of any other state if we fully implement this plan. Of course, having a good plan does not guarantee that it will be implemented, but this is a very serious attempt," said Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association, of the state’s global warming plan.
Yet he also said that reaching the plan’s ambitious goals for reducing greenhouse gases means people will have to drive less and use transit more, and that local governments will need to stop approving urban sprawl projects.
"The easy answer that most Americans would rather have is to keep driving just as much as always, but have alternative fuels. And that just is not going to work. AB 32 has a major land use change component. Is it enough? No, it is not. But it is at least an acknowledgment of what we have to do," Metcalf said. "Overall I’m pretty impressed, but they’re not proposing enough land use change and they’re not proposing transit funding increases. They are still unwilling to face facts about the role of the automobile and climate change."
Yet instead of increasing funds for mass transit, the governor has redirected billions of public transportation dollars into the general fund, maintaining status quo transit funding in the face of increased gasoline prices and the new climate change mandate. At the same time, billions of dollars have been allocated to highway expansion programs, exacerbating the global warming problem.
"Anybody’s budget should be a reflection of their values, whether it’s an individual or an agency," said Carli Paine, transportation program director for the Transportation and Land Use Coalition. "The state is saying, ‘We value public transportation as a climate friendly choice.’ Yet when it comes to expressing those values in the budget, we say, ‘It doesn’t matter that much,’ so we’re actually undermining those original statements."
The governor’s revised state budget allocated $306 million to the State Transit Assistance Program, the state’s source of funding for mass transit operating costs such as maintenance, drivers, fuel, and mechanics.
This is the same amount that was allocated last year, even though transit ridership is the highest it has been in more than 50 years, according to a June report by the American Public Transportation Association. And factor in that crude oil is about $140 per barrel now compared to about $73 per barrel this time in 2007, according to the Energy Information Administration, a federal agency. "The budget is kicking transit in the teeth when it needs it [money] the most," Radulovich said.
The $306 million allocated to the State Transit Assistance Program comes from funds generated by Prop. 42, the voter-approved gasoline tax measure. But Paine said the STAP should also be entitled to what is called "spillover" money. Spillover refers to additional funds generated when the price of gas rises faster than inflation on other goods, leading to unusually high revenue from the tax.
The governor’s budget predicts $1.77 billion in spillover for the 2008–09 fiscal year, but he decided to put the money toward shrinking the deficit instead of funding public transportation. The current fiscal year was the first time since the proposition passed that the spillover did not go toward public transportation.
Radulovich said he believes the state is hesitant to fund mass transit — even though it recognizes the importance of reducing the number of cars on the road — because building more roads and freeways leads to more expansion and urban sprawl.
"Sprawl makes a lot of people a lot of money," he said, including oil companies, car companies, homebuilders, construction firms, and trucking companies. "These are political questions, not policy questions. The policy answers in many ways are very clear. The question is whether there is the political will to deal with it, and that’s what we’re going to find out."
Radulovich said this reality is why many California business groups support outward expansion and put pressure on the government to fund highways over mass transit. The Bay Area Council, for example, pushed aggressively for highway expansion during the last budget cycle.
Paine said she believes political pressure also comes from structural flaws in the state’s budget system.
"It’s the legacy of Prop. 13, which really froze the income our state received from [property] taxes," she said. "Public entities that are committed to social services, such as education, are still receiving property taxes at levels that are decades behind what they used to be." This puts a strain on the state’s general fund, and money has to be diverted from the mass transit account to relieve the burden generated by California’s low income tax levels, Paine explained.
Paine said a new budget proposal has been submitted to the California legislature that would restore hundreds of millions of dollars to the mass transit account for the 2008-09 fiscal year by generating additional revenue for the general fund. She said that since 2000, more than $3 billion of mass transit money has been redirected to the general fund, and the number will exceed $4 billion if the governor’s current proposal goes through.
"This isn’t just a problem this year — it’s a chronic problem. And public transportation is chronically being leaned on for relief," she said. "It’s just not a sustainable system."
TRANSIT FUNDING 101
Carli Paine of the Transportation and Land Use Coalition explained the finer points of California’s complicated system for funding — or not funding — improvements to the public transit system. Transit’s main account is called the State Transit Assistance Program. This money is flexible, but is mostly used for transit operations (maintenance, operations, fuel, mechanics, drivers, and so forth). Sometimes, though, it is used for capital projects (such as buying new tracks or replacement cars).
The STAP is the largest portion of the public transportation account, and the funding is critical. As Paine put it, "If you can’t even operate the system that you have, it doesn’t help much to have money to lay new tracks." The STAP is therefore often the focus of discussions about transit funding.
Prop. 42, which directs California’s gas tax to transportation projects, funds the STAP, although not all Prop. 42 money goes there. For example, 25 percent of Prop. 42 revenue goes to a special account for transit capital projects.
Prop. 1B is another big source of transit funding. It is the 2006 measure that allowed California to sell $19.9 billion worth of bonds to fund transportation programs. Only about $4 billion of that was allocated to public transportation, with the lion’s share of the money going toward new freeway projects.
This is where things get a little complicated.
California originally had a sales tax on all goods except gasoline. In the 1970s, voters passed Prop. 42, which decided that it would be more equitable to reduce the sales tax rate by a fraction of a percentage point, but expand the sales tax to include gasoline.
This was expected to be revenue-neutral for the state, so it wouldn’t cost people more. That was true unless gas prices rose quicker than the cost of all goods, which it eventually did.
Then-Gov. Ronald Reagan argued that it was important to return the extra revenue to public transportation because when gas prices rise, more people use public transit. As a result, this "spillover" has been set aside for transit expansion.
Last year was the first year in which the spillover was diverted to the general fund instead of being given to the STAP. It was redirected to help close the state deficit, and the 2008–09 budget proposes doing the same thing this fiscal year. (Janna Brancolini)