Projects

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While the COVID-19 pandemic caused ridership on public transit and shared mobility to drop precipitously and put severe strain on their finances and operations, all was far from well prior to the pandemic. Transit ridership had dropped across the state in the half-decade prior to the pandemic, despite increasing public investment, and the relationship between shared mobility and regulators was oft-disputed. Thus, looking during and beyond the recovery from the pandemic, this project seeks to answer the question: what is and should be the future role and structure of public transit and public shared mobility in California?

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This project reports on the recent past, present, and immediate future of public transit finance in California and Southern California in light of the impacts of the COVID-19 pandemic. Initially, the financial situation of transit operators in the state and the region appeared dire, with plummeting ridership and fares and rising subsidies and operating costs. However, the three enormous federal pandemic relief bills brought billions of dollars to California transit agencies and helped them weather the fiscal storm, until many of the state and local tax revenue sources on which the state’s transit agencies rely bounced back and more quickly than most forecasters initially predicted. Yet in 2023, many of the state’s transit systems are struggling operationally and financially. Ridership began eroding in the half-decade leading up to 2020. While the federal pandemic relief bills provided a critical lifeline to keep struggling transit systems afloat early on, these funds are running out. Meanwhile, operating costs have risen, ridership and fare revenues have only partially returned, and some transit systems face “fiscal cliffs,” where they will need substantial new infusions of funding, substantial cuts in costs and service, or some combination of the two. Against this backdrop, this project examines the current state of California transit finance: why ridership and fare revenues are down and their prospects for recovery; what lessons the successful federal relief bills provide; why commuter-oriented systems are struggling financially much more than those that primarily service transit-reliant riders; and what the financial managers at transit systems have done to cope with this turbulent time and how they see their future financial prospects.

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Growing public interest in fare-free transit demands an assessment of fare-free and/or reduced transit fare programs, particularly how these programs may benefit disadvantaged communities, both urban and rural. Fare policy equity entials decisions about the similarities and differences in treatment afforded to various constituent groups. It also involves decisions about the extent to which travelers are expected to pay for the costs of serving their travel demand. This is of particular concern with regard to low-income, largely non-White, travelers, who are both disproportionately likely to use transit and to be burdened by the monetary costs of transit use. Given the foregoing, there is rising popular and scholarly interest in making public transit systems “fare-free.” Accordingly, in this research we will carefully review and synthesize the current states of both the practice of and research literature on fare-free transit. We will focus our review on the various dimensions of equity raised by charging for transit fares, and how they have/are likely to play out with conversion to fare-free transit service.

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This is the second study of voter-approved transportation sales taxes in Los Angeles County performed by the UCLA Institute of Transportation Studies with support from the Haynes Foundation. The earlier study examined the history of the four half cent sales taxes enacted by voters in Los Angeles County between 1980 and 2016. The current study looked in depth at four issues raised but not addressed in the first one. We report on the extent to which the “local return” provisions of the four measures fund transportation programs and projects in the cities and unincorporated areas of the county. We also explored tradeoffs between accountability to the voters through audits and taxpayer advisory committees in comparison with the county’s flexibility to change program elements through amendments when conditions change. Accountability to the voters was enhanced in the later sales tax measures but amendment procedures have been used to respond to changing needs in the county. We examined lawsuits brought against Metro regarding implementation of the sales taxes and found that there have been rather few. The COVID-19 pandemic struck while the study was underway and in response the report also explores the impacts of the pandemic on transportation sales tax revenues and program expenditures. The transportation sales taxes through the end of year 2020 have been the most important and resilient LA Metro funding sources during the pandemic. Sales tax revenue declined but far less than did federal and state sources of finance and revenues from fares paid by passengers.

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In California, driving is cheap and housing is expensive, and both these facts impede the state’s progress toward sustainability, safety and affordability. Efforts to solve these problems, however, often operate on parallel tracks: bold plans to increase housing production say little about congestion, and plans to address congestion rarely discuss the housing crisis. While these omissions are often understandable, they create a situation where policy proposals to solve one problem often flounder on concerns about the other one. Proposals to allow more development, even near transit, encounter resistance from neighbors concerned that development will bring congestion. Similarly, proposals to price roads encounter resistance based on the concern that California is already extremely expensive, and people have to live far from where they work because of the housing crisis. Somehow this policy gridlock must be resolved, if California will meet its stated goals of reducing VMT, reducing emissions, and building millions of units of housing.

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The project’s ultimate goal is threefold. First, we will deliver a broad but accurate and relevant snapshot of vulnerable travelers in California. Second, we will use that information to carefully consider how different forms of congestion pricing might improve or degrade equity. Third and most important, we will use lessons from other safety net programs, and particularly those operating in the utility industry in California, to propose specific safeguards for poor and marginalized populations that can be built into congestion charging programs. We examine the fairness implications of congestion pricing and propose policy mechanisms to mitigate its potential unfair outcomes. Our project first empirically establishes the broad contours of travel by vulnerable populations in California’s major metropolitan areas. We then examine particular forms of congestion charging, and evaluate how they might affect equity. Finally and most importantly, we draw on models of the guardrails instituted by other public utilities to illustrate ways to have congestion pricing while still protecting low-income travelers.

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The COVID-19 pandemic dramatically affected transportation systems, including the ability of localities to pay for them. This project explores the effects of the pandemic and the associated economic turbulence on local option sales taxes (LOSTs), an increasingly common revenue source for transportation in California and across the U.S. During times of economic weakness, spending and therefore LOST revenues will lag—the pattern in California counties during the initial months of the pandemic. Fortunately for local transportation budgets, LOST revenues recovered after the initial economic shock of COVID-19, albeit at a lower level than they likely would have otherwise. LOST revenue trends during the pandemic were affected by national and regional economic conditions and government policy as well. This public health crisis illustrates both the pitfalls and resilience of LOSTs during economic downturns and recoveries.

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Local Option Sales Taxes (LOSTs) are a popular form of local transportation finance in California. Researchers partially attribute the success of LOSTs to the inclusion of expenditure plans that outline specific projects and services to be delivered using measure revenue over the 20 or more years the measure will be in place. Expenditure plans are commitments on the part of sponsoring transportation agencies, but issues of accountability might compromise these commitments and we are not aware of any prior research into the tension between commitments to projects and commitments to accountability that are both included in LOSTs.This research will examine how well expenditure plans presented in measures reflect actual project delivery over the life of the sales tax.

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As the market share of zero-emissions hydrogen and electric vehicles increases in California, the motor vehicle fuel tax becomes less applicable as a user fee, and declining revenues could produce shortfalls for maintaining the transportation system. The authors of SB1 sought policy options to raise usage-based revenues from electric and zero-emissions transportation system users.This research was specified in SB1 as a study for the University of California at Davis. Professor Martin Wachs, an internationally-renowned transportation finance expert member of the SB 1077 Road User Charge Technical Advisory Committee, is assisting research at UC Davis with this study.