THE CONSEQUENCES

Failure to increase investment in transportation will further delay the state's economic recovery, reduce employment growth, and limit access to employment, education, recreation, and social services. Consider the following:

The so-called Golden State's chronic underinvestment in infrastructure is documented in the table below. California currently ranks 47th of 50 states in both per-capita and income-based spending on highways. In fact, our poor investment in highways today indicates we are essentially no better off than we were in 1998. Worse yet, of all major categories of infrastructure in California, transportation ranks lowest on average. This neglect only detracts from our competitiveness, which is particularly troubling at a time when the Governor is traveling abroad to attract foreign investment to our state.

EMPLOYMENT GROWTH AND WORLD TRADE IMPERILED

According to the California Business Roundtable, every $1 billion of investment in transportation in California creates approximately 20,000 jobs. Many of these jobs are high-paying, especially in the growing logistics industry which offers better salaries than the shrinking manufacturing industry. Diversion of $2.1 billion in Proposition 42 funds caused the state to forego approximately 42,000 jobs that would have contributed tax revenue to the State's General Fund. Given the total $5.5 billion in diverted transportation funds to date, the state has lost the opportunity to create approximately 110,000 new jobs.

Investing in transportation helps move goods more efficiently. California is the world's sixth largest economy which is largely due to our international trade activity. In fact, the value of international goods coming through our air and water ports is estimated to be $350 billion this year an increase of 17% over last year. To maintain this competitive position, we must invest in infrastructure to avoid losing jobs and increasing congestion. The following alarming statistic underscores this point: starting in 2006, 28,000 good paying trade jobs will be at risk annually as a result of gridlock caused by Los Angeles area trade activity, centered at ports and on rail corridors.

BUDGET CUTS WORSEN AIR QUALITY AND RISK HUMAN HEALTH

Transportation funding and air quality conformity go hand-in-hand, especially in large metropolitan areas including the Bay Area, Sacramento and Southern California. While air pollution has noticeably improved in the last 20 years, these regions are still classified as a non-attainment areas, meaning that levels of certain air pollutants still exceed federal standards. The Journal of the American Medical Association recently published a landmark new study linking exposure to ozone (a precursor to smog) to a significant increase in premature death in cities across the nation. The study found that increasing levels of this air pollutant could be linked to thousands of premature deaths annually.

Reducing or eliminating Proposition 42 funding jeopardizes metropolitan regions' ability to institute federally mandated Transportation Control Measures within required timeframes. As a result, traffic could slow to a halt, vehicle emissions will increase, and our major metropolitan areas may experience a conformity lapse within the next two years. The penalty for such a lapse could limit these regions' ability to implement transportation projects programmed in the currently approved Regional Transportation Improvement Program (RTIP), valued at approximately $30.5 billion in combined federal, state and local funding.



BUDGET CUTS THREATEN FUTURE FEDERAL FUNDS

Next year is a critical year for the surface transportation community because this likely is the year that Congress will finally reauthorize TEA-21. The next reauthorization bill will determine the programs, policies, and funding for the nation's transportation systems for the next six years. With the new act comes new matching requirements for state and local regions. TEA-21 legislation, which Congress is expected to adopt by mid-2005 includes higher local matching shares than previously approved federal transportation programs - up to 50 percent for some programs. Local and regional transportation entities cannot carry the full weight of matching federal transportation funds. Voters in many communities have already increased funding for local surface transportation projects to supplement state and federal funding. California must position itself to commit its full state match, carry its financial share by dedicating to transportation all existing revenue sources (both gas taxes and sales taxes on gasoline) in order to best leverage more federal funds for surface transportation projects.


APPENDIX OF PROJECTS AT RISK FOR DELAY AND ADDITIONAL COST OR ELIMINATION

Special Note: Transportation projects by their very nature tend to take longer than the one year fiscal year (FY 05-06) discussed in this document. Nonetheless, the Governor's proposed cuts to transportation put at risk major short and long-term projects included in the current State Transportation Implementation Program (STIP) and Traffic Congestion Relief Program (TCRP). Proposition 42 funds are used support these programs. Attached is a partial list of STIP projects at risk. The current STIP is scheduled to expire in FY 06-07. The TCRP is currently scheduled to expire in FY 07-08.

APPENDIX OF DEFERRED ROAD PAVEMENT AND MAINTENANCE PROGRAMS DUE TO FUNDING SHORTFALLS

Special Note: The following table contains information collected in November 2004, which provides a snapshot of the condition and existing shortfall of the county (unincorporated area only) road system. It should be noted that this spreadsheet reflects pavement rehabilitation and maintenance needs only. This does not include safety, operations, drainage, NPDES, sidewalks or non-pavement needs. This does not include any traffic enhancement or capacity needs with the exception of Los Angeles County needs, which includes their traffic congestion needs.