Traffic in Los Angeles is notoriously bad. The L.A. County transit system provides some relief, handling more than 1.4 million passenger trips every weekday, but even so, it just isn’t big enough to address the needs of such a large and densely populated place. So, in the middle of the deepest economic downturn since the Great Depression, voters agreed to tax themselves to build the kind of transit system that this region really needed.
In November 2008, Los Angeles County residents approved a plan to expand the region’s public transportation system by the two-thirds majority required for California ballot initiatives. A half-cent increase in sales tax would raise $40 billion over thirty years to pay for a new, state-of-the-art rail and bus network and allow for improvements like new carpool lanes for the area’s overstressed highways.
That was the plan, at least.
Then the economy collapsed.
As Los Angeles started to feel the pain of the Great Recession, Mayor Antonio Villaraigosa saw in the transit plan, called Measure R, a way to help provide relief to the regional economy. To get a significant boost from the construction jobs that the massive public works project would bring, he thought Measure R needed to be implemented three times faster than scheduled. His revised plan became known as the “30/10 Initiative.”
But how could Los Angeles find the money to make 30 years’ worth of infrastructure investments in just 10 years?
The new sales tax revenue would not accrue nearly fast enough. A different approach was necessary. Dumb “innovative” financing for real estate may have led the country to recession—could smart innovative financing for public investments reinvigorate the economy in Los Angeles?
Finding the Funds
For the private capital market, the size and complexity of the Measure R projects made financing their accelerated construction a non-starter. In order to work at this scale, L.A. would need a federal loan.
The mayor’s office turned to a low-interest loan program within the Department of Transportation, known as TIFIA (named for the Transportation Infrastructure Finance and Innovation Act). The problem was, Los Angeles’s proposal—which included the whole package of projects approved under Measure R—didn’t meet TIFIA’s requirements, which had been crafted to finance individual investments, or its scale, with TIFIA supporting only about $1 billion in loans each year.
If the System is Broken, Reform It
So in 2010, Mayor Villaraigosa and a coalition of political, environmental, union, and business leaders made an aggressive push for TIFIA reforms.
The 30/10 plan was applauded as an imaginative response to Los Angeles’s transportation needs and the recession, and it gained the support of high-level Washington policymakers such as California Senator Barbara Boxer (chair of the Senate Environment and Public Works Committee).
Despite this momentum, the proposal soon stalled for a familiar reason: federal gridlock. Members of Congress opposed the measure on the grounds that any action favoring one particular community was an earmark and reflected preferential treatment.
Transportation Reform Brainstorm
Mayor Villaraigosa and Senator Barbara Boxer at a roundtable discussion with local transportation leaders.
Think Locally, Network Nationally
Stymied first by federal regulations and then by Washington attitudes, Mayor Villaraigosa turned to his peers for help. If a host of metropolitan leaders asked for the same kind of flexibility and reform that Los Angeles needed, the change would no longer be special treatment. It would simply be better policy.
Mayor Villaraigosa built and led a bipartisan national coalition of local elected officials and business and labor leaders to secure federal support for a legislative reform they called America Fast Forward, which would increase the size of the TIFIA program and allow groups of projects to be supported with a single TIFIA loan.
By increasing the size and scope of TIFIA, America Fast Forward provided a way for the federal government to reward qualifying regions that provide a locally sourced, dedicated revenue stream—such as sales tax revenue—to pay for infrastructure, with flexible, low-cost credit assistance to accelerate construction.
A City-Born Policy Victory
The cross-metro coalition succeeded. The federal transportation reauthorization bill that passed with bipartisan support in June 2012 included major changes to the TIFIA program. In October, Los Angeles received the first TIFIA loan under the new criteria: $545.9 million to support construction of the 8.5-mile Crenshaw/LAX Transit Corridor, including a light rail line, at least six new stations, and three new park-and-ride lots.
Similar loans to accelerate the rest of the Measure R transit and highway projects could have a significant impact on the region, including the creation of hundreds of thousands of jobs in Southern California and a reduction in traffic congestion throughout the metropolis.
1. Federal roadblocks aren’t insurmountable.
2. Band together with your neighbors. Whether that’s at the local or national level, you’ll always have more power and leverage when you’re working as a coalition.
This story is adapted from The Metropolitan Revolution book and iPad app by Bruce Katz and Jennifer Bradley. Story presented by the Brookings Metropolitan Policy Program. iPad app, including the graphics and videos in this story, produced by Melcher Media and designed and developed by Crush+Lovely.
Learn more about The Metropolitan Revolution at http://www.metrorevolution.org