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Leaders of the San Diego Association of Governments say they figured out how the agency can finish all the transportation projects it promised voters as part of a 2004 tax increase.
They just need California legislators to raise the gas tax two more times. The gas tax hike lawmakers passed this summer will also need to survive a repeal attempt.
Staffers from SANDAG last month updated their long-term plan for spending tax revenue from TransNet, the voter-approved countywide half-cent sales tax. The agency combines those tax dollars with money from state and federal sources to build major projects like freeway expansions and new trolley lines.
Investigations by Voice of San Diego and a firm the agency hired forced SANDAG to acknowledge that local sales taxes have brought in far less money than staff had thought would come. Project costs also now far exceed initial expectations. Taken together, the agency needs to bring in nearly twice as much money from outside the county to fill the gap as it projected just two years ago.
San Diego will now need to win $18.1 billion in grants from state and federal sources – up from SANDAG’s projection of just $10.4 billion in 2015 – for all the projects promised on the 2004 ballot to actually get built.
SANDAG’s update to its long-term plan sketches out what would need to happen for that to be possible.
The California Legislature’s decision to increase the state’s gas tax this year by passing SB 1, for instance, is a big help. SANDAG says it could bring about $100 million to San Diego per year.
But the region still needs state legislators to raise the gas tax two more times by 2030. If that happens, SANDAG staff says it can still finish everything promised in TransNet, despite forecasting errors that caused the agency to overstate how much money it could bring in from the sales tax.
This year’s gas tax increase, however, was controversial enough to provoke a recall attempt against a vulnerable Democrat who provided a crucial vote for it. And it is facing a statewide repeal attempt. Agency staff told the SANDAG board of directors that their expectations were still reasonable when they presented the plan. The board of directors is composed of elected officials from around the county.
Some board members weren’t convinced. Coronado Mayor Richard Bailey pressed the agency on how it came to its projections of how much it could bring in from outside sources.
To answer him, SANDAG’s staff revealed its methodology for projecting how much money it could win from the state and federal governments.
Essentially, the $18.1 billion is not what SANDAG thinks it can win from state and federal sources in the coming decades. Rather, that’s simply how much money the agency needs to finish TransNet. And since that’s how much it needs, that’s how much it now says it thinks it can bring in.
“Why do we have $18 billion identified as reasonably available now, when we only identified $10.4 billion as being reasonably available in 2015?” Bailey asked. “It seems that we kind of just made stuff up to fill in the gap.”
That’s when Jose Nuncio, the TransNet program director, described how the agency came up with its projection that the state or federal government would pass two more pieces of legislation comparable in size to the recent gas tax increase within the next 13 years.
“What we’re trying to show is, these are the dollars that are needed to complete the program,” Nuncio said.
That’s when Bailey concluded he was unwilling to support the plan as it’s currently written.
“I understand that we now think more dollars are needed, but that doesn’t mean that they’re magically going to appear,” he said. “If we’re building our budgets based on the dollars that are needed, versus the dollars we actually expect to receive, then we need to fundamentally change how we build our budgets.”
Following Bailey’s objections, the board opted against approving the plan, instead sending it back to staff for revisions. County Supervisor Dianne Jacob said she agreed with Bailey. Poway Mayor Steve Vaus, San Marcos Mayor Jim Desmond and San Diego Councilwoman Lorie Zapf all voiced related concerns as well.
The $18.1 billion SANDAG says it needs to bring in from outside sources is up from $17.5 billion just 10 months ago. Project costs jumped and local revenue expectations dropped since December, leaving the agency with its current need.
Agency staff are acknowledging that they need federal and state governments to give San Diego almost double what they thought was possible just two years ago.
The agency now needs to bring in $3.50 from the state or federal governments for every $1 it collects locally to finish all its planned projects. In 2015, SANDAG projected bringing in just $1.90 from outside sources for every $1 it collected locally.
SANDAG staff is expected to return to the board in two weeks with the long-term TransNet financing plan.
Bailey said the plan needs to undergo significant changes, not small tweaks.
“Our methodology needs to completely change,” he said. “This is a critical moment, as we hire a new executive director, to show that we can start making meaningful reform.”
Bailey’s self-described reform push isn’t the only major change facing the agency.
The state Legislature has already passed a bill – AB 805, written by local Assemblywoman Lorena Gonzalez Fletcher – that would remake the board’s voting structure, allow the county’s transit agencies to pass their own tax increases instead of just SANDAG and require the agency to sign labor-friendly construction contracts for most major projects. It’s currently awaiting the governor’s signature.
But Bailey’s internal move, if other board members join him, would revamp how the agency has run TransNet, its biggest regional responsibility, and could change the way SANDAG staff interacts with its board.
“It’s just not reasonable to expect two more gas tax hikes, which means it’s unreasonable to tell our constituents we have all these projects coming,” Bailey said.