Quote:
Originally Posted by NSMP
It’s not really correct to say that the tax rate doubles in 2039. It makes permanent the current level of transit taxation under A/C/R/M. When R would have expired, M increases. That money is accounted for in the M plan through the 2050s. There’s not going to be any excess money until then.
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In the context of responding to the idea that Measure M is just acceleration of Measure R, I think it is perfectly correct to say that the tax rate doubles in 2039 and does not sunset. Measure J could be called simply an acceleration of Measure R, but Measure M does more than just accelerate Measure M.
In terms of excess money, Measure M predicts there will be $41.86 billion dedicated to transit construction by 2057 (35% of $121.39 billion) (22 years of 0.5% sales tax and 18 years of 1% sales tax), but the list of transit projects in the expenditure plan only dedicates $15.2 billion in Measure M funding—there is an extra $28.1 billion that hasn’t been dedicated to any projects. For Measure R, they predicted there will be $13.79 billion dedicated to transit construction by 2039 (30 years of 0.5% and then Measure R expires), and they allocate all $13.79 billion in the Measure R project list (including $3.2 billion as a contingency fund for cost increases on certain projects)—there is no gap between the predicted funds and the amount dedicated.
Some of the non-dedicated Measure M money is likely for a similar contingency fund; Measure R reserved an extra 33%, or $3.2 billion in case Measure R projects went over budget, but that contingency fund has been barely touched as projects are getting better than expected federal and state funding). I think some of it is going to small projects in the subregional project list, (but I think that is less than $5 billion, I didn’t bother to count). I am not sure where the rest of the money will go, but it could be that they would rather be conservative and dedicate less money in case the economy does not grow as much and there is less sales tax revenue.
I am optimistic that charging sales taxes on internet purchases (California starts doing it in 2019), SB1, ExpressLanes, PPPs, congestion pricing and a potential federal infrastructure bill will help loosen up Measure M revenue for new projects.
Example of how extra funding from elsewhere will lead to sales tax revenue being freed up and cascading effects:
Measure R dedicates $925 million to Expo Phase 2, but Expo Phase 2 also got $212 million from the state. It did not end up needing to use up its contingency. There was $216 million leftover and they sent $200 million to the
Purple Line.
Assuming Metro gets federal full-funding grants on all Purple Line sections, Metro will have only spent $3.4 billion in Measure R funds on the Purple Line, even though Measure R dedicates $4.1 billion (plus another $1.4 billion contingency) to the Purple Line.