Making Self-Help Infrastructure Finance Regional: Promises and Perils of a Multi-Jurisdictional Approach.

Abstract

In recent decades, Congress has failed to raise transportation revenues to keep pace with inflation and growth in traffic volume. Insufficient funding for transportation programs has induced many local governments to fund new road and transit infrastructure themselves, using ballot initiatives known as local option transportation taxes. While localized taxing decisions have become more politically expedient than raising federal and state motor fuel taxes, local funding comes with inherent drawbacks for developing regional transportation, which crosses into multiple taxing jurisdictions. This creates a potentially serious impediment to dealing with crucial problems like air quality, job access for the economically disadvantaged, and promotion of economic growth. In response, some regions have chosen to make local funding decisions using multi-jurisdictional, rather than local, taxes. These places have voted across an entire region, allowing them to develop comprehensive, systemic solutions to transportation problems.

This study identifies barriers to the implementation of regional self-help strategies, and approaches that have worked in overcoming them. Using interviews and archival evidence, this study examines seven cases in Atlanta, the San Francisco Bay Area, Seattle, and Denver, focusing on how state authorizing legislation shaped each process. This study develops a typology of multi-jurisdictional transportation funding mechanisms and identifies appropriate state and local policy approaches for situations that vary according to features of the authorizing legislation.

The political cost of developing a multi-jurisdictional option tax can be reduced by the existence of robust regional policy making institution, though these rarely exist in U.S. regions. The cost may also be lowered by permissive legislation. Such legislation can lift a major political obstacle to regional funding initiatives but can also make local collaboration more costly due to absence of legislation forcing rival jurisdictions to cooperate. Nevertheless, both possibilities are much less costly than the lack of any pre-approved authorizing legislation. This situation requires special legislation for each tax measure, which can result in elevated influence by state legislators in developing the transportation plan, and difficulty repeating the process.