Measure R was approved by nearly 68 percent of Los Angeles County voters in 2008 as a half-cent sales tax that would be in effect for 30 years — with an expiration date of mid-2039.
As many Source readers know, Metro staff are proposing to ask county voters to extend the Measure R half-cent sales tax past 2039 in order to accelerate the construction of transit and road projects. Here’s the staff report, which is scheduled to be considered Thursday morning in the Board of Director’s Executive Management committee. (UPDATE: The committee voted 4 to 1 to move the staff proposal without a recommendation to the full Board for their consideration at their June 29 meeting. Voting for were Board Members Diane DuBois, Richard Katz, Antonio Villaraigosa and Zev Yaroslavsky. Voting against was Mike Antonovich.)
The decision whether to go to voters with the issue is scheduled to be made this month by Metro’s 13-member Board of Directors that oversee the agency. The following Q&A is based on Metro staff reports and presentations and is intended to help explain why the staff is recommending an extension and other issues involved:
Why is Metro staff proposing to ask voters to extend Measure R past its 2039 expiration date?
Metro staff have looked at many financing options and have concluded an extension is the best way to complete Measure R transit projects in the next 10 to 13 years instead of the next 27 years. It would also greatly increase funds available for Measure R highway projects.
There are three primary reasons Metro wants to accelerate the construction of transportation projects:
•A good way to beat future inflation is to build projects now, particularly when construction costs are significantly down.
•Extending Measure R would give Metro the revenues it needs to take advantage of favorable financing. There are historically low interest rates presently and the federal government may expand a low-interest loan program that would help Metro.
•Equally important, a Measure R extension would create a lot of jobs in the near-term as Los Angeles County is still struggling with unemployment because of the Great Recession. A study on behalf of Metro by the Los Angeles Economic Development Corp. estimates that Measure R will create 410,000 jobs and that an extension of Measure R would accelerate 260,000 of those jobs.
What other reasons are there to build now?
Building transit now means that area residents would enjoy the benefits of the projects much sooner.
According to studies by Metro, accelerating Measure R projects would between 2010 and 2040 increase transit boardings by 220 million, reduce harmful emissions by 1.6 million pounds, reduce delays to congestion by 141 million hours, decrease the number of vehicle miles traveled by 594 million and reduce the consumption of foreign oil by 29 million gallons.
What projects would be funded by an extension of Measure R?
The same list of transit and road projects funded by the original Measure R.
On the transit side, the following projects would be accelerated: the second phase of the Gold Line Eastside Extension to South El Monte or Whittier, the Metro Connector to LAX, the Green Line Extension to the South Bay, the West Santa Ana Corridor transit project, the Regional Connector and possibly the Sepulveda Pass Transit Corridor project.
In addition, the third phase of the Westside Subway Extension could be completed to Westwood by 2022 to 2025 instead of by 2036.
On the highway side, Measure R helped provide funding for 16 different projects. A Measure R extension would supply $3.7 billion to those projects — that’s $3.7 billion that doesn’t otherwise exist and that money could help the projects be completed at an earlier date.
How else would Measure R extension money be used?
The same as the current Measure R. In addition to transit and road projects, funds would be allocated to Metro bus operations, Metro rail operations and Metrolink.
In addition, 15 percent of the revenues from a Measure R extension would continue to be returned to cities and Los Angeles County unincorporated areas on a per capita basis for local projects such as bike lanes and improvements, road repair and other transportation needs — all money that otherwise would not exist.
What has the original Measure R accomplished?
Many projects that had no funding whatsoever in 2008 are now under construction or about to be.
On the transit side, two projects are under construction: the second phase of the Expo Line between Culver City and Santa Monica and the Gold Line Foothill Extension between Pasadena and Azusa.
Environmental studies have been completed for three other projects — the Crenshaw/LAX Line, the Regional Connector and the Westside Subway Extension — and construction could be underway on all three by the end of 2013.
Within the next two years, five rail projects will be under construction simultaneously in Los Angeles County. That’s unprecedented in modern times.
And the Orange Line Extension to Chatsworth is opening June 30. This was the first Measure R project and was finished ahead of schedule and under budget. The Measure R funds that were to be used for the project will be used instead for another Measure R transit project in the San Fernando Valley.
On the highway side, Measure R has helped fund ramp improvements along the 405, 110, 105 and 91 freeways. Also under construction: An HOV lane on the 5 freeway between the 134 and 170; the carpool lane connector between the 5 and 14 freeway, and; the widening of the 5 freeway at the Carmenita Road interchange.
How long is Metro proposing that Measure R be extended for?
Under the current Measure R, Metro cannot collect the half-cent sales tax after June 30, 2039.
Metro staff are asking the agency’s Board of Directors to consider three options: a 30-year extension of Measure R, extend the sale tax until voters decide to end it or leaving things as they are with Measure R expiring in 2039.
Why is Metro proposing to ask voters to extend Measure R when in 2008 Metro only wanted it to be a 30-year tax?
Persuading voters to approve the original Measure R approved by voters was a big and difficult step. In the early stages of a national recession, Metro asked Los Angeles County voters to approve a half-cent sales tax increase — and nearly 68 percent of voters backed it.
In 2008, a 30-year limit on Measure was a good way to show voters that Metro was serious about staying within budget limits for projects and to demonstrate that Measure R was a program specifically targeted at expanding transit and fixing long-standing highway bottlenecks.
What has changed? First, the longevity of the Great Recession and the unemployment it has wreaked on Los Angeles County and the region was not yet known.
Second, the America Fast Forward program first proposed by Los Angeles Mayor Antonio Villaraigosa and later backed by the Metro Board could expand a federal loan program to help fund transportation projects. If it happens, Metro wants to be in position to take advantage of low-cost funding.
How exactly do
es America Fast Forward fit into a Measure R extension?
As part of the next multi-year federal transportation spending bill, Congress is now contemplating expanding a federal loan program called TIFIA – a key part of the America Fast Forward plan.
If TIFIA is expanded, Metro’s ability to secure loans from the program would greatly improve the agency’s ability to accelerate projects. Why? The loans provide up-front money that Metro needs to build rather than wait for Measure R funds to trickle into county coffers over time.
Metro is currently required to repay all loans by the time that Measure R expires in 2039. An extension of Measure R would allow Metro to extend the repayment of any loans from TIFIA past 2039 and that, in turn, would allow Metro to accelerate more projects.
What happens if Congress doesn’t expand the TIFIA program or adopt America Fast Forward?
Metro has a fallback plan that would allow it to accelerate all of the transit projects with the exception of the Sepulveda Pass Transit Corridor. On the highway side, not having TIFIA would deprive projects of about $1.7 billion in funding.
Will Metro have the funds to operate all these projects once they’re completed?
Metro has always had the money to open newly built projects and the agency is required by law to balance its budget each year. The Federal Transit Administration reviews Metro’s financial plans on a regular basis and the FTA’s latest rating indicates that Metro can pursue future building plans.
If Measure R didn’t exist and the new transit projects were never built, Metro would be facing a $99-million operating deficit today that would escalate rapidly in future years if no new revenue was generated or expenses pared.
Metro has several sources of revenue in future years that can be used for operating new transit systems: lease revenue from new development at Union Station, new ad revenue from rail expansion and more than $400 million in federal Congestion Management and Air Quality funds between now and 2040 to help pay for the first three years of operating all new bus rapid transit and rail lines.
Will bus service be slashed and fares raised to cover operating costs for the new rail projects?
Buses carry the majority of daily riders on Metro and that’s not going to change. Metro bus service hours will grow by about 10 percent between now and 2039 — and it’s likely that other bus systems in the county will also grow in that time along with service by Metrolink and Amtrak.
It is important to understand that with or without a Measure R extension, there is always the possibility of service changes in the future to adapt to changing ridership patterns and put service where it is needed the most. Metro will continue to integrate its bus and rail system to best serve its riders — it’s not a competition between buses and trains.
At this time, Metro’s fares remain among the least expensive of major transit agencies in the United States. In the future, it is likely that Metro will look at other fare models, including distance-based fares on the rail system.
One reason: the Regional Connector project in downtown Los Angeles will make it possible to take a single train for as many as 40 miles — for example, from Long Beach to Azusa.
Is Metro mortgaging the future of Los Angeles County taxpayers by borrowing money to accelerate transit projects?
A Measure R extension doesn’t require Metro to borrow any money through loans or by selling bonds. The whole point of extending Measure R is to ensure that the agency has the option to borrow money and to ensure that the agency has future revenues to repay any debts.
Will a Measure R extension fund other transit projects not on the original Measure R list?
The Measure R extension would first complete funding for the original Measure R transit projects. After those are done, funds would go to unfunded phases of Measure R projects and then to projects without funding in the agency’s long-range plan.
New Measure R funds would not be available until after 2050, according to Metro staff. However, other funding sources could be available earlier.
What is needed for a Measure R Extension to be approved?
First, the state Legislature must approve a bill, AB 1446 (by Assm. Mike Feuer, D-Los Angeles), that would allow Metro to ask voters to consider an extension. Gov. Jerry Brown then must sign it. The bill has already been approved by the Assembly and is being debated in the State Senate.
Concurrently, a majority of the 13-member Metro Board of Directors must approve sending a Measure R extension to voters for their approval. That must happen by July. In addition, a majority of the five-member Los Angeles County Board of Supervisors would have to approve putting a Measure R extension on the ballot.