Paying Dearly for Our Transportation
by Tony Chavira
Back in the madcap year of 2006, Los Angeles voters decided that it was the perfect economic climate to approve Proposition 1B, a measure that would authorize $19.925 billion in state bonds to pay for transportation projects. Some of the bonds ended up paying for the Expo light rail’s first phase, some for widening the 405 freeway and some for extending the Orange Line north at Canoga Boulevard. Back then, it seemed that every kind of investment was Triple-A rated, and government bonds were at the top of the heap in terms of safe investments. So once the measure passed, the first round of bond sales began, alongside an interesting negotiation between Caltrans and L.A. Metro: since L.A. voters wanted the projects green-lit but Caltrans oversaw the development of freeways, Caltrans let L.A. Metro devise a creative Design-Build contract that would start these projects sooner and get them done faster. For those not hip to the construction lingo, Design-Build projects are the kind that aren’t budgeted in phases (like research, design, and construction) done by different people, one part at a time. Instead, one big sum of money does it all, and usually one large firm is hired to execute the whole thing.
In 2010, we voted Jerry Brown into office again to make the tough decisions it would take to balance the budget. Today. he has cancelled the sale of two of those bonds and left Los Angeles on the hook for $573 million for projects already underway. What happens now, you ask? We have three alternatives.
- Beg the State. We can lobby the state for the money by pointing out that the construction contracts have already been signed, so cancelling them would be a breach of a lot of contracts. (Or just that safety and decency compel us to complete them). Caltrans has a capital budget of $11.8 billion for highway upgrades and $423 million for mass transit as part of their 2009-2010 operating budget. Much of it has likely been used up, but maybe there’s enough to push these projects to completion. Hey, it’s better than having exposed metal and concrete on the 405.
- Close the Projects. This would balance the books, and not necessarily be illegal in terms of ending the Design-Build relationships. Based on how most city contracts work, L.A. Metro project managers can just give the contractors 30 days notice that the project will end, have the contractors wrap up whatever work they’ve done, patch up stuff that might be dangerous, and leave the project half done. This’ll make it much harder to complete the rest of the project later, if we ever get the money.
- Pay For The Projects Ourselves. If we shuffle the projects into Metro’s official budget, we can take money from future projects and other services. Otherwise, we borrow money from ourselves for an indefinite period until a future round of bond sales goes down. Or we just pay out of pocket and lose the money.
Our problem here was that, being the overzealous, big-picture types that we are in Los Angeles, we wanted to fast-track these projects, even though the bonds had yet to be sold. Was that presumptuous? Yeah, a bit ... but most bond measures approved by voters are for these kinds of projects. Why would anyone pull the carpet out from under us? We voted for the bond money; it should be there when we need it.
Is Jerry Brown overstepping by cancelling a clearly needed round of bond sales this quarter? I think yes, but only because it’s so damn last minute. They were scheduled to be sold by May, and too little heads-up was given to city officials, who might’ve been able to better prepare. Obviously, this issue matters a lot to city and county officials in an area with more than a quarter of the state’s population. On top of that, there are other projects throughout the state tied to this bond sale, though many are not under construction. By cancelling this round of sales, Brown has effectively told us “figure it out” and left us to fend for ourselves.
So what’s the best option? It’s easy to say “get the money from the state,” except that Caltrans has supermassive operating costs. Besides, they hadn’t planned on paying for these projects out of pocket: voters approved a bond measure for them. If we can’t get the money from the state, stopping the projects midway seems like the worst option. If anything were done in a rush or to a subpar level, we’d potentially put people on the 405 in danger. And we’d have a half-completed Orange Line extension rolling through Canoga Park, forcing already-bad traffic to re-route without adding anything to the community but an obstacle. It’s a measly four miles long, with a bike path and pedestrian pathway that are almost done, it’s exactly the kind of thing we need in the valley to give it some car-free connectivity, but it’s still a $216 million upgrade.
It’s not entirely the governor’s fault. Brown’s financial office expected that the state legislature would have finished its bickering long enough to put a $12 billion tax extension on the ballot. Political squabbling has delayed that ballot measure until fall ... just in time for another round of bond sales.
What else does it mean if Governor Brown can cancel bond sales at the last minute like this? First, if he does it again, the county of Los Angeles will lose another $400 million in project/maintenance funds in the fall. Second, future funds for projects like the Crenshaw Line, the Green Line Extension, the Expo Line, and the Subway to the Sea will be in jeopardy. In other words, the money from the tax increase we voted for in 2008 (Measure R) is in danger because bonds we voted for (Proposition 1B) were not approved for sale based on a measure we haven’t voted for yet (because the state’s taking its sweet-ass time).
What does this mean for the future of transit in Los Angeles? It’s old news that very little in the Metro budget goes to public transportation projects and most of it goes to improving streets and highways. But as the cost of gas rises, fewer people will be driving, and more will be begging for transit infrastructure. If it’s not there, if there are too few trains, uncoordinated buses, no bike routes, and cracked, broken sidewalks, what will that say about Los Angeles’s transportation priorities? The National Association of Realtors recently released the Community Preference Survey, a breakdown to show the kinds of neighborhoods and development that are most marketable. It found that people overwhelmingly preferred neighborhoods they could easily get around without a car: by walking, biking, or taking easy-to-access public transportation. Back in 2007, the same group did a study called the Growth and Transportation Survey that showed that three-quarters of Americans believed that improving public transportation alongside development was the best way to alleviate future traffic and reduce the impact of global warming.
And yet, we are being forced by our state to divert funds away from public transportation projects to pay for incomplete road projects. This feels like a failure for both democracy and public preference. We voted for this money, we deserve to see it used on our projects. But I guess when the budget needs to get balanced, even projects that add value to your community will be cut.
This is the California we live in now. Why bother looking into the future when you can play politics now?