Introduction to
Transportation Funding
Introduction to Tra­­nsportation Funding
A Primer for Understanding
Federal, State and
Local Revenue Sources
for Transportation.
Introduction to Tra­­nsportation Funding
Overview
Transportation in California is funded by a variety of federal, state and local revenue sources,
which fall into the following three basic categories:
User Fees
• Gas taxes (federal
and state)
• Diesel fuel taxes
(federal and state)
Property
Access Charges
Subsidies
• Property taxes
• Sales taxes
• Benefit assessment
districts
• Developer fees
• Federal, state and
local General Funds
• Externalized costs
• Vehicle weight fees
• Tolls
• Public transit fares
Together, these revenue sources produce roughly $23 billion a year for California’s transportation
system.
Federal
Federal transportation funding is generally apportioned to California based on the state’s contribution of revenues derived from federal excise taxes on motor vehicle fuels to the Highway Trust
Fund. These revenues pay mostly for capital improvements and expansion projects. In FY 2011,
California received about $4.5 billion in federal transportation funds. This amount accounted for
approximately 22 percent of the total funding for the state’s transportation system.
State
Ongoing state transportation funding consists primarily
of the state excise tax on gasoline and diesel fuel, and
the state sales tax on diesel fuel. Additional state funding sources can include bond revenues and appropriations from the General Fund. In FY 2011, state dollars
provided about $7 billion, or 30 percent, of the total
funding for transportation in California.
Local
Local dollars for transportation are derived from a
variety of revenue sources. These sources include a
statewide 1/4 percent tax on the sale of all goods and
services, additional optional local sales taxes that have
been approved by county voters, property taxes, and
public transit fares. In FY 2011, local funding totaled
$11 billion, constituting roughly 48 percent of all
revenues for transportation in California.
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Transportation Funding
Breakdown in California
Federal
22%
Local
48%
State
30%
FY 2011
Introduction to Transportation Funding
Federal Funding Sources
Federal transportation funding is generally provided according to a two-step process:
(1) authorization; and (2) appropriations.
Authorization
Authorizing legislation provides the legal authority for
the federal government to spend funds on programs
within a particular public policy area, such as transportation, for a given period of time. Usually covering a
period of five to six years, authorizing legislation sets
the maximum amount of funding that may be appropriated for programs within a particular public policy area
for each fiscal year of the authorization period. It also
includes provisions governing the structure of the various programs within a particular public policy area. The
current authorization bill for federal surface transportation programs is the Moving Ahead for Progress in the 21st Century Act (MAP-21).
Appropriations
Every year, Congress considers appropriations bills for all federal agencies, departments and
programs, including one for transportation. These measures provide the legal authority for federal
agencies to spend money during the upcoming fiscal year for the programs they administer.
In developing these appropriations bills, Congress may allocate funding for programs within a
particular policy area up to the maximum amount included in the related authorizing legislation,
but no more.
Highway Trust Fund
The Highway Revenue Act of 1956 established the Highway Trust Fund to provide a dedicated
source of revenues for transportation. The Highway Trust Fund is intended to be a “pay-as-yougo” system that uses receipts from excise taxes to fund federal surface transportation programs.
In 1983, the Highway Trust Fund was divided into the Highway Account and the Mass Transit
Account. Over the years, Congress has enacted multi-year legislation, such as MAP-21, authorizing federal spending for surface transportation programs from the Trust Fund.
Receipts from highway user fees, including federal excise taxes on motor vehicle fuels (gasoline,
diesel and special fuels) and truck-related taxes (truck and trailer sales, truck tires, and heavy
vehicle use), are transferred from the General Fund to the Highway Trust Fund. The current
federal gas tax rate is 18.4 cents per gallon. Of this amount, 0.1 cent is deposited into the Leaking
Underground Storage Tank Trust Fund. Of the remaining 18.3 cents, 15.44 cents is deposited
into the Highway Account and 2.86 cents into the Mass Transit Account.
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Distribution of Federal Gas Tax Revenues
MAP-21
Highway
Trust Fund
80%
Federal-Aid
Highway
Programs
18.4 cent
federal gas tax
20%
Highway
Account
Mass Transit
Account
Flexible
Funding
Programs
Transit
Programs
Some General
Fund Dollars
MAP-21
On July 6, 2012, President Barack Obama signed into law H.R. 4348, better known as the Moving
Ahead for Progress in the 21st Century Act (MAP-21). This legislation authorizes federal surface
transportation programs for two years, covering FY 2013 and FY 2014. MAP-21 took effect on
October 1, 2012, and runs through September 30, 2014.
For FY 2013 and FY 2014, MAP-21 authorizes surface transportation programs at current
funding levels, with a small adjustment for inflation, for a two-year total of $105 billion. For
federal-aid highway programs, this means $39.699 billion in obligational authority in FY 2013
and $40.256 billion in FY 2014. In the case of public transit, MAP-21 provides $10.578 billion
in FY 2013 and $10.695 billion in FY 2014.
In addition, the legislation extends the federal government’s authority to collect motor vehicle
fuel excise taxes through September 30, 2016, and truck excise taxes through September 30,
2017. By extending the authorization to collect these excise taxes beyond the two-year period
covered by the bill, MAP-21 provides additional stability in terms of the revenue sources that
are dedicated to the Highway Trust Fund.
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The roughly $21.2 billion gap between projected Highway Trust Fund revenues and MAP-21’s
$105 billion authorized spending level is covered through a number of sources, primarily by
using the revenues and savings that would be realized through changes to federal law pertaining
to pensions for both public- and private-sector employees, and by tapping into the portion of the
federal gasoline excise tax that currently goes to the Leaking Underground Storage Tank Trust
Fund. However, these are only short-term solutions that make a two-year bill work. Thus,
MAP-21 does not address the long-term solvency of the Highway Trust Fund. In fact, the
Congressional Budget Office (CBO) has noted that both the Highway and Mass Transit Accounts
in the Highway Trust Fund will face new deficits starting in FY 2015.
Introduction to Transportation Funding
MAP-21 includes important policy and structural changes
to federal surface transportation programs. In the case of
the Highway Title, MAP-21:
•
•
Collapses 90 separate funding programs into 30.
•
•
Eliminates earmarks.
•
Reforms various federal processes in order to expedite project delivery for both highway
and public transit projects.
Dedicates more than 92 percent of highway
contract authority to the following six “core”
programs: (1) National Highway Performance
Program; (2) Surface Transportation Program
(STP); (3) Highway Safety Improvement Program;
(4) Congestion Mitigation and Air Quality
Improvement Program (CMAQ); (5) Metropolitan
Planning; and (6) Transportation Alternatives
Program.
Introduces the use of performance metrics to drive states and metropolitan areas to target
federal resources to projects that would improve the condition and performance of their
multimodal transportation assets.
The changes to the Transit Title are aimed at providing more predictable and stable funding for
public transit agencies by:
•
Eliminating discretionary programs where funds were historically earmarked by
Congress.
•
Cutting back on the number of competitive grant programs administered by the U.S.
Department of Transportation.
•
Pushing more money through the formula programs.
Federal-Aid Highway Programs
With a few exceptions, federal-aid highway funds are apportioned to the states based on each
state’s share of total federal-aid highway funds received in FY 2012, and are programmed for
projects through processes determined by the states. MAP-21 requires adjustments to be made to
the apportionments to guarantee that each state receives a minimum return of 95 percent of the
amount of federal excise tax revenues that it contributes to the Highway Account.
The major federal-aid highway programs are as follows:
National Highway Performance Program
MAP-21 consolidates the old Interstate Maintenance, National Highway System and Highway
Bridge Programs into a new National Highway Performance Program that focuses on the most
critical 161,000 miles of roadways and bridges in the United States. The aim of this new formula
program is to improve conditions and performance on these facilities, with an emphasis on state
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of good repair. MAP-21 directs the Transportation
Secretary to conduct a rulemaking to establish
performance standards for the minimum condition of pavement and bridges on the National
Highway System, and requires states to develop
risk-based asset management plans for these
facilities. States that fail to meet these standards
over time would be required to spend a portion
of their National Highway Performance Program
funding to address the deficiencies. California’s
share of these funds will be programmed for
State Highway Operation and Protection Program
(SHOPP) projects, as well as through the State
Transportation Improvement Program (STIP)
process.
Highway Safety Improvement Program
This formula program provides federal resources to states for infrastructure improvements on public roadways that achieve a significant
reduction in traffic fatalities and serious injuries. Under the provisions
of MAP-21, states would be required to meet safety performance
targets over time and to spend a portion of these funds to address any
deficiencies if the targets are not met. The bill also requires an annual
set-aside of $220 million for highway-railroad grade crossing projects.
California’s share of these funds is primarily programmed through the
SHOPP.
Projects of National and Regional Significance Program
Under this program, funds are provided by the U.S. Department of Transportation on a competitive basis for major projects of national and regional significance that meet rigorous criteria and
eligibility requirements.
Transit Capital Investment Programs
The major programs that fall under this category are as follows:
Fixed Guideway New Starts and Extensions
These discretionary funds are primarily for major rail expansion, core capacity and bus rapid
transit projects. Candidate projects for these funds must go through a comprehensive evaluation
process and get rated by the Federal Transit Administration (FTA). Based on this process, FTA
recommends the projects to be funded during the upcoming fiscal year. A 20 percent local match
is required, although most public transit agencies provide a higher local match to make their
projects more competitive for these funds. In the past, VTA has received New Starts money
for the Guadalupe and Tasman West Light Rail Projects, and currently is receiving these funds
for the BART Silicon Valley Project.
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Small Starts
These discretionary funds are for smaller New-Starts-eligible projects with a federal share
of less than $75 million. Eligible projects include streetcars, trolleys, bus rapid transit, and
commuter rail.
Introduction to Transportation Funding
Projects cannot cost more than $250 million in order to be eligible for funding under this
program. Candidate projects for Small Starts funding also must go through an evaluation process
administered by FTA.
Transit Formula Programs
The major programs that fall under this category are as follows:
Urbanized Area Formula Program
These funds are allocated to public transit providers in urbanized
areas (UZAs) through a complex formula that takes into consideration
various transit service factors and can be used for any transit capital
purpose. However, the use of UZA formula funds for public transit
operations varies, depending on the population of a particular UZA.
These dollars cannot be used for operating assistance in UZAs with
more than 200,000 people. On the other hand, public transit systems
in UZAs with less than 200,000 people and small operators (less than 15 buses) in UZAs with
more than 200,000 people can use their formula funds for either operating or capital needs.
Under the provisions of MAP-21, these formula funds can be used for preventive maintenance in
all UZAs. They also can be used for paratransit services required by the federal Americans with
Disabilities Act (ADA), provided that the amount of UZA formula funds dedicated for this purpose does not exceed 10 percent and provided that the public transit operator is in full compliance
with ADA.
In UZAs with more than 200,000 people, MAP-21 requires 1 percent of UZA formula funds to be
spent on “transit enhancements.” The types of projects that qualify as transit enhancements are:
(1) the preservation, rehabilitation and operation of historic transit structures and facilities;
(2) bus shelters; (3) landscaping; (4) public art at transit stations; (5) pedestrian access and walkways; (6) bicycle access; (7) public transit connections to parks; (8) signage; and (9) enhanced
access to public transit for persons with disabilities.
For the most part, UZA formula funds that are used for public transit capital purposes require a 20
percent local match. However, capital projects that meet ADA or federal Clean Air Act mandates
require only a 10 percent local match. Operating assistance funds to UZAs with less than 200,000
people require a dollar-for-dollar match.
On average, VTA receives approximately $40 million-$45 million per year in UZA formula
funds, depending on federal appropriations levels. Typically, VTA uses these dollars for preventive maintenance, as well as for such capital projects as purchasing new buses, upgrading our
public transit communications system, making improvements to our bus maintenance facilities,
and constructing public transit centers and park & ride lots.
State of Good Repair Program
These funds are distributed by formula to UZAs for rehabilitation and enhancement projects
related to existing rail systems. On average, the San Jose UZA receives approximately $20 million-$25 million per year, depending on federal appropriations levels. The funds are shared by
VTA and the Caltrain Commuter Rail Service. VTA uses its portion to rehabilitate and upgrade
our light rail system. A 20 percent local match is required.
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Bus and Bus Facilities Program
These funds are distributed by formula to UZAs for the purchase of buses, and for the construction or upgrading of bus facilities. VTA uses its share, which is approximately $3 million$5 million a year, primarily for buying new buses. A 20 percent local match is required.
Rural Area Formula Program
These funds are allocated to public transit operators that are not in a UZA. In California,
Caltrans is responsible for administering these funds as directed by the California Transportation
Commission (CTC). VTA does not receive these funds.
Elderly and Persons with Disabilities Formula Program
These funds are allocated to public transit agencies and non-profit organizations to provide transportation services to elderly and disabled individuals who cannot use or do not have access to
public transit systems. The money also can be used for new transportation services beyond those
required by ADA for individuals with special mobility needs. The funding is allocated to UZAs
based on a formula that takes into consideration senior and disabled populations, with 60 percent
going to UZAs with a population of more than 200,000, 20 percent to UZAs with a population of
less than 200,000, and 20 percent to rural areas. Roughly $1 million per year is available to VTA,
depending on federal appropriations levels. As VTA’s paratransit broker, Outreach, Inc., is the
principal recipient of these funds locally.
Miscellaneous Transit Programs
Other programs included under the Transit Title of MAP-21 are as follows:
Metropolitan Planning
This program consists of funding for federally required planning studies that justify the need for
public transit-related equipment and facilities. VTA receives an annual amount of funding under
this program for the preparation of our Short Range Transit Plan (SRTP).
Innovative Public Transportation Workforce Development Program
MAP-21 created this new program to provide competitive grants for innovative workforce development and human resources activities within the public transit industry.
Public Transit Emergency Relief Program
Created under MAP-21, this new transit program is patterned after an existing program for highways and includes an open-ended General Fund authorization for “such sums as necessary.” It is
designed to help states and public transit agencies pay for protecting, repairing or replacing equipment and facilities that have suffered, or are in danger of suffering, serious damage as a result of
an emergency.
Flexible Funding Programs
Federal flexible funds can be used for highways or public transit. These funds are allocated
to states on a formula basis. A portion is then suballocated to the Metropolition Planning
Organizations (MPOs) for programming at the regional level. The major programs that fall
under this category are as follows:
8
Introduction to Transportation Funding
Surface Transportation Program (STP)
This flexible funding category under the Highway Title provides money for roadway, highway,
bridge, and public transit capital improvement projects. States must allocate at least 50 percent of
their STP funds to the MPOs according to a formula that is based on population.
Acting in its role as the congestion management agency (CMA) for Santa Clara County, VTA is
responsible for submitting to the Metropolition Transportation Commission (MTC) a prioritized
list of projects for our share of STP funds, which amounts to about $8 million-$15 million per
year, depending on federal appropriations levels.
Congestion Mitigation and Air Quality Improvement Program (CMAQ)
This is another category of flexible funds under the Highway Title. CMAQ funds, which are programmed by the MPOs, are available to urbanized areas that have not attained the ozone, carbon
monoxide or particulate matter air quality standards established under the federal Clean Air Act;
or that have been designated as maintenance areas for ozone, carbon monoxide or particular matter. The funds may be applied to projects and programs that will contribute to the attainment of
these air quality standards. Santa Clara County receives approximately $5 million-$10 million in
CMAQ funds per year, depending on federal appropriations levels. Similar to STP dollars, VTA
is responsible for submitting Santa Clara County’s prioritized list of projects for CMAQ funds
to MTC.
Transportation Alternatives Program
MAP-21 consolidates the Transportation Enhancements, Safe Routes to School, Recreational
Trails, and Scenic Byways Programs into a new Transportation Alternatives Program. Under this
new program, 50 percent of the funding is allocated to the MPOs and 50 percent to the states.
State Funding Sources
Overview
A large portion of transportation funding in California is collected at the pump. In the case of
gasoline, revenues for transportation are collected in the following manner:
•
18 cents in state excise taxes for each gallon
purchased. This is considered to be the “base” rate.
•
17.3 cents in state excise taxes for each gallon
purchased. This increment of the state excise tax
was imposed in 2011 to compensate for exempting
gasoline from the state sales tax. It gets adjusted
on an annual basis, so that the money generated
is equivalent to the amount that would have
been raised had the state sales tax still applied
to gasoline.
•
18.4 cents in federal excise taxes for each gallon
purchased.
•
Local sales taxes.
Gallon of Gasoline
Base Price
+
Federal Excise
Tax (18.4¢)
+
State Excise
Tax (35.3¢)
+
Local
Sales Taxes
Gallon of Diesel
Base Price
+
Federal Excise
Tax (24.4¢)
+
State Excise
Tax (13.6¢)
+
State Sales
(
)
Tax (6.75¢)
+
Local
Sales Taxes
9
For diesel fuel, the following applies:
•
13.6 cents in state excise taxes for each gallon purchased. If the state sales tax rate for
diesel fuel gets changed, this rate is adjusted accordingly to ensure that there is not a net
increase or decrease in taxes for consumers at the pump.
•
24.4 cents in federal excise taxes for each gallon purchased.
•
State and local sales taxes
State Highway Account
Revenues generated from federal and state gasoline and diesel fuel taxes, and from vehicle weight
fees are deposited into the State Highway Account. Vehicle weight fee revenues are then transferred to the General Fund to pay for debt service on general obligation bonds that have been
issued for transportation purposes. Of the remaining balance in the State Highway Account,
funds for Caltrans administration; maintenance of the state highway system; and rehabilitation,
safety and seismic retrofit projects related to the state highway system identified in the State
Highway Operation and Protection Program (SHOPP) are taken “off the top.” Any remaining
funds are then programmed through the State Transportation Improvement Program (STIP).
The STIP, which is adopted during even numbered years by the California Transportation
Commission (CTC), outlines the cost and schedule estimates for all transportation capital
improvement projects funded with fuel tax revenues from the State Highway Account. Any
transportation capital improvement project is eligible for funding through the STIP, including the
construction of fixed guideway mass transit projects. However, public transit vehicle purchases
and operations are not eligible expenditures under the STIP because Article XIX of the California
Constitution prohibits the use of fuel tax revenues for these purposes.
State Highway Account
Sources
of Funds
Programs
Funded
State highway maintenance,
operations and planning
State and
federal
fuel taxes
State
Highway
Account
State Highway Operation and
Protection Program (SHOPP): Safety
and rehabilitation projects on the
state highway system
State Transportation Improvement
Program (STIP):
75% Regional
25% Interregional
State Highway Account
10
Introduction to Transportation Funding
State Transportation Improvement Program (STIP)
SB 45 (Kopp), which was enacted into law in 1997, brought about various changes to the process
for programming transportation dollars through the STIP. In general, this legislation simplified
the programming process by consolidating nine separate state transportation funding pots into
two broad categories: (1) the Regional Transportation Improvement Program (RTIP); and (2) the
Interregional Transportation Improvement Program (ITIP). In addition, SB 45 devolved a significant amount of programming responsibility from the CTC to the regional transportation planning
agencies (RTPAs), such as MTC in the Bay Area. The bill also shortened the STIP from a sevenyear program to a four-year program, although a subsequent measure changed the length of the
STIP to five years.
Under SB 45, the RTPAs have programming responsibility for 75 percent of available STIP funds
through their RTIPs. Of this amount, 60 percent flows to the counties in Southern California and
40 percent to the counties in Northern California. This formula is known as the “north-south
split.” The RTPAs then select projects to include in their RTIPs consistent with “county guarantees.” County guarantees, a formula calculation based on population and center lane highway
miles, ensure that individual counties receive their fair share of STIP dollars. VTA’s annual
county guarantee amount can range from $30 million to $60 million, depending on the amount
of STIP funding that is available.
Projects that are eligible to be programmed at the regional level include: (1) state highways;
(2) local streets and roads; (3) rail and other public transit capital improvements; (4) bicycle and
pedestrian facilities; (5) grade separations; (6) transportation system management activities;
(7) soundwalls; and (8) intermodal facilities. Under the provisions of SB 45, the RTIPs must be
State Transportation Improvement Program (STIP)
STIP Programming Process
75% Regional
60% to
south
25% Interregional
40% to
north
RTPAs select projects for their RTIPs
consistent with county guarantees. County
guarantees are based on population and
center lane highway miles
2.25%
Intercity Rail
15% Interregional
Roads in Rural
Areas
No geographic
balance
10% Projects of
Statewide Significance
Subject to
north/south split;
county guarantees
do not apply
RTPAs present their RTIPs to the
CTC
Nominated by Caltrans with input from
RTPAs and programmed by the CTC
CTC approves or disapproves
RTIPs in their entirely
RTPAs = Regional Transportation Planning Agencies
RTIPs = Regional Transportation Improvement Programs
CTC = California Transportation Commission
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submitted to the CTC for inclusion in the STIP. However, the CTC cannot modify an RTIP. The
commission can only accept or reject an RTIP in its entirety.
The state retains programming responsibility for the remaining 25 percent of available STIP
dollars through the ITIP. This program is intended to fund: (1) projects that facilitate the interregional movement of people and goods; (2) projects that are considered to be of statewide significance; (3) projects on the interregional road system that are outside the boundaries of the urban
areas; and (4) intercity rail capital improvements. These projects are nominated by Caltrans with some input from the RTPAs and are programmed
by the CTC.
State Highway Operation and Protection Program
(SHOPP)
The SHOPP is a five-year program of projects adopted by the CTC separately from the STIP. These funds are used for safety, rehabilitation, seismic
retrofit, bridge replacement, landscaping, and operational improvement
projects on the state highway system. SHOPP funding is derived from both
state and federal fuel taxes. VTA does not receive SHOPP funds.
Transportation Development Act (TDA)
Enacted in 1971, TDA allows each county in California to elect to impose a ¼ percent sales tax
to be collected by the state Board of Equalization and returned on a pro rata basis for public transportation purposes. TDA funds are apportioned by the state through the RTPAs to each participating county based on the amount collected within the county. In Santa Clara County, TDA funds
are allocated as follows:
•
90 percent to VTA for public transit operating purposes. This amounts to approximately
$80 million per year.
•
5 percent, or about $4 million per year, to VTA in the form of TDA Article 4 funds for
community and paratransit services.
•
2 percent in the form of TDA Article 3 funds for bicycle and pedestrian projects, which
are sponsored by a city or the county, and are prioritized by VTA. Santa Clara County
receives approximately $1.5 million per year in TDA Article 3 funds.
•
3 percent, or approximately $2.3 million per year, retained by MTC for administration
and planning purposes.
Public Transportation Account (PTA)
Revenues in the PTA are derived from the sales tax on diesel
fuel. These revenues are allocated as follows. In the case of
the amount generated by the “base” sales tax rate for diesel
fuel of 4.75 percent, half goes to the State Transit Assistance
Program (STA), which provides funds primarily for public
transit operating and capital purposes. The remaining
50 percent is used to fund:
•
12
Mass transit planning activities of Caltrans and the CTC.
Introduction to Transportation Funding
Public Transportation Account
Sales tax on
diesel fuel
PTA
Base sales
tax rate
of 4.75%
Amount Exceeding
Base Rate
State Transit Assistance
Program (STA)
50%
State Transit Assistance
Program (STA)
50%
•
•
•
•
•
•
T
•
Caltrans transit administration and planning
•
California Transportation Commission transit planning
California High-Speed Rail Authority
Public Utilities Commission for rail safety
Intercity rail for operating and capital purposes
Developmentally disabled transportation services
•
Passenger rail safety responsibilities of the California Public Utilities Commission (CPUC).
•
Operating costs of the state’s intercity rail system.
•
Rolling stock acquisition and other capital projects for intercity rail.
•
California High-Speed Rail Authority, which was created through legislation passed in
1997 to oversee the development of the state’s proposed high-speed train system.
•
Transportation for the clients of the state’s regional occupational centers.
This portion of PTA revenues also can be used to fund transit capital improvement projects,
including public transit vehicle purchases, that are programmed through the STIP process.
With regard to PTA revenues derived from the state sales tax rate for diesel fuel above the base of
4.75 percent, 100 percent goes to STA.
State Transit Assistance Program (STA)
STA funds are apportioned to the RTPAs according to a formula based on population and annual
transit operator revenues, and are then distributed by these agencies to the various public transit
operators within their regions.
13
In the Bay Area, MTC usually receives about 38 percent of the state’s available STA funds per
year. MTC allocates the revenue-based funds to public transit operators in the region on a
formula basis. Historically, VTA’s annual share has ranged from about $5 million to as high as
$16 million. The distribution of the population-based funds is at MTC’s discretion.
Proposition 1B: Transportation Bonds
In November 2006, the voters of California approved Proposition 1B, which authorizes the state
to issue $19.925 billion in general obligation bonds for transportation purposes over a 10-year
period, subject to annual appropriations by the Legislature. The proceeds from the sale of these
bonds fund a combination of: (a) existing programs, such as the STIP and SHOPP; and (b) several new programs designed to address some of California’s emerging transportation needs, such
as goods movement, corridor mobility and public transit security.
The method for distributing the bond proceeds from Proposition 1B varies by program category.
In some cases, such as the STIP and SHOPP, the funding gets allocated to projects in accordance
with processes in existing law. In other cases, such as the State-Local Partnership Program and
public transit security, the Legislature defined the process for allocating the funds. And some
programs, such as the Corridor Mobility Improvement Account (CMIA) and the Trade Corridors
Improvement Fund (TCIF), were designed to be competitive in nature, with the CTC selecting the
projects to be funded based on guidelines and a set of performance criteria.
The major Proposition 1B program categories are as follows:
Corridor Mobility Improvement Account (CMIA)
This competitive grant program administered by the CTC provides $4.5 billion for projects that
are designed to improve mobility in highly congested highway corridors.
Trade Corridors Improvement Fund (TCIF)
This competitive grant program provides $2
billion for infrastructure improvements along
federally designated “Trade Corridors of National
Significance” and along other corridors with a
high volume of freight movement. It is administered by the CTC. No projects in Santa Clara
County were selected by the CTC for funding
under this program.
STIP and SHOPP Augmentations
Proposition 1B provides $2 billion to be programmed through the existing STIP process and
$500 million for the SHOPP.
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Santa Clara County CMIA Projects
1. I-880 HOV lanes between Milpitas and
San Jose = $72 million.
2. U.S. 101 improvements between Mountain
View and the San Mateo County line =
$85 million.
3. U.S. 101 improvements in the Evergreen
area of San Jose = $54 million.
4. I-880/I-280/Stevens Creek Boulevard
Interchange Improvements = $31 million.
Public Transportation Modernization, Improvement and Service Enhancement
Account (PTMISEA)
This formula program provides $3.6 billion to public transit operators for the following:
(a) rehabilitation, safety or modernization improvements; (b) capital service enhancements or
expansions; (c) new capital projects; (d) bus rapid transit improvements; and (e) bus and rail
car procurement, rehabilitation or replacement. VTA’s formula share under this program is
approximately $125 million.
Introduction to Transportation Funding
State-Local Partnership Program
This formula program provides $1 billion to local
and regional entities with voter-approved sales taxes,
tolls or property taxes for transportation purposes.
VTA’s formula share under this program is roughly
$47 million.
Transit System Safety, Security and Disaster
Response Account (TSSSDRA)
This formula program provides $1 billion to public
transit operators for: (a) capital projects that increase
protection against a security or safety threat; and
(b) capital expenditures to increase the capacity of
public transit operators to develop disaster response
transportation systems that can move people and goods, as well as emergency personnel and
equipment, in the aftermath of a disaster. VTA’s formula share under this program is about $24
million.
Highway-Railroad Crossing Safety Account
This competitive grant program administered by the CTC provides $250 million for the completion of high-priority grade separation and railroad crossing safety improvements. VTA, in
partnership with the city of Fremont, received $19.6 million under this program for two grade
separation projects: (1) Warren Avenue = $9.6 million; and (2) Kato Road = $10 million. Both of
these projects will facilitate the implementation of the BART Silicon Valley Project.
Local Streets and Road Improvement, Congestion Relief, and Traffic Safety Account
This formula program provides $2 billion to cities and counties for local street and road maintenance and improvement projects. Of this amount, $1 billion gets allocated to counties based on
vehicle registrations and maintained county road miles, and $1 billion to cities based on population. However, in the case of the cities’ share, each jurisdiction is guaranteed a minimum amount
of $400,000, regardless of population. Local jurisdictions within Santa Clara County collectively
will receive about $92 million under this program.
The following chart summarizes the program categories under Proposition 1B:
Transportation Fund for Clean Air Program (TFCA)
TFCA was established in 1991 through the enactment of AB 434 (Sher), which increased vehicle
registration fees in the Bay Area by $4 to fund projects and programs that help reduce vehicle
emissions. Eligible projects include: (1) ridesharing; (2) clean-fuel vehicles; (3) signal synchronization; (4) regional transit information systems; (5) congestion pricing; and (6) bicycle facilities.
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TFCA funds in the Bay Area are distributed as follows:
Proposition 1B Program Category
Amount
Public Transit Capital1
$3.6 billion
Intercity Rail
$400 million
Corridor Mobility2
$4.5 billion
State Route 99
$1 billion
State Transportation Improvement Program (STIP)
$2 billion
State Highway Operation and Protection Program (SHOPP)3
$750 million
State-Local Partnership Program
$1 billion
Goods Movement4
$3.1 billion
Air Quality: School Bus Diesel Retrofit
$200 million
Transit Safety, Security and Disaster Response
$1 billion
Local Bridge Seismic Retrofit
$125 million
Highway-Railroad Grade Separations
$250 million
Local Streets and Roads5
$2 billion
Total
$19.925 billion
Notes:
1. Distributed to public transit operators
throughout California according to
the existing State Transit Assistance
Program (STA) formula.
2. Projects were selected by the California
Transportation Commission (CTC)
pursuant to the north/south split formula.
3. Of the $750 million provided,
$250 million is dedicated to intelligent
transportation system (ITS) improvements on local streets and roads.
4. Of the $3.1 billion provided, $2 billion
is for improvements to key trade
corridors in California, $1 billion
for goods movement air quality
improvements and $100 million for
port security.
5. Of the $2 billion provided, $1 billion
gets allocated to counties based on
motor vehicle registrations and county-maintained road mileage, and
$1 billion to cities based on population.
•
60 percent allocated on a competitive basis by the Bay Area Air Quality Management
District (BAAQMD). The air district programs approximately $10 million per year in
“TFCA 60 percent funds.”
•
40 percent administered by a program manager selected in each county. VTA is responsible for programming “TFCA 40 percent funds” in Santa Clara County, which total about
$2 million per year.
Local Funding Sources
Counties may place a sales tax measure for transportation purposes on the ballot for voter
approval. With federal and state funding historically being insufficient to meet all of California’s
mobility needs, local sales tax revenues have provided more than 50 percent of new capital funding for the state’s transportation infrastructure over the last several decades. Counties representing more than 85 percent of the state’s population currently have in place local sales taxes for
transportation purposes. Most of these taxes are temporary in nature and will expire if they are
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Introduction to Transportation Funding
not renewed by the voters.
In 1995, the California Supreme Court ruled in Santa Clara County Local Transportation
Authority vs. Guardino that a two-thirds majority vote is required to renew existing or to enact
new local transportation sales taxes. This case involved a half-cent, local sales tax that was
passed by a 54 percent majority vote in Santa Clara County in 1992. The tax was intended to be
imposed for 20 years in order to fund a set of transportation capital improvement projects. Under
this program, approximately 90 percent of the money was proposed to be used for public transit
improvements, including the construction and operation of several new light rail lines. However,
the Supreme Court ruled that the program constituted a special tax and, therefore, needed a twothirds, not a simple majority, vote for approval. As a result of the court’s decision, the tax was
invalidated, and the program was never implemented.
Currently, Santa Clara County has three local transportation sales taxes in place. One is permanent and two are temporary.
1976 Measure A
In 1976, the voters of Santa Clara County approved a half-cent, local sales tax known as Measure
A to fund public transit operations. This sales tax, which is permanent, provides more than 50
percent of VTA’s public transit operating budget. On average, these revenues total about $160
million per year, depending on the economy.
2000 Measure A Transit Improvement Program
In 2000, VTA’s Board of Directors placed a half-cent, local transit sales tax on the ballot, which
was approved by more than 70 percent of the vote. This tax took effect in April 2006 and will be
imposed for a 30-year period ending in March 2036. All of the revenues generated by this tax will
be used for public transit capital improvement projects and operations.
2008 Measure B
By a two-thirds majority, Santa Clara County voters approved Measure B in November 2008, a
30-year, 1/8-cent local sales tax dedicated solely for funding the operating and maintenance costs
associated with the BART Silicon Valley Project. The 2008 Measure B sales tax took effect in
July 2012.
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NOTES:
NOTES:
Linking Land Use with Transportation
NOTES:
Linking Land Use with Transportation
12/04-8280