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TRANSACTIONS NEWSLETTER ONLINE
June/July 2000

Spotlight on Potholes

A picture of men repairing a roadThis crew from the city of Oakland is at the front line of the endless battle against potholes.

Frustrated by potholes? So are legislators, city and county officials, and others concerned about the state's crumbling infrastructure. This spring, a series of coincidentally timed events put a spotlight on the problem and suggested potential solutions.

A joint press conference sponsored by the California State Association of Counties and the League of California Cities focused on the need for increased funding, and drew together like-minded state legislators, MTC and a wide range of business organizations.

"The purpose of the press conference was to show the extensive coalition of support for dedicating transportation funding directly to cities and counties to address the $25 billion statewide funding shortfall on the city and county system," said Chris McKenzie, executive director of the League. "Cities and counties -- as owners and operators of 79 percent of the road miles in the state -- were alerting the public, the governor and lawmakers that we are losing that system and the public's investment in it."

Simultaneous with the press conference, MTC released a 15-page booklet titled The Pothole Report: An Update on Bay Area Pavement Conditions, which lays out the magnitude of the pavement problem, its causes and possible remedies. As the report documents, cities and counties in the San Francisco Bay Area are able to spend an average of only $13,000 per mile annually on pavement maintenance, far less than the nearly $20,000 per mile necessary to keep roads in good condition.

Over the next 20 years, the report predicts, the cumulative deficit for the region's local streets and roads could reach $5.6 billion, with $2.3 billion of this amount specifically shortchanging pavement upkeep and repair -- the rest affecting traffic signals, road signs, storm drains, rehabilitation of local bridges and overpasses, and the like. While the new state budget package could alter these figures somewhat (see below), the long-term outlook for local streets and roads is still grim.

This is a picture of a graph of projected funding shortfalls (yawn) The cost of deferred pavement maintenance in the Bay Area currently stands at $1.6 billion, more than double the level in 1981. The funding gap is expected to worsen considerably over the next 20 years.

"Simply put, revenues have not kept pace with demand. The gas tax, the primary revenue source for transportation, no longer supports the needs... We have stretched very thin a declining revenue source," said Steve C. Szalay, executive director of the California State Association of Counties.

The chronic underfunding of local streets and roads has been high on the agenda of the California Legislature of late, with a number of legislators introducing bills this session to boost the state's spending on local streets and roads. Gov. Gray Davis' much publicized congestion relief plan, announced this spring, also set aside money for local streets and roads.

The various bills and the governor's plan have coalesced into a state budget and trailer-bill package that provides a one-time, $400 million boost this year for local street and road repairs. In addition, the package channels a chunk of the surplus revenues from the sales tax on gasoline to cities and counties for local street and road maintenance. MTC estimates that this gasoline sales tax bonus -- which would start in fiscal 2001-02 and continue for five years -- could approach $120 million a year for the state, with as much as $24 million of that going to the Bay Area.

At the same time as expressing appreciation for the infusion of state money for local streets and roads, the League of California Cities' McKenzie noted, "We need more [money] to 'stop the bleeding' or reverse the downward trend, which is why we have emphasized the need for ongoing revenue of at least $500 million a year."

Providing fiscal relief at the city/county level is another option. There has been considerable discussion about relaxing the requirement for two-thirds voter approval of county sales tax initiatives, which could help to fill the street and road maintenance gap. Unfortunately, State Constitutional Amendment 3 (by Sen. John Burton, S.F.), which would have provided for simple-majority approval of such measures, appears all but dead in the remaining months of this legislative session.

In the Bay Area, state legislation successfully sponsored by MTC in 1997 authorizes the Commission to seek voter approval on up to a 10-cent-per-gallon tax on gasoline sold in the region's counties to fund local transportation improvements, including streets and roads. Whether the required two-thirds of the electorate would approve such a tax hike as part of a "pennies for potholes" campaign is another question.

While MTC is committed to directing over 80 percent of available transportation funds toward Bay Area maintenance projects over the next 20 years, both for roads and for public transit, MTC Executive Director Lawrence D. Dahms noted that this is not sufficient to fill the need. "Cities and counties must be assured a steady stream of revenue if they are to begin making a dent in their pothole problems," he said.
-- Réka Goode

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