Local sales tax can stall impact of missing federal transportation dollars

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U. S. Transportation Secretary Anthony Foxx sent a letter to Caltrans, Metro, and other transportation agencies around the country, outlining what happens if Congress doesn’t find a temporary fix to keep the Highway Trust Fund solvent. California could survive a temporary halt in federal tax dollars, but not for long.

The problem is the federal government's main source of funding infrastructure projects: the gasoline tax. As Americans drive more fuel efficient cars, they use less gas -- meaning federal gas tax dollars have shrunk. By the end of July, the Highway Trust Fund won’t have enough money to fully fund projects around the country.

LA County freeway and transit projects are counting on $1.5 billion in federal support over the next two years. In his letter to Metro, Secretary Foxx says the DOT will continue to "take every possible step to fully reimburse your Agency for as long as we can."

The U.S. Department of Transportation uses a formula to determine what percentage of federal dollars goes to each state. Starting in August, DOT will use those same percentages to determine how much each state will receive of whatever amount is left in the Trust Fund.  Metro can expect 28% less, which works out to $20 million a month.

David Yale, Metro’s countywide planner, says there’s enough money to float the federal government for about five months because LA is a "self-help county." In other words, three times, LA County residents have voted three times for local sales tax increases to pay for transit. Yale says the county can carry the federal government, but not past the end of the year.

"It's a serious problem for us," says Yale, who says they're currently working on the 10 freeway, the 5 north and south, and wrapping up work on the 405. 

Caltrans says the 28% drop in federal dollars is the first "definitive number" Caltrans has heard from the federal government about potential cuts. Earlier this year, Caltrans reported to the California Transportation Commission that a similar reduction would likely mean that the department would have enough cash on hand to continue projects for about three months. 

Disruptions to federal reimbursements for a significant length of time would "imperil" Caltrans' current year planned construction "of $2 billion for 250 state-sponsored rehabilitation projects, about $700 million in capacity improvement projects, and billions more on local streets and roads.  It would also impact our ability to continue work on more than 670 ongoing projects, worth more than $11 billion," according to a Caltrans spokesperson.  

In the Inland Empire, San Bernardino County's Omnitrans says it would be forced to reduce or delay capital expenditures. For example the agency is scheduled to buy 15 new transit buses this year and start work on the West Valley Connector, which would link Fontana, Rancho Cucamonga, Ontario, Montclair, and Pomona. Omnitrans is ready to begin design and preliminary engineering on that project next year. As a last resort, the agency says it would cut or reduce bus service. 

The federal gas tax hasn’t been raised in two decades, but few in Congress want to touch this third rail in an election year. Lawmakers are expected to find a temporary fix before they adjourn for their August recess.  

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