ADOPTED APRIL 2012

Southern California Association of Governments

TRANSPORTATION FINANCE

APPENDIX
TRANSPORTATION FINANCE

Introduction 1

Revenue Assumptions 1

Economic Conditions 2

Inflation 2

Retail Sales Growth 3

Fuel Consumption 3

Status of the Federal Highway Trust Fund 3

Status of the State Highway Account 4

Core and Reasonably Available Revenues 5

Core Revenues 5

Reasonably Available Revenues 8

Assumptions by Revenue Source 8

Revenue Source Availability and Risk Assessment 16

Historical Trends 18

Comparison to Historical Trends 18

Expenditure Categories and Methodology 19

Capital Project Cost Escalation 19

Multimodal System Preservation and Maintenance 21

Debt Service 21

Summary of Revenue Sources and Expenditures 21

APPENDIX A: Transportation Funding in the SCAG Region 25

APPENDIX B: Details about Revenue Sources 26

Local Revenue Sources 26

State Revenue Sources 28

Federal Revenue Sources 31

New Revenue Sources/Innovative Financing 33

APPENDIX C: Financial Plan Assessment Checklist 39

APPENDIX D: SCAG Regional Financial Model 40

Local Sources 43

State Sources 43

Federal Sources 44

APPENDIX E: Implementation Plan for 

Reasonably Available Revenue Sources 48

Value Capture Strategies 48

Highway Tolls 49

Private Equity Participation 50

Bond Proceeds from Local Sales Tax Measures 50

State Bond Proceeds, Federal Grants & Other for California High Speed Rail Program 50

E-Commerce Tax 51

National Freight Fees/Freight Program 51

State and Federal Gasoline Excise Tax Adjustment 51

Mileage-Based User Fee 53
Introduction

This appendix highlights the financial planning component of the 2012–2035 RTP/SCS 

for the six-county SCAG region. The financial plan identifies how much money is available 

to support the region’s surface transportation investments, including transit, highways, 

local road improvements, system preservation, and demand management goals. It also 

addresses the need for investment in goods movement infrastructure. Improving ground 

access in and around major goods movement facilities and enhancing major highways 

and railways are critical to maintaining the health of Southern California’s economy. The 

RTP/SCS calls for traditional and non-traditional revenue sources for implementing a 

program of infrastructure improvements to keep freight and people moving.

The RTP/SCS financial plan includes a number of reasonably available revenue sources to 

supplement existing transportation dollars. The SCAG region’s financially constrained plan 

includes a core revenue forecast of existing local, state, and federal sources along with 

funding sources that are reasonably available over the time horizon of the RTP/SCS. The 

plan also includes action steps to obtain the revenues necessary for implementing the 

region’s transportation vision.

SCAG acknowledges the considerable challenges associated with financing transportation 

investments. The plan highlights the importance of finding new and innovative ways to 

pay for transportation, including our ever-expanding backlog of investment needs just to 

maintain the existing system. Nationally, we are facing a very real, near-term insolvency 

crisis with the Federal Highway Trust Fund as fuel tax receipts continue to take a precipitous decline. Additionally, the viability of California’s State Highway Account remains in 

question, as only a fraction of our needs are funded through state sources.

To backfill limited state and federal sources, our region continues to rely upon local initiatives (74 percent of core revenues) to meet transportation needs. With a total of 7 sales 

tax measures throughout the region, including the passage of Measure R in Los Angeles 

County since the adoption of the 2008 RTP, we are increasingly becoming self-reliant. 

However, the national purpose served by Southern California’s transportation system—

particularly in the movement of goods—points to the need for stronger state and federal 

commitment. Our transportation system is the responsibility of all levels of government.

In the SCAG region, our decision-makers continue to take a leadership role in advancing innovative transportation solutions. The 2012–2035 RTP/SCS establishes a framework toward a more sustainable funding future with emphasis on continued research 

and development for transitioning our fuel tax-based system to a more direct, user fee 

approach. Such a change requires additional investigation and legislative action by state 

and federal leaders over the time horizon of the 2012–2035 RTP/SCS. Our region has 

undertaken numerous policy and technical studies in recent years and will continue to 

make a commitment toward further examining and demonstrating user fee systems, 

including toll networks and mileage-based user fees.

We have successfully implemented toll systems in the past with the Transportation 

Corridor Agencies’ network of toll roads and the SR-91 Express Lanes in Orange County. 

This kind of innovation in transportation continues and offers further opportunities 

to leverage, including public-private partnerships, as neighboring counties within our 

region consider a broader network of toll systems. Moreover, federal programs have 

recently supported demonstration initiatives in the region (e.g., I-110 and I-10 Congestion 

Reduction Demonstration Program in Los Angeles County). We have secured the necessary resources identified to support transportation investments proposed in past RTPs. 

This plan will continue to meet the necessary milestones for implementation.

The rest of this appendix outlines our financial strategies and provides documentation of the financial assumptions and methodologies used for forecasting revenues 

and expenditures.

Revenue Assumptions

A regional revenue model was developed to forecast the revenues over the RTP/SCS time 

horizon. The revenue model supports analysis by county or funding source. The region’s 

revenue forecast timeframe for the RTP/SCS is FY2011 through FY2035. Consistent with 

federal guidelines, the financial plan takes into account inflation and reports statistics in 

nominal (year of expenditure) dollars. 

The underlying data are based on financial planning documents developed by the local 

county transportation commissions and transit operators. The revenue model also uses 

information from the California Department of Transportation (Caltrans) and the California 

Transportation Commission (CTC). A complicating factor in the SCAG region is that 

individual county transportation commissions develop revenue forecasts consistent with 

their obligations under county sales tax measures. The regional forecasts incorporate 

the county forecasts and fill data using a common framework. This ensures consistency 

between the SCAG forecast and the planning documents of the county transportation 

commissions. When there are gaps in the financial projections in the outer years between 

Transportation Finance 1
the county forecasts and the RTP/SCS time horizon, growth assumptions are extrapolated 

from historical trends based on published data. For the 2012–2035 RTP/SCS, Monte 

Carlo simulation was also conducted to ensure the assumptions are reasonable and to 

understand the risks of different assumptions.

The basic process for developing the revenue forecast is to:

 Build on the revenue forecasts provided by the county transportation commissions.

 Add data where needed using assumptions based on historical data.

 Compare historical data to short-range transit plans and other agency documents.

 Conduct Monte Carlo sensitivity testing of assumptions.

 Work with the transportation commissions to modify assumptions and forecasts 

as needed.

The next few sections describe specific economic assumptions and challenges in developing the regional revenue forecasts.

Economic Conditions

Overall economic conditions play a large role in determining the level of revenues 

available for transportation through 2035. SCAG’s financial model takes a conservative approach when forecasting the latter years of the RTP/SCS planning horizon. The 

approach also reflects historical growth trends and reasonable future expectations for 

key revenue sources, including locally generated sales tax revenues as well as state and 

federal gas excise tax revenues. The inability of existing excise taxes to keep pace with 

increasing transportation needs and the detrimental effects of increasing fuel economy 

on traditional revenue sources are key considerations in the financial plan.

Inflation

SCAG’s revenue model takes into account historical inflation trends measured by the 

Gross Domestic Product (GDP) Price Deflator—an approach consistent with the one used 

by the Federal Office of Management and Budget in preparing the Budget of the United 

States Government. Inflation can have a profound effect over the long term, particularly 

during the final years of the plan, when inflation has had nearly 25 years to erode the 

value of money. 

FIGURE 1 shows the trends in inflation since World War II as measured by the GDP Price 

Deflator. Inflation rates have varied considerably over the time period. However, inflation has dropped dramatically since the late 1970s, when the Federal Reserve needed to 

adopt measures to “tame” inflation. The recession has put additional downward pressure 

on the inflation rate and caused some economists to worry about the potential eroding 

effects of deflation, but inflation has remained positive. Over the long term, inflation has 

trended between 2 and 4 percent. On the basis of this information, a 2.9 percent inflation 

rate is used to adjust constant dollar (revenue) forecasts into nominal (or year-of-expenditure) dollars.

FIGURE 1 Historical Inflation Trends

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

19401945195019551960196519701975198019851990199520002005

Annual Inflation

Fiscal Year

Year-Over-Year Inflation Annualized Inflation to 2010

Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2011 

Budget (FY11)

2 Transportation Finance
Retail Sales Growth

Changes in personal consumption, population, available land, and retail locations are the 

biggest contributors to the growth in retail sales. The recession has dealt a blow to retail 

sales, which reached their peak in FY2007. Retail sales have begun to improve and are 

expected to rise over the RTP/SCS planning period. Over the 30-year period from FY1979 

to FY2009, retail sales grew 1.4 percent in real terms (when the effects of inflation are 

eliminated). However, the growth was uneven. The financial plan assumes uneven growth 

will continue to occur, with retail sales growth ranging from 1.2 percent to 3.9 percent in 

real terms.

Fuel Consumption

Excise taxes on gasoline and diesel fuels are the basis of most available federal and 

state transportation funding sources. Since these taxes are levied on a cents-per-gallon 

basis, they are dependent solely on fuel consumption and are not indexed to inflation or 

construction costs. Over the last several decades, total fuel consumption and the excise 

taxes generated grew due to increases in vehicle miles traveled (VMT). While changes 

in VMT will continue to play a role during the RTP/SCS planning period, increases in 

conventional fuel economy and the adoption of alternative fuel vehicles will reduce overall 

fuel consumption. The financial plan assumes that increases in vehicle fuel efficiency will 

reduce fuel consumption by 1 percent per year during the planning period.

Status of the Federal Highway Trust Fund

The Federal Highway Trust Fund (HTF) provides federal highway and transit funding from 

a nationally imposed 18.3-cent-per-gallon gasoline excise tax. The health of the HTF is of 

significant concern. Expenditures authorized under the 2005 Safe, Accountable, Flexible, 

Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) have outstripped 

revenues generated by the excise tax. Since 2008, the HTF has failed to meet its obligations and has required the Congress to authorize $34.5 billion in transfers from the 

General Fund to keep it solvent.

FIGURE 2 shows a chart from a recent Congressional Budget Office (CBO) analysis of the 

HTF. The negative balances shown on the chart illustrate the projected inability of the HTF 

to pay its obligations into the highway account as incurred by the states. Since the Trust 

Fund cannot incur negative balances under current law, the difference would need to be 

made up by General Fund transfers or slower spending on programs financed by the HTF.

FIGURE 2 Status of the Federal Highway Trust Fund

(125)

(100)

(75)

(50)

(25)

0

25

50

75

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019

$ Billions

Year

Revenues, Interest, and General Fund Transfers Outlays End of Year Balance or Shortfall

Actual Projected

Source: Congressional Budget Office

At the time of the RTP/SCS, Congress is on its ninth extension to SAFETEA-LU without 

substantive agreement on a long-term solution to provide adequate funding for the HTF 

despite two national commissions established under SAFETEA-LU that called for immediate action to increase fuel taxes and index as appropriate in parallel with transitioning to 

a mileage-based user fee over the longer term. The financial plan assumes that Congress 

will reach agreement on maintaining solvency of the HTF over the RTP/SCS planning 

period. However, the core revenues available from the HTF are expected to decline due to 

increasing fuel efficiency.

Transportation Finance 3
Status of the State Highway Account

The viability of the State Highway Account (SHA) remains another critical issue. Despite 

a recent “Gas Tax Swap,” the effective state excise rates have remained unadjusted for 

more than 15 years. The excise tax revenues, however, remain the only source of funding 

for the State Highway Operation and Protection Program (SHOPP), which finances projects to maintain the State Highway System.

Despite the entire SHA being dedicated to the SHOPP in some years, previous levels of 

funding have been considerably less than actual needs (see FIGURE 3). Continued underinvestment in the rehabilitation and maintenance needs of the State Highway System has 

serious ramifications—rapidly increasing the number of distressed lane-miles on the 

State Highway System and eroding the condition of the State’s bridges. As a result, the 

cost of bringing the highway assets back to a state of good repair is expected to grow 

exponentially.

The 2011 Ten-Year SHOPP Plan identifies $7.4 billion in statewide annual needs, while 

expenditures programmed for the next four years are only $1.8 billion annually. Increased 

fuel efficiency will further erode State Highway Account funding available over the RTP/

SCS planning period.

State Gas Tax Swap

In 2010, state gasoline sales tax revenues were “swapped” for an increased state excise 

tax. Effective July 1, 2010, the gasoline excise tax increased by 17.3 cents. On July 1, 

2011, sales taxes on diesel fuel increased by 1.75 percent and the excise tax decreased 

by a corresponding amount. To partially backfill the State Transit Assistance funding to 

local transit operators, their share increased from two-thirds to 75 percent. Each year, 

the California State Board of Equalization is required to adjust the excise tax, so the state 

Gas Tax Swap remains revenue neutral. As a result, the financial plan assumes that the 

state Gas Tax Swap generates the same revenues as generated under the prior state 

sales tax on gasoline.

FIGURE 3 Status of the State Highway Operation and Protection Program

Source: California Department of Transportation, 2011 Ten-Year SHOPP Plan

Air Quality Attainment

Air quality determines the amount of Congestion Mitigation and Air Quality (CMAQ) 

funding available to the SCAG region. SCAG expects that the region will be in attainment for a number of pollutants and the severity level for other pollutants will lessen 

as a result of air quality initiatives. The financial plan assumes that CMAQ funding will 

decline by 25 percent in 2020 and another 25 percent in 2025 as a result of these air 

quality improvements.

4 Transportation Finance
Local Sales Tax Measures

As a means of backfilling declining federal and state sources, the SCAG region continues 

to rely heavily on local sales tax measures for the timely delivery of transportation projects. Most counties in the region voted to support local sales taxes to fund transportation 

projects. Ventura County is the only county in the region without a dedicated sales tax for 

transportation. While most counties impose a 0.5 percent sales tax to fund transportation projects, Los Angeles County levies a permanent 1 percent tax (a combination of two 

half-cent sales taxes).

Since the 2008 RTP, voters in Los Angeles County have passed Measure R, which 

imposes an additional 0.5 percent sales tax to fund transportation projects. Unlike the 

other Los Angeles County sales taxes, Measure R is not permanent and expires in 2039.

Additionally, several local sales taxes have been renewed in recent years. Prior to the 

2008 RTP, Orange, Riverside, and San Bernardino Counties extended their sales tax 

measure through 2039 or beyond. Since the 2008 RTP, Imperial County has renewed its 

Measure D through 2050. As a result of these extensions, revenues from the local sales 

tax measures will be available for the entire RTP/SCS planning period.

Core and Reasonably Available Revenues

For the 2012–2035 RTP/SCS, SCAG prepared two types of revenue forecasts. Both are 

included in the financially constrained plan:

 Core revenues 

 Reasonably available revenues

The core revenues identified are those that have been committed or historically available 

for the building, operation, and maintenance of the current roadway and transit systems in the SCAG region. Essentially, these revenues are existing transportation funding 

sources projected to FY2035. The core forecast does not include future increases in state 

or federal gas excise tax rates (other than the pro forma increases in the state excise tax 

due to the state gasoline sales tax swap) or adoptions of regional gasoline taxes, vehicle 

miles traveled (VMT) taxes, and new tax measures. These revenues provide a benchmark 

from which additional funding can be identified.

The region’s reasonably available revenues include new sources of transportation funding 

likely to materialize within the 2012–2035 RTP/SCS timeframe. These sources include 

adjustments to existing state and federal gas tax rates based on historical trends and 

recommendations from two national commissions (National Surface Transportation Policy 

and Revenue Study Commission and National Surface Transportation Infrastructure 

Financing Commission) created by Congress; further leveraging of existing local sales tax 

measures; value capture strategies; potential national freight program/freight fees; as 

well as passenger and commercial vehicle tolls for specific facilities. Reasonably available 

revenues also include innovative financing strategies, such as private equity participation. 

In accordance with federal guidelines, the plan includes strategies for ensuring the availability of these sources.

Core Revenues

TABLE 1 shows the core revenues in five-year increments by county.

TABLE 1 Core Revenue Forecast FY2011–FY2035

(in Nominal Dollars, Billions)

County

FY2011–

FY2015

FY2016–

FY2020

FY2021–

FY2025

FY2026–

FY2030

FY2031–

FY2035

Total

Imperial $0.3 $0.3 $0.4 $0.4 $0.5 $1.9

Los Angeles $29.4 $32.7 $38.5 $46.2 $53.4 $200.2

Orange $7.3 $8.1 $9.5 $11.3 $13.4 $49.6

Riverside $4.2 $4.6 $5.1 $5.9 $6.8 $26.6

San Bernardino $3.4 $4.0 $4.4 $5.0 $5.6 $22.4

Ventura $0.8 $0.8 $0.9 $1.0 $1.2 $4.6

Total $45.3 $50.3 $58.7 $69.7 $80.9 $305.3

Source: SCAG Revenue Model 2011

Note: Numbers may not sum to total due to rounding

Transportation Finance 5
As shown in FIGURE 4, the majority of revenues in the SCAG region come from local 

sources. The share of state sources (15 percent) has declined since the 2008 RTP (20 

percent) as a result of the forecasted decline in fuel consumption and the increased share 

of local funds resulting from adoption of an additional sales tax in Los Angeles County.

FIGURE 5 shows the breakdown of revenues by county. With the adoption of Measure R, 

Los Angeles accounts for nearly two-thirds (65 percent) of the funding available in the 

SCAG region. This is an increase from the 56 percent share in the 2008 RTP.

Local option sales taxes provide the largest single source of local funding, as shown in 

FIGURE 6. When local sales taxes in all five counties with such measures are included, 

these taxes account for more than half (53 percent) of local sources and nearly two-fifths 

(39 percent) of overall funding for the RTP/SCS. Local sales tax revenues have been 

boosted by the adoption of Measure R, which provides a further 0.5 percent sales tax in 

Los Angeles County through 2039. In addition, Imperial County extended its tax measure 

through 2050.

FIGURE 4 Core Revenues 

(in Nominal Dollars) $305.3 Billion Total

Local

$225.5 (74%)

State

$46.8 (15%)

Federal

$33.0 (11%)

Source: SCAG Revenue Model 2011

Note: Numbers may not sum to total due to rounding 

FIGURE 5 Core Revenues by County 

(in Nominal Dollars) $305.3 Billion Total

Imperial

$1.9 (1%)

Los Angeles

$200.2 (66%)

Orange

$49.6 (16%)

Riverside

$26.6 (9%)

San Bernardino

$22.4 (7%)

Ventura

$4.6 (1%)

Source: SCAG Revenue Model 2011

Note: Numbers may not sum to total due to rounding

FIGURE 6 Core Revenues, Local Sources 

(in Nominal Dollars) $225.5 Billion Total

Local Sales Tax

$119.4 (53%)

TDA

$28.7 (13%)

Gas Tax Subvention

$4.6 (2%) Farebox Revenue

$26.7 (12%)

Highway Tolls

$11.2 (5%)

Mitigation Fees

$9.5 (4%)

Other Local

$25.5 (11%)

Source: SCAG Revenue Model 2011

Note: Numbers may not sum to total due to rounding

6 Transportation Finance
State sources generate a smaller share of revenues than in the 2008 RTP, due mostly to 

the assumption that fuel consumption declines in the future as a result of increased fuel 

efficiency. As shown in FIGURE 7, the State Transportation Improvement Program (STIP), 

the State Highway Operations and Protection Program (SHOPP), and the State Gasoline 

Sales Tax Swap account for the largest portions of the state funding available. The 

adjustments to the State Transit Assistance (STA) available under the Gas Tax Swap are 

included in the State Gasoline Sales Tax Swap category.

FIGURE 7 Core Revenues, State Sources 

(in Nominal Dollars) $46.8 Billion Total

STIP

$9.4 (20%)

SHOPP

$19.5 (41%)

State Gasoline Sales Tax 

Swap

$11.0 (24%)

State Transit Assistance

$2.8 (6%)

Proposition 1B (Infrastructure 

Bonds)

$3.4 (7%)

Other State

$0.8 (2%)

Source: SCAG Revenue Model 2011

Note: Numbers may not sum to total due to rounding

As shown in FIGURE 8, federal sources are anticipated to represent a small portion of 

overall transportation funds ($33.0 billion). The Federal Highway Trust Fund is expected to 

remain solvent, but as with state funding, federal funding will decline due to increases in 

fuel efficiency. Federal Transit Administration (FTA) funding represents a larger share of 

federal funding due to large-scale New Starts in the SCAG region and a recent emphasis 

on transit allocations. The financial plan also assumes that CMAQ funding will decline 

in 2020 and 2025 due to the region achieving attainment for a number of pollutants and 

reducing the severity level of other pollutants.

FIGURE 8 Core Revenues, Federal Sources 

(in Nominal Dollars) $33.0 Billion Total

CMAQ

$5.0 (15%)

RSTP

$6.7 (21%)

FTA Formula

$14.2 (43%)

FTA Discretionary

$5.3 (16%)

Other Federal

$1.8 (5%)

Source: SCAG Revenue Model 2011

Note: Numbers may not sum to total due to rounding

Transportation Finance 7
Reasonably Available Revenues

There are several new funding sources that are reasonably expected to be available for 

the 2012–2035 RTP/SCS. SCAG considered a set of key guiding principles as a foundation 

for identifying regionally appropriate revenues that are reasonably available in developing 

the RTP/SCS financial strategies as follows:

 Establish a user-based system that better reflects the true cost of transportation, 

provides firewall protection for transportation funds, and ensures an equitable distribution of costs and benefits.

 Promote national and state programs that include return-to-source guarantees while 

maintaining flexibility to reward regions that continue to commit substantial local 

resources.

 Leverage locally available funding with innovative financing tools (e.g., tax credits 

and expansion of Transportation Infrastructure Finance and Innovation Act [TIFIA]) to 

attract private capital and accelerate project delivery.

 Promote funding strategies that strengthen federal commitment to the nation’s 

goods movement system, recognizing the pivotal role that our region plays in 

domestic and international trade.

Based on these guiding principles, SCAG evaluated a number of revenue options. Various 

combinations of these options were considered as potential revenue packages. TABLE 2

presents 10 categories of funding sources and financing techniques that were evaluated 

for the RTP/SCS. These were selected on the basis of their use in other areas of the state, 

the burgeoning potential, historical precedence, and their likelihood of implementation 

within the timeframe of the 2012–2035 RTP/SCS.

These funding sources are considered to be reasonably available and are included in the 

financially constrained plan. For each funding source, SCAG has examined the policy 

and legal context of implementation and has prepared an estimate of the potential 

revenues generated.

Assumptions by Revenue Source

TABLE 3 describes the specific revenue assumptions used for the financially constrained 

2012–2035 RTP/SCS. A more detailed discussion of revenue sources is included in 

Appendix B. 

The California Transportation Commission (CTC) releases the Fund Estimate every two 

years. The estimate covers a five-year period and estimates how much money each 

region can expect to receive from various sources. This estimate is guided by statutory 

requirements that direct how the funds are divided throughout the state. The federal 

funding categories of Interstate Maintenance (IM) and National Highway System (NHS) 

are included within the CTC’s State Transportation Improvement Program (STIP) allocation. The federal funds cannot be separated from the CTC’s overall fund estimate and 

the resulting regional allocation from the STIP. For this reason, the federal categories 

of Interstate Maintenance (IM) and National Highway System (NHS) are not shown on 

the revenue data table under federal sources nor are they specifically documented and 

described here.

8 Transportation Finance
Transportation Finance 9

TABLE 2 New Revenue Sources and Innovative Financing Strategies (in Nominal Dollars, Billions)

Revenue Source Description Amount Actions to Ensure Availability Responsible Party(ies)

Bond Proceeds from 

Local Sales Tax 

Measures 

Issuance of debt against existing sales tax revenues: Los Angeles, Orange, Riverside, and San 

Bernardino Counties. (Note: although revenue 

estimates do not include new sales tax measures, this plan recognizes future opportunities 

including the potential for a sales tax measure 

in Ventura County if approved by the voters.) 

$25.6 Issuance of debt subject to county transportation commissions’ respective 

board policies.

County Transportation 

Commissions—CTCs 

(LACMTA, OCTA, RCTC, 

SANBAG)

State and Federal 

Gas Excise Tax Adjustment to Maintain 

Historical Purchasing 

Power

Additional $0.15 per gallon gasoline tax imposed 

at the state and the federal levels starting in 

2017 to 2024—to maintain purchasing power.

$16.9

Requires action of State Legislature and Congress. Strategy is consistent 

with recommendations from two national commissions to move immediately with augmenting fuel tax resources through conventional Highway 

Trust Fund mechanisms.

State Legislature, Congress

Mileage-Based User 

Fee (or equivalent 

fuel tax adjustment)

Mileage-based user fees would be implemented 

to replace gas taxes—estimated at about $0.05 

(in 2011 dollars) per mile starting in 2025 and 

indexed to maintain purchasing power. 

$110.3 

(est. increment only) 

Requires action of State Legislature and Congress. Strategy is consistent 

with recommendations from two national commissions to move toward a 

mileage-based user fee system. Immediate steps necessary to take include 

coalescing state and national partners to fund further RD&D (research, 

development, and demonstration) in advance of 2025 broad-based implementation.

State Legislature, Congress 

Highway Tolls 

(includes toll revenue 

bond proceeds) 

Toll revenues generated from SR-710 North 

Extension, I-710 South Freight Corridor, EastWest Freight Corridor, segment of the High 

Desert Corridor, and Regional Express/HOT Lane 

Network.

$22.3

Assembly Bill (AB) 1467 (Nunez) Chapter 32, Statutes of 2006 authorized 

Caltrans and regional transportation agencies to enter into comprehensive development lease agreements with public and private entities or 

consortia of those entities for certain types of transportation projects. 

Further, AB 521 (Runner) Chapter 542, Statutes of 2006 modified provisions in AB 1467. Senate Bill Second Extraordinary Session 4 (SBX2 4) 

Chapter 2, Statutes of 2009 (Cogdill) established the legislative authority 

until January 1, 2017, allowing for regional transportation agencies and 

Caltrans to enter into an unlimited number of public-private partnerships 

(P3) and deleted the restrictions on the number and type of projects that 

may be undertaken. Chapter 474, Statutes of 2009 (AB 798) established 

the California Transportation Financing Authority (CTFA). Highway projects 

that meet planning and environmental review requirements are eligible for 

tolling subject to meeting requirements of the CTFA. AB 798 also lifts the 

requirement for High Occupancy Toll (HOT) lane projects authorized under 

AB 1467 to have separate legislative approval.

MPO, CTCs, Caltrans, 

CTFA, and FHWA as may be 

applicable
10 Transportation Finance

Revenue Source Description Amount Actions to Ensure Availability Responsible Party(ies)

Private Equity 

Participation

Private equity share as may be applicable for 

key initiatives: e.g., toll facilities; also, freight 

rail package assumes railroads’ share of costs 

for main line capacity and intermodal facilities 

such as SCIG and ICTF modernization.

$2.7 Region has authority as noted above. Further, current funding plans for 

specific intermodal facilities assume private sources.

MPO, CTCs, private consortium, State Legislature, 

and Union Pacific/BNSF 

as appropriate for specific 

facilities

Freight Fee/National 

Freight Program

A national freight program is anticipated with 

the next federal reauthorization of the surface 

transportation act. The National Freight Program 

described in Senate-proposed transportation 

reauthorization bill (MAP-21) would establish 

federal formula funding for infrastructure improvements supporting the national freight network. Early estimates indicate roughly $2 billion 

per year nationally. Regional estimate assumes 

a conservative percentage of national totals. 

$4.2

Current efforts at the local/regional level continue to endorse a federal 

program for freight. A national program may be formula-based as outlined 

in the recently proposed MAP-21. Other mechanisms to ensure the establishment of a funding program for freight may entail working with local/

regional, state, and federal stakeholders to assess a national freight fee. 

Freight fees could be assessed in proportion to relative impacts on the 

transportation system.

Congress and potentially 

State Legislature as well as 

local/regional stakeholders

E-Commerce Tax

E-commerce sales refers to the sale of goods 

and services where an order is placed or price 

and terms of the sale are negotiated over the 

Internet or other online system. Potentially, the 

revenue could be used for transportation purposes, given the relationship between e-commerce and the delivery of goods to California 

purchasers.

$3.1

The State estimates that most residents do not report use tax and this 

resulted in $1.1 billion in forgone use tax revenue during 2010. The State 

cannot compel out-of-state retailers to pay a sales or use tax, as federal 

law requires that retailers have a physical presence in the State. In its 

FY2012 budget, the State attempted to compel out-of-state retailers that 

are part of a commonly controlled group or that work with affiliates to pay 

a use tax (through ABX1 28). In September 2011, the State repealed ABX1 

28 and enacted AB 155, which includes many of the same provisions as 

ABX1 28, but delays implementation until September 2012.

State Legislature and 

potentially Congress

Interest Earnings Interest earnings from toll bond proceeds. $0.2 See Highway Tolls. See Highway Tolls

State Bond Proceeds, Federal 

Grants & Other for 

California HighSpeed Rail Program

State general obligation bonds authorized under 

the Bond Act approved by California voters as 

Proposition 1A in 2008; federal grants authorized under American Recovery and Reinvestment Act and High-Speed Intercity Passenger 

Rail Program; potential use of qualified tax 

credit bonds; and private sources.

$33.0

Estimate for Southern California segments based on statewide system total 

per November 1, 2011, Draft California High-Speed Rail Business Plan. Further coordination anticipated with the California High-Speed Rail Authority 

in finalizing business plan; additionally, the High-Speed Rail Authority will 

pursue private-sector participation as a source of system financing.

MPO, California High-Speed 

Rail Authority, local/regional stakeholders, privatesector partners

Value Capture

Strategies

Assumes formation of special districts (infrastructure financing districts) including use of tax 

increment financing for specific initiatives: e.g., 

East-West Freight Corridor.

$1.2

Pursue necessary approvals for special districts by 2016. Benefit assessment districts require majority approval by property owners; community 

facility districts require two-thirds approval; work with private entities for 

joint development opportunities as may be applicable.

MPO, CTCs, local jurisdictions, property owners 

along project corridors, 

developers
Transportation Finance 11

TABLE 3.1 Core and Reasonably Available Revenue Projections—Local Revenue Sources (in Nominal Dollars, Billions)

Revenue Source Revenue Projection Assumptions Revenue Estimate

LOCAL REVENUE SOURCES

Local Option Sales Tax Measures

Description: Locally imposed 1⁄2 percent sales tax in four counties (Imperial, Orange, Riverside, and San Bernardino). Permanent 1 percent 

(combination of two 1⁄2 cent sales taxes) plus Measure R through 2039 in Los Angeles County.

Assumptions: Sales taxes grow consistent with county transportation commission forecasts and historical trends. 

$119.4

Transportation Development Act 

(TDA)—Local Transportation Fund

Description: The Local Transportation Fund (LTF) is derived from a 1⁄4 cent sales tax on retail sales statewide. Funds are returned to the 

county of generation and used mostly for transit operations and transit capital expenses.

Assumptions: Same sales tax growth rate as used for local option sales tax measures.

$28.7

Gas Excise Tax Subventions 

(to Cities and Counties)

Description: Subventions to counties and local jurisdictions in region from the California state gas tax. Revenues for the forecast are proportionate to the percentage of streets and roads that are regionally significant.

Assumptions: Fuel consumption declines in absolute terms by 1 percent due to increasing fuel efficiency in conventional vehicles and adoption of electric and hybrid vehicles. Regionally significant streets and roads (37 to 50 percent of total roads) are classified as either arterials 

or collectors.

$4.6

Transit Farebox Revenue Description: Transit fares collected by transit operators in the SCAG region. 

Assumptions: Farebox revenues increase consistent with historic trends, planned system expansions, and operator forecasts. $26.7

Highway Tolls (in core revenue 

forecast)

Description: Revenues generated from toll roads operated by the Transportation Corridor Agencies (TCA) and from the SR-91 Express Lanes 

operated by the Orange County Transportation Authority (OCTA). 

Assumptions: Consistent with the TCA Traffic and Revenue Report, revenues grow by 1.5 percent (compared to historical growth of about 

8.5 percent) in core revenue forecast scenario.

$11.2

Mitigation Fees

Description: Revenues generated from development impact fees. The revenue forecast includes fees from the Transportation Corridor 

Agency (TCA) development impact fee program, San Bernardino County’s development impact fee program, and Riverside County’s Transportation Uniform Mitigation Fee (TUMF) for both the Coachella Valley and Western Riverside County.

Assumptions: The financial forecast is consistent with revenue forecasts from TCA, San Bernardino Associated Goverments (SANBAG), and 

Riverside County Transportation Commission (RCTC).

$9.5

Local Agency Funds

Description: Includes committed local revenue sources such as transit advertising and auxiliary revenues, lease revenues, and interest and 

investment earnings from reserve funds.

Assumptions: Revenues are based on financial data from transit operators and local county transportation commissions.

$25.5

LOCAL SUBTOTAL $225.5

Note: Numbers may not sum to total due to rounding 
12 Transportation Finance

TABLE 3.2 Core and Reasonably Available Revenue Projections—State Revenue Sources (in Nominal Dollars, Billions)

Revenue Source Revenue Projection Assumptions Revenue Estimate

STATE REVENUE SOURCES

State Transportation Improvement 

Program (STIP)

Description: The STIP is a five-year capital improvement program that provides funding from the State Highway Account (SHA) for projects 

that increase the capacity of the transportation system. The SHA is funded through a combination of state gas excise tax, the Federal Highway Trust Fund, and truck weight fees. The STIP may include projects on state highways, local roads, intercity rail, or public transit systems. 

The Regional Transportation Planning Agencies (RTPAs) propose 75 percent of STIP funding for regional transportation projects in Regional 

Transportation Improvement Programs (RTIPs). Caltrans proposes 25 percent of STIP funding for interregional transportation projects in the 

Interregional Transportation Improvement Program (ITIP).

Assumptions: Funds are based upon the 2011 Report of STIP Balances County and Interregional Shares, August 4, 2011 and 2012 STIP 

Fund Estimate. Long-term forecasts assume no growth in fuel consumption, except in Los Angeles and Orange Counties, where the growth 

is less than historical trends and consistent with forecasts by the local transportation commissions.

$9.4

State Highway Operation and 

Protection Plan (SHOPP)

Description: Funds state highway maintenance and operations projects.

Assumptions: Short-term revenues are based on overlapping 2008 and 2010 SHOPP programs. Long-term forecasts are consistent with 

STIP forecasts and assume no growth in fuel consumption, except in Los Angeles and Orange Counties.

$19.5

State Gasoline Sales Tax Swap

Description: Prior to 2010, state sales tax on gasoline funded discretionary projects through the Transportation Investment Fund, which distributed revenues to the STIP, local streets and roads, and transit. In 2010, the sales tax revenues were “swapped” for an increased excise 

tax (initially 17.3 cents) recalculated each year to ensure revenue neutrality.

Assumptions: The financial forecast assumes that each county receives its fair share of state gasoline sales tax swap based upon county 

population. Future revenues grow by 1.5 percent to be revenue neutral consistent with the gasoline sales tax swap.

$11.0

State Transit Assistance Fund (STA)

Description: STA is funded with 50 percent of state Public Transit Account (PTA) revenues, which come from the diesel sales tax and “spillover” in the gasoline sales tax swap. Funding is distributed by population share and revenue share of the transit operators.

Assumptions: The forecast is based on current funding levels reported by the State Controller. Future funding declines with fuel consumption using assumptions consistent with other sources.

$2.8

Highway Safety, Traffic, Air Quality, 

and Port Security Bond Act of 2006 

(Proposition 1B)

Description: Proposition 1B authorized $19.9 billion to be spent statewide on existing and new statewide transportation-related infrastructure programs and projects through FY2014. Several programs were included under Proposition 1B.

Assumptions: The forecast is consistent with Proposition 1B apportionments for the SCAG region in the Federal Transportation Improvement Program (FTIP) through FY2014.

$3.4

Other State Sources

Description: Other state sources include Service Authority for Freeways and Expressways (SAFE), Freeway Service Patrol, Air Quality Vehicle 

Registration Fee (AB 2766), Environmental Enhancement and Mitigation, and other miscellaneous state grants. The Clean Air and Transportation Improvement Act added Proposition 116 to use state general obligation bonds to finance rail infrastructure.

Assumptions: The RTP uses forecasts provided by LACMTA for Los Angeles County for consistency with the LACMTA long-range transportation plan. These state revenues are not estimated for other counties.

$0.8

STATE SUBTOTAL (State STIP funds include FHWA IM and NHS funding categories) $46.8

Note: Numbers may not sum to total due due to rounding 
Transportation Finance 13

TABLE 3.3 Core and Reasonably Available Revenue Projections—Federal Revenue Sources (in Nominal Dollars, Billions)

Revenue Source Revenue Projection Assumptions Revenue Estimate

FEDERAL REVENUE SOURCES

FHWA Non-Discretionary

Congestion Mitigation and Air Quality (CMAQ) Program

Description: Program to reduce traffic congestion and improve air quality in non-attainment areas.

Assumptions: Short-term revenues are based upon the Caltrans apportionment estimates. Long-term revenues assume that the Federal 

Highway Trust Fund stays solvent, but fuel consumption declines by 1 percent annually. CMAQ funding is assumed to be reduced by 25 percent in 2020 and an additional 25 percent in 2025 due to improved air quality.

$5.0

FHWA Non-Discretionary 

Regional Surface Transportation 

Program (RSTP)

Description: Projects eligible for RSTP funds include rehabilitation and new construction on any highways included in the National Highway 

System (NHS) and Interstate Highways (including bridges). Also, transit capital projects, as well as intracity and intercity bus terminals and 

facilities, are eligible.

Assumptions: Short-term revenues are based upon the Caltrans apportionment estimates. Long-term revenues assume that the Federal 

Highway Trust Fund stays solvent, but fuel consumption declines by 1 percent annually.

$6.7

FTA Formula Programs

5307 Urbanized Area Formula 

(Capital), 5310 Elderly and Persons 

with Disabilities Formula, 5311 

Non-Urbanized Area Formula, 5309 

Fixed Guideway Program

Description: This includes a number of FTA programs distributed by formula. 5307 is distributed annually to state urbanized areas with a 

formula based upon population, population density, and transit revenue miles of service. Program funds capital projects (and operations 

expenses in areas under 200,000 in population), preventive maintenance, and planning activities. 5310 funds are allocated by formula to 

states for capital costs of providing services to the elderly and disabled. The 5311 program provides capital and operating expenses for rural and small urban public transportation systems. Section 5309 Fixed Guideway (FG) funds are also distributed to regions on an urbanizedarea formula.

Assumptions: Formula funds are assumed to decline in proportion with the Federal Highway Trust Fund. As with the FHWA sources, the 

Trust Fund is expected to stay solvent, but fuel consumption declines by 1 percent annually.

$14.2

FTA Non-Formula Program

5309 New and Small Starts, 5309 

Bus & Bus-Related Grants

Description: Capital projects include preliminary engineering, acquisition of real property, final design and construction, and initial acquisition of rolling stock for new fixed guideway systems or extensions, including bus rapid transit, light rail, heavy rail, and commuter rail 

systems. Capital investment grants of less than $75 million are considered “small starts.” “Small starts” have a separate funding category. 

Program funds bus acquisition and other rolling stock, ancillary equipment, and the construction of bus facilities. Also includes bus rehabilitation and leasing, park-and-ride facilities, parking lots associated with transit facilities, and bus passenger shelters.

Assumptions: Operators are assumed to receive FTA discretionary funds in rough proportion to what they have received historically. The 

Federal Highway Trust Fund is expected to stay solvent, but fuel consumption declines by 1 percent annually.

$5.3

Other Federal Funds

Description: Includes other federal programs, such as Regional Transportation Enhancements, Highway Bridge Replacement and Rehabilitation, Homeland Security Grants, Bus Preferential Signal Systems, Highway Earmarks, Hazard Elimination Safety, and Railroad/Highway 

Grade Crossing Protection (Section 130). Also includes a marginal amount from the American Recovery and Reinvestment Act (ARRA) for the 

first year of the forecast.

Assumptions: LACMTA and OCTA provided forecasted revenues for these programs, which have been adopted in the LRTPs for Los Angeles 

and Orange Counties. For other counties, Highway Bridge Program revenues are estimated in the short term using program allocations provided 

by Caltrans through FY2014. ARRA amounts also come from programmed funding. Longer-term estimates are based upon the assumption of a 

1 percent annual decline in fuel consumption as used for other federal funding sources referenced above.

$1.8

FEDERAL SUBTOTAL $33.0

Note: Numbers may not sum to total due to rounding
TABLE 3.4 Core and Reasonably Available Revenue Projections—Innovative Financing & New Revenue Sources (in Nominal Dollars, Billions)

Revenue Source Revenue Projection Assumptions Revenue Estimate

INNOVATIVE FINANCING & NEW REVENUE SOURCES

Bond Proceeds from Local Sales 

Tax Measures

Description: Long-term debt financing secured by locally imposed 1⁄2 percent sales tax measures for Los Angeles, Orange, Riverside, and 

San Bernardino Counties.

Assumptions: Sales tax grows consistent with county historical trends. Assumes minimum debt service coverage of pledged revenue (net 

of any local return portion) in any year of 2.5x for Los Angeles County, 1.3x for Orange County, 1.5x for Riverside County (further restricted to 

a maximum of $975M outstanding), and 1.3x for San Bernardino County—includes currently outstanding and new debt. No debt is assumed 

to be issued for Imperial County.

$25.6

State and Federal Gas Excise Tax 

Adjustment to Maintain Historical 

Purchasing Power 

Description: Additional 15 cents-per-gallon gasoline tax imposed by the state and federal government starting in 2017 through 2024.

Assumptions: Forecast consistent with historical tax rate adjustments for both state and federal gas taxes. $16.9

Mileage-Based User Fee (or equivalent fuel tax adjustment)

Description: Mileage-based user fees would be implemented to replace existing gas taxes (state and federal) by 2025.

Assumptions: Consistent with recommendations from two national commissions established under SAFETEA-LU, it is assumed that a national mileage-based user fee system would be established during the latter years of the RTP. An estimated $0.05 per mile (in 2011 dollars) 

is assumed starting in 2025 to replace existing gas tax revenues.

$110.3 

(est. increment only)

Highway Tolls (includes toll revenue 

bond proceeds)

Description: Toll revenues generated from regional toll facilities including SR-710 North Extension, I-710 South Freight Corridor, East-West 

Freight Corridor, segment of the High Desert Corridor, and Regional Express/HOT Lane Network.

Assumptions: Toll revenues based on recent feasibility studies for applicable corridors. Also includes toll revenue bond proceeds.

$22.3

Private Equity Participation

Description: Private equity share as may be applicable for key initiatives.

Assumptions: Private capital is assumed for a number of projects including toll facilities; also, freight rail package assumes railroads’ share 

of costs for main line capacity and intermodal facilities such as SCIG and ICTF.

$2.7

Freight Fees/National Freight 

Program

Description: Establishment of a national freight program consistent with proposal under MAP-21 and/or establishment of a charge imposed 

nationally on cargo.

Assumptions: Early estimates indicate roughly $2 billion per year nationally for the National Freight Program under MAP-21. Regional 

estimate assumes a conservative percentage of proposed national program. Other mechanisms may include establishment of freight fees 

nationally, whereby rates may be subject to timing and cash flows for qualified projects. Freight fee would be assessed in proportion to relative impacts on the transportation system and would sunset with the completion of qualified projects. Assumes establishment of a national 

program in scope starting in 2015.

$4.2

E-Commerce Tax

Description: E-commerce sales tax on goods and services negotiated over the Internet or other online system.

Assumptions: Notwithstanding the uncertainty in the amount of revenue that is available from AB 155, the revenue could be used for transportation purposes, given the relationship between e-commerce and the delivery of goods to California purchasers. In the event the revenue 

is used solely for transportation, the revenue would need to be allocated to specific uses or areas within the State. One possible method 

would allocate the funds in proportion to population. Under this method, the SCAG region would receive an estimated $3.1 billion through 

2035, assuming AB 155 statewide revenue grows at 3 percent per year. 

$3.1

14 Transportation Finance
Revenue Source Revenue Projection Assumptions Revenue Estimate

Interest Earnings Description: Interest earnings from toll bond proceeds.

Assumptions: Interest earnings are assumed from toll bond proceeds, e.g., East-West Freight Corridor. $0.2

State Bond Proceeds, Federal 

Grants & Other for California HighSpeed Rail Program

Description: Estimated total per November 1, 2011, Draft California High-Speed Rail Business Plan.

Assumptions: State general obligation bonds authorized under the Bond Act approved by California voters as Proposition 1A in 2008; federal grants authorized under ARRA and HSIPR; potential use of qualified tax credit bonds; and private sources.$33.0

Value Capture Strategies

Description: Formation of special districts—infrastructure financing districts and use of tax increment financing.

Assumptions: This strategy refers to capturing the incremental value generated by transportation investments. Specifically, SCAG assumes 

the formation of special districts, including infrastructure financing districts (IFDs); also assumes the use of tax increment financing for 

specific projects (e.g., East-West Freight Corridor).

$1.2

NEW REVENUE SOURCE SUBTOTAL $219.5

GRAND TOTAL $524.7

Note: Numbers may not sum to total due to rounding

Transportation Finance 15
Revenue Source Availability and Risk Assessment

TABLE 4 Availability Assumptions and Risk Assessment

Revenue Source New or 

Existing Availability Assumption Potential Risk Risk Mitigation

Federal Non-Discretionary 

Funds (apportioned) (FTA/

FHWA)

Existing Continued federal funding at current apportionment levels but 

declines with increasing fuel efficiency.

Lack of federal authorization bill upon immediate expiration of current legislation.Funds continue on incremental basis, at 

historic levels (continuing resolution).

Federal Funds Discretionary (FTA/FHWA)Existing Reasonably available based on historical allocations to the 

region or State.

Lack of authorization or award. Alternative funding sources substituted; RTP 

amended if needed.

Local Option Sales Taxes Existing All local sales tax measures will continue throughout the life 

of the RTP. Los Angeles County levies a permanent 1 percent 

tax (a combination of two half-cent sales taxes) and a third 

measure was recently passed (Measure R), which imposes an 

additional 0.5 percent sales tax to fund transportation. Measure 

R expires in 2039. Additionally, several local sales taxes have 

been renewed (Riverside, San Bernardino, Orange, and Imperial 

Counties).

Sales tax generation substantially less than 

anticipated.

Alternative funding sources substituted; RTP 

amended if needed.

State Funds (STIP; SHOPP; 

STA; Gas Tax Swap; Prop 

1B)

Existing Continued state funding at current apportionment levels but 

declines with increasing fuel efficiency for applicable source 

categories.

Transfer of state transportation funds to General Fund for non-transportation purposes 

and/or potential changes to Gas Tax Swap 

impacting transportation sources; further 

delay and/or curtailment of state bond sales. 

Alternative funding sources substituted; RTP 

amended if needed.

Value Capture Strategies New Reasonably available based on past history of local jurisdiction 

financing/match for project development; economic development potential analyzed for specific initiatives (e.g., East-West 

Freight Corridor).

Property owner approval fails; joint development effort generates less than expected 

resources.

Alternative funding sources substituted; RTP 

amended if needed.

Highway Tolls New Reasonably available based on the region’s project finance 

experience with toll corridors, namely the SR-91 and the TCA 

corridors.

Toll revenue generation is inadequate; necessary toll authorization for specific facilities 

fails to pass.

Alternative funding sources substituted; RTP 

amended if needed.

State and Federal Gas 

Excise Tax Adjustment

New Reasonably available based on historical precedence—estimate 

in line with historical revenues.

Fails to garner Congressional and State 

Legislative actions.

Alternative funding sources substituted; RTP 

amended if needed.

16 Transportation Finance
Revenue Source New or 

Existing Availability Assumption Potential Risk Risk Mitigation

Freight Fees/National 

Freight Program

New Reasonably available based on historical precedence (e.g., 

Alameda Corridor experience) and recent U.S. Senate reauthorization proposal—MAP-21.

Fails to garner Congressional action. Alternative funding sources substituted; RTP 

amended if needed.

E-Commerce Tax New Reasonably available based on current initiatives at State level Uncertainty in amount of revenue that is 

available from AB 155; not allocated for 

transportation.

Alternative funding sources substituted; RTP 

amended if needed.

Private Equity 

Participation

New Reasonably available based on current discussions with private 

entities and experience in other parts of the nation with PPP 

initiatives.

Fails to meet appropriate legislative provisions currently authorized as may be necessary for specific projects; fails to adequately 

negotiate with private entities/consortium.

Alternative funding sources/financing substituted; RTP amended if needed.

Interest Earnings New Reasonably available based on general practice with bond 

proceeds.

Interest rate risk and liquidity considerations. Alternative funding sources/financing substituted; RTP amended if needed.

Bond Proceeds from Local 

Sales Tax Measures

New Reasonably available based on past debt financing strategies. Subject to the sale of bonds. Alternative funding sources/financing substituted; RTP amended if needed.

State Bond Proceeds, 

Federal Grants & Other for 

California High-Speed Rail 

Program

New Reasonably available based on state general obligation bonds 

authorized under the Bond Act approved by California voters in 

2008; federal grants authorized under ARRA and HSIPR, etc. 

Fail to garner private-sector commitment; 

fail to adequately generate system user-fee 

revenues to pay debt obligations.

Alternative funding sources/financing substituted; RTP amended if needed.

Mileage-Based User Fee 

(or equivalent fuel tax 

adjustment)

New Reasonably available based upon recommendations from two 

national commissions (National Surface Transportation Policy 

and Revenue Study Commission and National Surface Transportation Infrastructure Financing Commission) created by 

Congress. The incremental amount assumed is equivalent to the 

historical 5 percent long-term growth in the Highway Trust Fund 

(due to periodic adjustments in the gas tax and growth in fuel 

consumption).

Fails to garner Congressional and State 

Legislative actions.

Alternative funding sources substituted; RTP 

amendment if needed.

Transportation Finance 17
Historical Trends

Despite declines in recent years, the Highway Trust Fund has historically grown by 

approximately 5 percent annually (in nominal dollars). The historic growth is due to periodic adjustments in the gas tax and growth in VMT. The historic growth of the Trust Fund 

from gas tax revenues is shown in FIGURE 9. Future VMT is projected to grow at a slower 

rate than the historical average.

FIGURE 9 Historical Highway Trust Fund Revenue from Gasoline Excise Tax

$0

$5

$10

$15

$20

$25

$30

1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009

$ Billions

Source: Federal Highway Administration

Comparison to Historical Trends 

The projected revenue from the mileage-based user fee and adjustments to state and 

federal gas excises taxes, when combined with the core revenue forecast for state and 

federal sources, generate less revenue than the historic average increase in state and 

federal transportation revenues sources of 5 percent annually. FIGURE 10 shows a comparison of the revenues projected for select gas tax-funded sources under the historic 

growth rate of 5 percent annually (in nominal dollars) and under the mileage-based user 

fee and adjustments to state and federal gas excises taxes.

FIGURE 10 Growth of Fuel Tax Generated Sources

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035

$ Billions

Historical 5% Growth Rate for for STIP, SHOPP, CMAQ, RSTP, and FTA Formula

2012 RTP Forecast for for STIP, SHOPP, CMAQ, RSTP, and FTA Formula

Gas Tax Increase

Mileage-Based User Fee

Note: Green line assumes gas tax adjustment and eventual repacement with mileage-based user fee

18 Transportation Finance
Expenditure Categories and Methodology

Transportation expenditures in the SCAG region can be summarized into main categories:

 Capital costs for state highways, regionally significant arterials, local streets and 

roads, as well as transit

 Operating and maintenance costs for state highways, regionally significant arterials, 

local streets and roads, as well as transit

 Debt service payments for current and anticipated bond issuances

In preparing the 2012–2035 RTP/SCS, SCAG asked each of the county transportation commissions to submit detailed capital costs for every highway and transit project 

proposed for the region. The RTP/SCS expenditure estimates also include capital costs for 

regionally significant arterials, active transportation, goods movement, intelligent transportation systems, and transportation demand management investments. The county 

transportation commissions submitted their detailed capital costs via an Internet-based 

database application developed and hosted by SCAG. FIGURE 11 shows an example of the 

standardized template that the county transportation commissioned used to submit cost 

information for capital projects.

FIGURE 11 Example Project Costs by Category

Engineering

($1,000’s)

Right-of-Way

($1,000’s)

Construction

($1,000’s)

Total Costs

($1,000’s)

$2,000 $4,000 $49,000 $55,000

Example Project Expenditures by Funding Source Fderal Funding ($1,000’s) Federal Funding Soure State Funding ($1,000’s) State Funding Source Local Funding ($1,000’s)

Local Funding 

Source

Private Funding

($1,000’s)

Total Funding

($1,000’s)

$45,000 CMAQ $7,000 STIP $3,000 Agency $0 $55,000

The next few sections describe specific economic assumptions and challenges in developing expenditure forecasts.

Capital Project Cost Escalation

While inflation clearly affects the nominal dollars reported for future revenues, the rise in 

construction costs can further erode the purchasing power of transportation revenues. 

After spiking dramatically in 2007, construction costs have corrected in recent years. 

FIGURE 12 shows the increase and decline in California highway construction costs since 

the early 1970s. The United States Army Corps of Engineers Index for Roads, Railroads, 

and Bridges shows similar trends. While the recent correction in construction costs has 

slowed the longer-term increase in costs, the growth still remains above general inflation. 

The financial plan uses a 3.2 percent annual inflation factor to estimate future, nominal 

costs. The faster increase in construction costs than in revenues contributes to a decline 

in purchasing power for transportation funding over the planning period.

FIGURE 12 Highway Project Costs

0

20

40

60

80

100

120

140

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Index Value

Year

3.2% increase

Source: California Department of Transportation

Transportation Finance 19
20 Transportation Finance

Transit Operating and Maintenance (O&M) Costs

Future transit O&M costs are difficult to predict because they depend on a variety of 

factors, such as future revenue-miles of service, labor contracts, and the age of rolling 

stock. The addition of new transit service and capital projects, such as the Exposition 

Transit Corridor, can add to ongoing O&M costs. Over the last decade, these O&M costs 

grew 1 to 10 percent annually, depending on the transit operator (see FIGURE 13). Some 

of the differences in O&M growth are due to rapid expansion among the newer operators 

and outsourcing among the older operators.

For the RTP/SCS, transit O&M costs are estimated based upon historical increases:

 The regional average increase (3.6 percent) is used for most operators. This 

assumes that some of the extraordinary increases for individual operators due to 

rapid expansion will not continue into the future.

 For Los Angeles County, the financial plan relies on detailed forecasts from the 

county transportation commission. These forecasts are consistent with historical 

data and take into account large shifts in O&M costs due to major capital projects.

FIGURE 13 Growth in Transit Operating and Maintenance Costs

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Cost Index (O&M Costs Relative to 1996)

Year

Antelope Valley Transit Authority City of Los Angeles (LADOT) Foothill Transit

LACMTA - Metro Long Beach Transit Montebello Bus Lines

Southern California Regional Rail Authority Santa Clarita Transit Santa Monica's Big Blue Bus

Orange County Transportation Authority Riverside Transit Agency SunLine Transit Agency

Omnitrans Gold Coast Transit

Source: SCAG Analysis of National Transit Database Statistics 
Transportation Finance 21

Multimodal System Preservation and Maintenance

Along with deferred maintenance on the State Highway System, the SCAG region faces 

the need to improve the state of good repair on local streets and roads and in the 

transit system. In an effort to quantify the extent of transit needs, the California Transit 

Association in conjunction with Caltrans and the Federal Transit Administration conducted a study of California’s unmet transit funding needs. In a similar vein, the League of 

California Cities and the California State Association of Counties estimated future system 

preservation and maintenance needs to bring the local streets and roads to a state of 

good repair. TABLE 5 summarizes the total system preservation and maintenance needs 

assumed in the RTP/SCS to bring transit, local streets and roads, and the State Highway 

System to a state of good repair. These estimates include the baseline SHOPP investments and transit O&M costs previously described.

TABLE 5 Multimodal System Preservation and Maintenance Needs

(in Nominal Dollars, Billions)

System State of Good Repair Needs

Included in Estimate

Estimated State of 

Good Repair Cost

Transit

O&M Existing Service; O&M Service 

Expansion; O&M Major New Service; 

Preservation

$139.3

Local Streets and Roads Pavement; Essential Components; Bridges $20.9

State Highway

Bridges, Pavement, Roadside; Mobility, 

Collision Reduction; Mandates, Facilities; 

Emergency Response

$56.7

Total $216.9

Source: SCAG Cost Model 2011

Debt Service

Local agencies in the SCAG region have historically relied on debt financing to ensure that 

revenues are available to meet the cashflow requirements of future expenditures. The 

Los Angeles County Metropolitan Transportation Authority has a detailed county financial model that estimates debt service on a project basis. Other county transportation 

commissions prepare debt service forecasts for rating agencies and report current debt 

service in their comprehensive annual financial reports (CAFRs). The 2012–2035 RTP/

SCS includes all outstanding commitments and interest payments on future bonds and 

commercial paper. Issued debt is expected to remain under debt ceilings.

Summary of Revenue Sources and Expenditures

As shown in FIGURE 14, capital projects total $262.8 billion in nominal dollars. O&M costs 

total $216.9 billion, while debt service obligations total $45.1 billion. Transit-related 

costs compose the largest share of O&M costs for the region, totaling $139.3 billion. This 

expenditure summary meets a total regional budget of $524.7 billion over the 2012–2035 

RTP/SCS time horizon, as shown in FIGURE 15.
22 Transportation Finance

FIGURE 14 Expenditure Summary $524.7 Billion 

(in Nominal Dollars) FY2011–FY2035

Capital Projects

$262.8 (50%)

Debt Service

$45.1 (9%)

O&M Highway

$56.7 (11%)

O&M Transit

$139.3 (27%)

O&M Local Roads

$20.9 (4%)

Source: SCAG Revenue Model 2011

Note: Numbers may not sum to total due to rounding

FIGURE 15 Revenue Summary $524.7 Billion 

(in Nominal Dollars) FY2011–FY2035

Core Federal

Additional Federal $33.0 (6%)

$84.3 (16%)

Core State

$46.8 (9%)

Additional State

$83.2 (16%)

Core Local

$225.5 (43%)

Additional Local

$51.9 (10%)

Source: SCAG Revenue Model 2011

Note: Numbers may not sum to total due to rounding

As shown in FIGURE 16, transit expenditures account for almost half of the RTP/SCS costs 

at 47 percent. Highway expenditures account for 26 percent of the RTP/SCS costs. About 

18 percent of costs are attributable to an “other” category, reflecting proposed investments in goods movement, grade separations, active transportation, transportation 

demand management, and transportation system management improvements. Consistent 

with historical practice, agencies in the region are expected to bond against future revenues to provide additional funding in the early years of the plan. As a result, debt service 

equal to historical payments and future bonding needs has been included as part of the 

RTP/SCS. Anticipated debt service payments make up 9 percent of total costs.

FIGURE 16 Revenues Compared to Costs by Mode

0

100

200

300

400

500

600

Revenues Costs

In $ Billions

Transit Flexible Highway Other Debt Service

Note: Numbers may not sum to total due to rounding

The following TABLE 6 provides details of the SCAG region’s 2012–2035 RTP/SCS revenue 

forecast by source in five-year increments. This is followed by TABLE 7, which provides 

details of the region’s expenditures by category in five-year increments.
TABLE 6 2012–2035 RTP/SCS Revenues (in Nominal Dollars, Billions)

REVENUE SOURCES FY2011–

FY2015

FY2016–

FY2020

FY2021–

FY2025

FY2025–

FY2030

FY2031–

FY2035 TOTAL

LOCAL

 Sales Tax $16.3 $22.1 $28.7 $36.2 $44.7 $148.0

 – County $13.1 $17.8 $23.1 $29.2 $36.1 $119.4 

 – Transportation Development Act (TDA) $3.3 $4.3 $5.5 $6.9 $8.6 $28.7

 Gas Tax (Subvention to Cities & Counties) $1.0 $1.0 $0.9 $0.9 $0.8 $4.6

 Other Local Funds $5.3 $4.6 $4.7 $5.6 $5.2 $25.5

 Transit Fares $3.2 $4.3 $5.3 $6.4 $7.5 $26.7

 Tolls $1.4 $1.7 $2.1 $2.6 $3.3 $11.2 

 Mitigation Fees $1.4 $1.8 $1.9 $2.1 $2.3 $9.5 

LOCAL TOTAL $28.7 $35.4 $43.5 $53.9 $64.0 $225.5 

STATE

 State Highway Operations and Protection Program (SHOPP) $3.7 $4.2 $4.0 $3.8 $3.6 $19.5

 State Transportation Improvement Program (STIP) $1.9 $2.0 $1.9 $1.8 $1.7 $9.4

 – Regional (RTIP) $1.3 $1.4 $1.3 $1.2 $1.2 $6.4

 – Interregional (ITIP) $0.6 $0.6 $0.6 $0.6 $0.5 $3.0

 State Gasoline Sales Tax Swap $1.4 $1.7 $2.1 $2.6 $3.3 $11.0

 State Transit Assistance (STA) $0.5 $0.5 $0.6 $0.6 $0.7 $2.8

 Proposition 1B (Infrastructure Bonds) $3.0 $0.4 $0.0 $0.0 $0.0 $3.4

 Other State Funds (1) $0.3 $0.1 $0.1 $0.1 $0.1 $0.8

STATE TOTAL $10.8 $9.0 $8.7 $9.0 $9.4 $46.8 

FEDERAL 

 Federal Transit $3.0 $3.6 $3.9 $4.3 $4.7 $19.5 

 – Federal Transit Formula $2.3 $2.6 $2.8 $3.1 $3.4 $14.2

 – Federal Transit Non-Formula $0.7 $1.0 $1.1 $1.2 $1.3 $5.3

 Federal Highway & Other $2.9 $2.6 $2.6 $2.6 $2.8 $13.5

 – Congestion Mitigation and Air Quality (CMAQ) $1.3 $1.1 $0.9 $0.8 $0.9 $5.0

 – Surface Transportation Program (Regional) $1.1 $1.2 $1.3 $1.5 $1.6 $6.7

 – Other Federal Funds (2) $0.5 $0.3 $0.3 $0.3 $0.4 $1.8

FEDERAL TOTAL $5.9 $6.1 $6.5 $6.9 $7.5 $33.0 

INNOVATIVE FINANCING & 

NEW REVENUE SOURCES

 Bond Proceeds from Local Sales Tax Measures $9.4 $10.4 $5.9 $0.0 $0.0 $25.6

 State and Federal Gas Excise Tax Adjustment $0.0 $8.6 $8.3 $0.0 $0.0 $16.9

 Mileage-Based User Fee $0.0 $0.0 $8.9 $48.5 $52.9 $110.3

 Highway Tolls (including bond proceeds) $3.0 $0.0 $9.8 $3.8 $5.7 $22.3

 Private Equity Participation $1.3 $0.1 $0.1 $1.2 $0.0 $2.7

 Freight Fees/National Freight Program $0.1 $0.9 $1.0 $1.0 $1.2 $4.2

 E-Commerce Tax $0.3 $0.6 $0.6 $0.7 $0.9 $3.1

 Interest Earnings $0.0 $0.0 $0.1 $0.1 $0.1 $0.2

 California High-Speed Rail Program Funding $0.0 $3.9 $10.2 $14.3 $4.5 $33.0

 Value Capture Strategies $0.0 $0.0 $1.2 $0.0 $0.0 $1.2

INNOVATIVE FINANCING & NEW REVENUE SOURCES TOTAL $14.1 $24.5 $46.1 $69.6 $65.2 $219.5

REVENUE TOTAL $59.5 $75.0 $104.8 $139.3 $146.1 $524.7

Notes: 

(1) Service Authority for Freeways and Expressways (SAFE), Freeway Service Patrol, Air Quality Vehicle Registration Fee (AB 2766), Environmental Enhancement and Mitigation.

(2) Includes other federal programs, e.g., Regional Transportation Enhancements, Highway Bridge Replacement and Rehabilitation, Homeland Security Grants, Bus Preferential Signal Systems, Highway Earmarks, local assistance, 

Hazard Elimination Safety, and Railroad/Highway Grade Crossing Protection (Section 130). 

Numbers may not sum to total due to rounding

Transportation Finance 23
TABLE 7 2012–2035 RTP/SCS Expenditures (in Nominal Dollars, Billions)

RTP COSTS FY2011–

FY2015

FY2016–

FY2020

FY2021–

FY2025

FY2026–

FY2030

FY2031–

FY2035 TOTAL

Capital Projects: $37.3 $44.8 $57.1 $63.4 $60.2 $262.8

 Arterials $4.4 $3.8 $3.8 $4.7 $5.4 $22.1

 Grade Separations & Goods Movement $8.1 $7.9 $12.9 $14.6 $5.0 $48.4

 High-Occupancy Vehicle/High-Occupancy Toll Lanes $5.2 $2.5 $0.6 $4.2 $8.4 $20.9

 Mixed-Flow and Interchange Improvements $3.4 $4.5 $5.0 $2.7 $0.5 $16.0

 Toll Facilities $1.5 $10.9 $5.8 $3.3 $5.8 $27.3

 Transportation System Management (including ITS) $1.3 $1.2 $0.8 $1.9 $2.4 $7.6

 Transit $11.6 $13.1 $27.3 $28.5 $26.4 $106.9

 Active Transportation $0.7 $0.4 $0.3 $1.9 $3.4 $6.7

 Transportation Demand Management $0.2 $0.2 $0.2 $1.3 $2.5 $4.5

 Other (1) $0.7 $0.4 $0.6 $0.4 $0.4 $2.5

Operations and Maintenance: $19.4 $22.9 $37.4 $63.7 $73.5 $216.9

 Highway $3.4 $3.0 $12.5 $18.8 $19.1 $56.7

 Transit $14.9 $18.8 $23.8 $37.0 $44.8 $139.3

 Local Streets and Roads $1.1 $1.1 $1.2 $7.9 $9.6 $20.9

Debt Service $2.8 $7.3 $10.3 $12.2 $12.5 $45.1

COST TOTAL $59.5 $75.0 $104.8 $139.3 $146.1 $524.7

Note: (1) Includes: environmental mitigation, landscaping, and project development costs. 

Numbers may not sum to total due to rounding

24 Transportation Finance
Transportation Finance 25

APPENDIX A: Transportation Funding in the SCAG Region

Revenue Generator Revenue Source

Transit Ridership

Toll Road Usage

Development

Gas & Diesel

Sales (in $)

Gas & Diesel

Sales (in gal.)

Truck Weight Fees

Bond Revenues

All Retail Sales

L1: Local Sales Tax Measures

L2: Transportation Development Act (LTF)

L4: Farebox Revenue

L5: Highway Tolls

L6: Mitigation Fees

L3: Gas Tax Subvention (for local streets & roads)

S1: State Transportation Improvement Program (STIP)

S2: State Highway Operations & Protection Program (SHOPP)

F1: Congestion Mitigation & Air Quality (CMAQ)

F2: Regional Surface Transportation Program (RSTP)

F3: FTA Formula

F4: FTA Discretionary

S4: PTA

1/2

1/2 Caltrans

STA(RTPAs)

S5: Prop 1B • Local Streets & Roads

• Other

• Air Quality

• STIP

• CMIA [ • Public Transit [

S3: Gas Tax Swap • Local Streets & Roads

• STIP

• SHOPP

• Transportation Debt Service Fund [ [

Federal General Funds

1/2% to 1%

1/4%

Gas Tax Swap

(Equivalent

Excise Tax)

Diesel Sales

Tax

State Gas

Excise Tax

$0.18

Highway Users

Aeronautics Bicycles

SHA

Federal Aid

Federal Highway

Trust Fund

Federal Gas

Excise Tax

$0.183

F6: American Recovery & Reinvestment Act (ARRA)
APPENDIX B: Details about Revenue Sources

Local Revenue Sources

LOCAL OPTION SALES TAX MEASURES

Description: Revenues are derived from locally imposed 1⁄2 percent sales taxes for select 

counties. Imperial, Los Angeles, Orange, Riverside, and San Bernardino Counties currently 

have sales tax measures dedicated to transportation expenditures.

Most local sales tax measures are for a limited term, but all continue through the RTP/

SCS planning period. Imperial County Measure D continues through 2050, Orange County 

Measure M continues through 2041, Riverside County Measure A continues through 2039, 

and San Bernardino County Measure I continues through 2040. Los Angeles County levies 

a permanent 1 percent tax (a combination of two 1⁄2 percent sales taxes—Proposition 

A and Proposition C). In addition, Los Angeles County Measure R provides a temporary, 

additional 1⁄2 percent sales tax (on top of the existing, permanent 1 percent sales tax) and 

continues through 2039. Ventura County is the only county in the SCAG region without a 

local sales tax measure.

Base Year: FY2011.

Data Sources: Sales tax forecast data provided by the local transportation commissions; UCLA Anderson Forecast; historical data on revenues reported by the State Board 

of Equalization (SBOE) in 1985–86 through 2008–09 Annual Reports, Table 21C. Actual 

local tax allocations for 2009–10 and 2010–11 provided by SBOE.

Real Growth Rate: Los Angeles County projects an initially higher growth rate as sales 

taxes recover from the Great Recession. The growth rates are consistent with those for 

the Transportation Development Act since both sources are tied to sales tax revenue 

generation: Imperial County—1.9 percent; Los Angeles County—3.9 percent to FY2020, 

1.7 percent to FY2030, 1.2 percent to FY2035; Orange County—1.7 percent; Riverside 

County—2.3 percent; San Bernardino County—2.3 percent; Ventura County—2.3 

percent.

Revenue Total: $119.4 billion (nominal dollars).

TRANSPORTATION DEVELOPMENT ACT 

(LOCAL TRANSPORTATION FUND)

Description: The Transportation Development Act (TDA) provides two major sources of 

funding for public transportation—the Local Transportation Fund (LTF) and the State 

Transit Assistance (STA) fund. LTF funds are derived from a quarter-cent sales tax on 

retail sales statewide. Funds are returned to the county of tax generation. This category 

includes Article 3, 4, 4.5, and 8 of the Government Code. In the SCAG region, TDA funds 

are used mostly for transit operations and transit capital expenses. Article 3 funds support bicycle and pedestrian facilities.

Base Year: FY2011.

Data Sources: Sales tax forecast data provided by the local transportation commissions; 

UCLA Anderson Forecast; historical data on revenues reported by the SBOE in 1985–86 

through 2008–09 Annual Reports, Table 21B. Actual local tax allocations for 2009–10 

and 2010–11 provided by SBOE.

Real Growth Rate: Imperial County—1.9 percent; Los Angeles County—3.9 percent 

to FY2020, 1.7 percent to FY2030, 1.2 percent to FY2035; Orange County—1.7 percent; Riverside County—2.3 percent; San Bernardino County—2.3 percent; Ventura 

County—2.3 percent.

Revenue Total: $28.7 billion (nominal dollars).

GAS EXCISE TAX SUBVENTIONS 

Description: Gas tax subventions to counties and cities in the region.

Base Year: FY2011.

Data Sources: Gas tax subvention revenue data was collected for each city and county in 

the SCAG region from the California State Controller (Controller), Street and Roads Annual 

Reports (Tables 3 and 9). Growth in subvention revenues is based on expected changes 

in vehicle fuel consumption forecasted by SCAG. Increasing fuel efficiency in conventional 

vehicles due to newly adopted CAFE standards as well as greater use of hybrid and electric vehicles are expected to reduce fuel consumption in California and the SCAG region. 

26 Transportation Finance
SCAG uses a 1 percent annual decline in fuel consumption to produce a conservative 

estimate of changes in revenues associated with fuel taxes.

Revenues for the forecast are shown in proportion to the percentage of streets and roads 

that are regionally significant in each county. Regionally significant streets and roads are 

generally classified as either arterials or collectors. 

The proportion of regionally significant roads is consistent with the 2004 and 2008 RTPs 

and is based upon road classification and lane-mile data collected from the California 

Department of Transportation (Caltrans) and local county transportation commissions. 

The proportion of arterials and collectors in each county was calculated relative to the 

total lane-miles for that county and applied to the total subvention revenues for the 

county. The percentages are: Imperial County—39 percent; Los Angeles County—46 

percent; Orange County—50 percent; Riverside County—37 percent; San Bernardino 

County—45 percent; Ventura County—41 percent.

Real Growth Rate: Negative 3.3 percent annually (nominal growth rate is -0.5 percent).

Revenue Total: $4.6 billion (nominal dollars).

TRANSIT FAREBOX REVENUE

Description: Transit fares collected by transit operators in the SCAG region.

Base Year: FY2009.

Data Sources: Historical fare revenue data were collected from the Controller, Transit 

Operators and Non-Transit Claimants Annual Report, Fiscal Years 1978–79 through 

2007–08, Table 1—Statement of Revenues and Expenses. Additional fare revenue 

projections were derived from financial sections of long-range transportation plans from 

the Los Angeles County Metropolitan Transportation Authority (LACMTA) and the Orange 

County Transportation Authority (OCTA). Revenues in the forecast account for fixed route 

services (e.g., bus, urban rail, and light rail), smart shuttles, paratransit and dial-a-ride 

services. Revenues were forecasted separately for 14 major regional operators in addition 

to other operators in the region.

Fare revenue forecasts were also collected from the Southern California Regional Rail 

Authority (SCRRA) for the Metrolink commuter rail system. The commuter rail revenues 

are distributed among the counties that support the rail service, based on data provided 

in the SCRRA Strategic Assessment. 

Real Growth Rate: Historically, the region has experienced a real growth rate in fare 

revenues of about 2.7 percent. The following rates were used in the forecast:

 Los Angeles County—3.7 percent to FY2020 and 0.2 percent to FY2035 (consistent 

with the LACMTA long-range plan and slightly less than historical growth)

 Orange County—2.7 percent (consistent with the OCTA long-range plan and considerably less than historical growth)

 Metrolink Regional System—3.5 percent (consistent with the SCRRA Strategic 

Assessment)

 Other Transit Operators in the region—2.7 percent (historical regional average)

These rates result in fare revenue growth well below historical averages.

Revenue Total: $26.7 billion (nominal dollars).

HIGHWAY TOLLS

Description: This category includes revenues generated from toll roads operated by the 

Transportation Corridor Agencies (TCA) and OCTA. TCA consists of two separate government entities—the San Joaquin Hills Transportation Corridor Agencies (SJHTCA), which 

oversees the San Joaquin Hills (SR-71) toll road, and the Foothill/Eastern Transportation 

Corridor Agencies (FETCA), which oversees the Foothill (SR-241) and Eastern (SR-241, 

SR-261, and SR-133) toll roads. OCTA operates the 91 Express Lanes. Revenues are used 

for that facility exclusively.

Forecasting future toll revenues requires estimates of the number of vehicles using the 

facilities and the tolls being charged. The RTP/SCS forecasts toll revenues consistent 

with the 2008 TCA Traffic and Revenue Report, which forecasts 1.5 percent growth in 

revenues. This is a conservative assumption compared to historical growth of about 8.5 

percent.

Base Year: FY2010.

Data Sources: Transportation Corridor System, Final Traffic and Revenue Report, April 

10, 2008; FETCA, Financial Statements, June 30, 2006 to 2010; SJHTCA, Financial 

Transportation Finance 27
Statements, June 30, 2006 to 2010; 91 Express Lanes Fund, Financial Statements, 

June 30, 2006 to 2009.

Real Growth Rate: 1.5 percent annually.

Revenue Total: $11.2 billion (nominal dollars).

MITIGATION FEES

Description: This category includes revenues generated from development impact fees. 

These fees are based on the general principle that future development within a specified area/jurisdiction will benefit from the construction of transportation improvements. 

Fees are assessed on new residential and non-residential (e.g., commercial and industrial) development. Within the region, a number of programs fund regionally significant 

transportation investments—TCA development impact fee program; Riverside County’s 

Transportation Uniform Mitigation Fee (TUMF for both the Coachella Valley and Western 

Riverside County); and San Bernardino County’s Development Impact Fee (DIF) program.

The RTP/SCS financial forecast is consistent with revenue forecasts from the Riverside 

County Transportation Commission (RCTC) and San Bernardino Associated Governments 

(SANBAG). The growth in mitigation fees is consistent with projected growth in retail 

sales.

Base Year: Various.

Data Sources: Revenue forecast collected from Coachella Valley Association of 

Governments (CVAG); Western Riverside Council of Governments (WRCOG); RCTC; 

and SANBAG. Additional sources—Transportation Corridor System, Final Traffic and 

Revenue Report, April 10, 2008; FETCA, Financial Statements, June 30, 2006 to 2010; 

SJHTCA, Financial Statements, June 30, 2006 to 2010; 91 Express Lanes Fund, Financial 

Statements, June 30, 2006 to 2009; and Controller, Transportation Planning Agencies 

Annual Report, Fiscal Years 1987–88 through 2007–08, Table 1—Statement of Revenues 

for All Fund Types.

Real Growth Rate: CVAG TUMF—1.6 percent; WRCOG TUMF—1.6 percent; SANBAG 

DIF—not applicable; TCA Development Impact Fee—not applicable.

Revenue Total: $9.5 billion (nominal dollars).

LOCAL AGENCY FUNDS 

Description: Includes local revenue sources such as transit advertising and auxiliary revenues, lease revenues, and interest and investment earnings from reserve funds. For Los 

Angeles County, interest income from Propositions A and C, LTF, and STA are included 

under this source. Income from financing is also included, while principal and interest 

payments are included as part of debt service. For Orange County, interest income from 

Measure M and LTF as well as general funds and several transit-related programs are 

included.

Base Year: FY2005 to FY2006.

Data Source: Revenues are based on financial data from transit operators and local 

county transportation commissions.

Real Growth Rate: Not applicable.

Revenue Total: $25.5 billion (nominal dollars).

State Revenue Sources

STATE TRANSPORTATION IMPROVEMENT PROGRAM (STIP)

Description: The State Highway Account (SHA) is funded through a combination of state 

gas excise tax, the Federal Highway Trust Fund, and other miscellaneous revenues (e.g., 

interest and sale of property). In addition, the SHA received money as a result of the “Gas 

Tax Swap.” The Gas Tax Swap revenues are estimated separately in the SCAG revenue 

forecast as explained further below.

The STIP is a five-year capital improvement program that provides funding from the SHA 

for capital projects that increase the capacity of the transportation system. The STIP may 

include projects on state highways, local roads, intercity rail, or public transit systems. 

The STIP is renewed every two years and consists of separate projects. The Regional 

Transportation Planning Agencies propose 75 percent of STIP funding for regional transportation projects in Regional Transportation Improvement Programs (RTIPs). Caltrans 

proposes 25 percent of STIP funding for interregional transportation projects in the 

Interregional Transportation Improvement Program (ITIP).

28 Transportation Finance
Funds are based on 2010 STIP programs of projects for the five years covering FY2011 

through 2015. Starting in FY2011, the average allocation from the 2010 STIP program is 

included and grown by forecasted changes in fuel consumption. As with other revenue 

sources, the RTP/SCS adopts a conservative assumption that fuel consumption declines 

by 1 percent annually due to changes in CAFE standards and the adoption of hybrid and 

electric vehicles.

Base Year: FY2011 to FY2015.

Data Sources: California Transportation Commission, 2011 Report of STIP Balances 

County and Interregional Shares, August 4, 2011; SCAG estimates of the effects of new 

CAFE standards on fuel consumption.

Real Growth Rate: Negative 3.3 percent annually (nominal growth rate is -0.5 percent).

Revenue Total: $9.4 billion (nominal dollars).

STATE HIGHWAYS OPERATION AND PROTECTION PLAN (SHOPP)

Description: The SHOPP is a four-year program that provides funding from the SHA to be 

used for projects that reduce collisions and hazards to motorists, preserve and rehabilitate bridges and roadways, enhance and protect roadsides, and improve the operation of 

the State Highway System. It does not include projects that increase the capacity of the 

transportation system. SHOPP revenues are taken “off the top” before allocations are 

made for the STIP. As with the STIP, the SHOPP receives additional money from the Gas 

Tax Swap. These additional revenues are explained further below.

Short-term SHOPP revenues are based on the 2008 and 2010 SHOPP programs provided 

by Caltrans. These overlapping programs provide funds that cover FY2009 to FY2012 and 

FY2011 to FY2014. To estimate the SHOPP allocations for FY2013 and FY2014, the revenues in the 2010 SHOPP program are doubled, since the allocations for the 2012 SHOPP 

were not available in time for the financial forecasts.

Starting in FY2015, long-term SHOPP revenues are estimated by the average of annual 

revenues grown by forecasted changes in fuel consumption. Since SHOPP revenues 

have been variable, the annual average is based on the SHOPP allocations for the last 

ten years. Consistent with other revenue sources, the RTP/SCS adopts a conservative 

assumption that fuel consumption declines by 1 percent annually due to changes in CAFE 

standards and the adoption of hybrid and electric vehicles.

The 2011 Ten-Year SHOPP identifies $7.4 billion in statewide annual needs, while expenditures programmed for the next four years are only $1.8 billion annually. The financial 

plan assumes that the state gas excise tax remains unchanged with the same percentage 

split of funding available for capital projects. However, the increase in fuel efficiency will 

erode the funding available over the RTP/SCS planning period.

Base Year: FY2005 to FY2014.

Data Sources: Caltrans, 2004 SHOPP, Approved April 8, 2004; Caltrans, 2006 SHOPP, 

Approved March 16, 2006; Caltrans, 2008 SHOPP, Approved March 13, 2008; Caltrans, 

2010 SHOPP, Approved February 24, 2010; SCAG estimates of the effects of new CAFE 

standards on fuel consumption.

Real Growth Rate: Negative 3.3 percent annually (nominal growth rate is -0.5 percent).

Revenue Total: $19.5 billion (nominal dollars).

STATE GASOLINE SALES TAX SWAP

Prior to 2010, the state of California charged sales tax on gasoline purchases. Passed by 

the general electorate in March 2002, Proposition 42 amended the State Constitution to 

transfer state sales taxes on gasoline, other than revenues calculated under the spillover 

formula, from the General Fund to a Transportation Investment Fund (TIF) for transportation purposes. Through a series of provisions enacted by Assembly Bill x8-6 (Chapter 11, 

Statutes of 2010), Senate Bill 70 (Chapter 9, Statutes of 2010), and Assembly Bill 105 

(Chapter 6, Statutes of 2011), the California Legislature eliminated the sales tax on gasoline and replaced the tax with an additional excise tax on gasoline. In essence, the state 

gasoline sales tax revenues were “swapped” for an increased state excise tax.

Effective July 1, 2010, the gasoline excise tax increased by 17.3 cents. On July 1, 2011, 

sales taxes on diesel fuel increased by 1.75 percent and the excise tax decreased—to 

ensure local transit operators received STA funding (share also increased from twothirds to 75 percent). Each year, the SBOE is required to adjust the excise tax, so the 

Gas Tax Swap remains revenue neutral. As a result, the financial plan assumes that the 

Transportation Finance 29
Gas Tax Swap generates the same revenues as generated under the prior state sales tax 

on gasoline.

Although the revenues derived from the new excise tax cannot be used to pay bond debt 

service or loans to the State General Fund, AB 105 requires the Controller to transfer 

an amount equal to the amount of the monthly debt service paid by the General Fund on 

transportation bonds into the SHA. Such revenues are to be held in the account for future 

appropriation by the Legislature.

The remaining net revenues derived from the new excise tax are allocated 44 percent 

to local streets and roads, 44 percent to the STIP, and 12 percent to the SHOPP. For the 

purposes of the financial plan, all of these revenues have been forecasted as a single 

revenue source.

The financial forecast assumes each county receives its fair share of the gasoline tax 

swap revenues based upon county population. Future revenues are expected to grow by 

the increase in retail sales. The financial plan assumes that future growth in retail sales 

will be consistent with the 1.5 percent annual growth statewide between FY1979 and 

FY2009. This 30-year time period includes the recent decline in retail sales due to the 

recession. As a result, SCAG expects this to be a conservative estimate of future growth 

in retail sales.

Base Year: FY2009.

Data Sources: SBOE, 1979 through 2009 Annual Reports, Tables 18 and 20; California 

Department of Finance, E-2. California County Population Estimates and Components of 

Change by Year—July 1, 2000–2009, December 2009.

Real Growth Rate: 1.5 percent annually.

Revenue Total: $11.0 billion (nominal dollars).

STATE TRANSIT ASSISTANCE FUND (STA) FROM THE PUBLIC 

TRANSPORTATION ACCOUNT (PTA)

Description: The Public Transportation Account (PTA) is a trust fund that derives its 

revenues from a 4.75 percent sales tax on diesel fuel. One-half of the PTA trust fund is 

directed toward the STA for local transit.

Prior to the Gas Tax Swap, the PTA also received funding from a 4.75 percent sales tax 

on the 9-cent state excise tax on gasoline and “spillover” funds (4.75 percent tax on 

all taxable sales minus 5 percent tax on all taxable sales minus gasoline). The legislation enacted in 2011 (Assembly Bill 105), reenacted the provisions of the Gas Tax Swap 

and addressed issues previously raised by the passage of Propositions 22 and 26. The 

legislation also increased the state sales tax on diesel fuel by 1.75 percent in FY2015 and 

reduced the state excise tax on diesel fuel to 13 cents. The revenue from the increased 

portion of the state sales tax is allocated to the STA to maintain funding to local transit.

As with the Gas Tax Swap, the changes in the diesel excise tax are intended to be revenue neutral. The SBOE adjusts the diesel excise tax annually to be consistent with the 

revenue loss from the sales tax changes on diesel.

Actual historical funding figures are reported by the Controller through FY2011. Future 

funding is estimated for the financial plan using the growth in fuel consumption. 

Consistent with other funding sources, the financial plan assumes that fuel consumption 

will decline by 1 percent annually.

Base Year: FY2011.

Data Sources: Controller, Transportation Planning Agencies Annual Report, Fiscal Years 

1987–88 through 2007–08, Table 1—Statement of Revenues for All Fund Types; Data for 

FY2009 through FY2011 comes from Quarterly State Transit Assistance reports from the 

Controller; SCAG estimates of the effects of new CAFE standards on fuel consumption.

Real Growth Rate: Negative 3.3 percent annually (nominal growth rate is -0.5 percent).

Revenue Total: $2.8 billion (nominal dollars).

HIGHWAY SAFETY, TRAFFIC, AIR QUALITY, AND PORT FUND 

(PROPOSITION 1B)

Description: The Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond 

Act of 2006, approved by the voters as Proposition 1B on November 7, 2006, authorized 

$19.9 billion over several years to fund existing and new statewide transportation-related 

infrastructure programs and projects, such as the Corridor Mobility Improvement Account, 

the Trade Corridor Improvement Fund, the State-Local Partnership Program Account, 

30 Transportation Finance
as well as STIP and SHOPP augmentation. Legislation enacted together with the budget 

further defines how several of these programs work.

The financial plan includes all Proposition 1B allocations included in the 2011 Federal 

Transportation Improvement Program (2011 FTIP). This includes allocations through 

FY2014. In addition, LACMTA and OCTA have estimated other allocations through FY2018.

Base Year: FY2011.

Data Sources: SCAG, 2011 FTIP; LACMTA, 2009 Long-Range Transportation Plan, April 

29, 2010; OCTA, 2010 LRTP Forecast, August 25, 2010.

Real Growth Rate: Not applicable.

Revenue Total: $3.4 billion (nominal dollars).

OTHER STATE SOURCES

Description: Other state sources include Service Authority for Freeways and 

Expressways, Vehicle Registration Fee, Freeway Service Patrol, Air Quality Vehicle 

Registration Fee (AB 2766), Environmental Enhancement and Mitigation, and other 

miscellaneous state grants. The Clean Air and Transportation Improvement Act added 

Proposition 116 to use state general obligation bonds to finance rail infrastructure. The 

RTP uses forecasts provided by LACMTA for Los Angeles County for consistency with the 

LACMTA long-range transportation plan. These state revenues are not estimated for other 

counties.

Base Year: FY2006.

Data Source: LACMTA, 2009 Long-Range Transportation Plan, April 29, 2010.

Real Growth Rate: Not applicable.

Revenue Total: $0.8 billion (nominal dollars).

Federal Revenue Sources

CONGESTION MITIGATION AND AIR QUALITY (CMAQ)

Description: The CMAQ program is a federal funding program to reduce traffic congestion and improve air quality in federally designated air quality non-attainment areas. With 

CMAQ formula changes under SAFETEA-LU, Imperial County is a recipient of CMAQ funding along with the other five counties in the SCAG region.

Short-term revenues through FY2014 are based upon apportionment estimates provided 

by Caltrans for each county. Starting in FY2015, revenues are expected to decline along 

with the Federal Highway Trust Fund (HTF). The HTF grew by 1.8 percent (1.7 percent 

in the Highway Account) over the 25-year period from 1984 to 2009. However, recent 

appropriations have exceeded money available in the fund. Since 2008, the HTF has failed 

to meet its obligations and has required Congress to authorize $34.5 billion in transfers 

from the General Fund to keep it solvent.

The financial plan assumes that Congress will reach agreement on maintaining solvency 

of the HTF over the RTP/SCS planning period. However, the core revenues available from 

the HTF are expected to decline due to increasing fuel efficiency. Consistent with other 

revenue sources, the financial plan uses a conservative assumption that fuel consumption declines by 1 percent annually due to changes in CAFE standards and the adoption of 

hybrid and electric vehicles.

Reflecting improvements in air quality, the RTP/SCS assumes that the SCAG region will 

reach attainment in stages for a number of pollutants and that the severity level for other 

pollutants will lessen over the planning period. To reflect these conditions, CMAQ funding 

is expected to decline by 25 percent in 2020 and another 25 percent in 2025.

Base Year: FY2014.

Data Sources: Caltrans, CMAQ Apportionments for 1997–98 through 2009–10, various 

years; Caltrans, CMAQ 2011 FSTIP Estimates, October 15, 2009; FHWA, Federal Highway 

Statistics 2008, Table FE-210: Status of the Federal Highway Trust Fund 1957–2008.

Real Growth Rate: Negative 3.3 percent annually (nominal growth rate is -0.5 percent).

Revenue Total: $5.0 billion (nominal dollars).

Transportation Finance 31
REGIONAL SURFACE TRANSPORTATION PROGRAM (RSTP)

Description: The Regional Surface Transportation Program (RSTP) was established by 

California state statute to utilize Surface Transportation Program funds, which are a 

federal source reauthorized under SAFETEA-LU. Projects eligible for RSTP funds include 

rehabilitation and new construction on any highways included in the National Highway 

System and Interstate Highways that are not classified as local or rural minor collectors.

Short-term revenues through FY2014 are based upon apportionment estimates provided 

for each county by Caltrans. Starting in FY2015, revenues are estimated to decline with 

the HTF. As with CMAQ funding, the financial plan uses the assumption that the core 

revenues available from the HTF will decline due to increasing fuel efficiency. Consistent 

with other revenue sources, fuel consumption is expected to decline by 1 percent annually 

due to changes in CAFE standards and the adoption of hybrid and electric vehicles.

Base Year: FY2014.

Data Sources: Caltrans, RSTP Apportionments for 1997–98 through 2009–10, various 

years; Caltrans, RSTP 2011 FSTIP Estimates, October 15, 2009; FHWA, Federal Highway 

Statistics 2008, Table FE-210: Status of the Federal Highway Trust Fund 1957–2008.

Real Growth Rate: Negative 3.3 percent annually (nominal growth rate is -0.5 percent).

Revenue Total: $6.7 billion (nominal dollars).

FTA FORMULA—SECTIONS 5307, 5310, 5311, 

AND 5309 FIXED GUIDEWAY

Description: FTA Section 5307 provides revenues for transit projects in urbanized areas, 

including capital purchases or preventive maintenance of the transit fleet. Revenues 

are distributed to state urbanized areas by a formula based upon population, population 

density, and transit revenue miles of service.

FTA Section 5311 provides revenues for capital and operating expenses incurred by rural 

and small urban transit programs (areas with population under 50,000 as designated by 

the Bureau of the Census). FTA Section 5310 revenues are for specialized transit programs including programs for seniors and persons with disabilities. A portion of Section 

5309 is provided for fixed-guideway rail improvements and is allocated by formula.

The Controller reports revenues received by SCAG region transit operators. Starting in 

FY2015, the financial plan uses the assumption that FTA formula revenues will decline in 

proportion with the HTF. The fund grew by 1.8 percent (2.9 percent in the mass transit 

account) over the 25-year period from 1984 to 2009. As with CMAQ and RSTP funding, 

the financial plan uses the assumption that the core revenues available from the HTF will 

decline due to increasing fuel efficiency. Consistent with other revenue sources, fuel consumption is expected to decline by 1 percent annually due to changes in CAFE standards 

and the adoption of hybrid and electric vehicles.

Base Year: FY2010.

Data Sources: FTA, FTA Fiscal Years 2006 to 2010 Apportionments, Allocations, and 

Corrections, various years; Controller, Transit Operators and Non-Transit Claimants 

Annual Report, Fiscal Years 1999–00 through 2007–08, Table 1—Statement of Revenues 

and Expenses; FHWA, Federal Highway Statistics 2008, Table FE-210: Status of the 

Federal Highway Trust Fund 1957–2008.

Real Growth Rate: Negative 3.3 percent annually (nominal growth rate is -0.5 percent).

Revenue Total: $14.2 billion (nominal dollars).

FTA DISCRETIONARY—SECTION 5309 NEW STARTS AND BUS

Description: Section 5309 provides funding for major new start transit projects and bus 

purchases. For these purposes, funding is allocated on a discretionary basis. Section 

5309 also provided funding for fixed guideway that is allocated by formula and included in 

the previous funding sources for the RTP/SCS.

The Controller reports the revenues received by SCAG region transit operators. The RTP/

SCS uses the assumption that, on average, operators will continue to receive discretionary funding in rough proportion to what they have received historically. Consistent with 

other federal sources from the HTF, it is assumed that revenues will decline with fuel 

consumption by 1 percent per year.

Actual apportionments are used through FY2012. Starting in FY2013, future allocations 

are estimated by the average apportionment from FY2005 to FY2012 and a 1 percent 

decline in fuel consumption.

Base Year: FY2012.

32 Transportation Finance
Data Source: FTA, FTA Fiscal Years 2006 to 2010 Apportionments, Allocations, and 

Corrections, various years; Controller, Transit Operators and Non-Transit Claimants 

Annual Report, Fiscal Years 1999–00 through 2007–08, Table 1—Statement of Revenues 

and Expenses; 2011 FTIP Programmed Amounts, County Approved Fund Summary, March 

17, 2008; FHWA, Federal Highway Statistics 2008, Table FE-210: Status of the Federal 

Highway Trust Fund 1957–2008.

Real Growth Rate: Negative 3.3 percent annually (nominal growth rate is -0.5 percent).

Revenue Total: $5.3 billion (nominal dollars).

AMERICAN RECOVERY AND REINVESTMENT ACT (ARRA)

Description: Congress passed the American Recovery and Reinvestment Act (ARRA) of 

2009 on February 13, 2009, as a direct response to the economic crisis caused by the 

recession. The Recovery Act was a short-term stimulus intended to spur economic activity, save existing jobs, create new jobs, and invest in long-term growth. ARRA provided 

transportation funding through several different programs: FHWA Highway Infrastructure 

Investment, FTA Transit Capital Assistance, Federal Railroad Administration (FRA) Capital 

Grants to the National Railroad Passenger Corporation, Federal Aviation Administration 

Grants-in-Aid for Airports, FTA Guideway Infrastructure Investment, FRA Capital 

Assistance for High-Speed Rail Corridors, and Office of the Secretary of Transportation 

Supplemental Discretionary Grants.

The financial plan uses actual programmed amounts from the 2011 FTIP. These amounts 

continue only through FY2011, the first year of the RTP planning period. As a result, ARRA 

is a minor funding source for the 2012 RTP.

Base Year: Not Applicable.

Data Sources: 2011 FTIP.

Real Growth Rate: Not applicable.

Revenue Total: Less than $0.1 billion (nominal dollars).

OTHER FEDERAL FUNDS

Description: Includes other federal programs, such as Regional Transportation 

Enhancements, Highway Bridge Replacement and Rehabilitation, Homeland Security 

Grants, Bus Preferential Signal Systems, Highway Earmarks, local assistance, Hazard 

Elimination Safety, and Railroad/Highway Grade Crossing Protection (Section 130).

LACMTA provided forecasted revenues for Los Angeles County. For other counties, 

Highway Bridge Program revenues are estimated in the short term using program allocations provided by Caltrans through FY2014. Longer-term estimates are based upon the 

average of Highway Bridge Program allocations from FY2007 to FY2014 and the 1 percent 

decline in fuel consumption assumption used for other federal funding sources.

Base Year: FY2007 to FY2014.

Data Sources: Caltrans, Division of Local Assistance, 2006/7–2011/12 Highway Bridge 

Program, December 27, 2007; Caltrans, Division of Local Assistance, 2008/9–2013/14 

Highway Bridge Program, November 10, 2010; revenues are also based on financial data 

from transit operators and local county transportation commissions.

Real Growth Rate: Negative 3.3 percent annually (nominal growth rate is -0.5 percent).

Revenue Total: $1.8 billion (nominal dollars).

New Revenue Sources/Innovative Financing

VALUE CAPTURE STRATEGIES

Description: Refers to capturing the incremental value generated by transportation 

investments. A number of techniques are assumed. Assessment districts and community 

facilities districts (CFDs) are longstanding and widely used mechanisms in California to 

fund public infrastructure, including transit and transportation investments. Each has 

unique benefits, voter threshold, and procedural requirements, but both place the funding burden on those that benefit. Assessments districts and CFDs can be used for local 

projects, such as a road improvement, or to fund regional transportation projects, such as 

rail or highway extensions, with the coordination of local agencies and their activities. The 

districts are an area created by the property owners (or, in some instances, registered 

voters for a CFD) within its boundaries for the purposes of funding public improvements. 

Transportation Finance 33
The property owners agree to impose assessments on each parcel that are proportional 

to the benefit created by the public improvements. There are many assessment districts 

currently in existence in the SCAG region—most of which are relatively small and were 

created to fund local streets, water and sewer laterals, and street lighting. There are also 

much larger assessment districts, such as the Los Angeles County Park and Open Space 

District, that impose a countywide assessment. An assessment district or CFD can be 

formed to fund a portion of major highway projects as well. Highway projects produce a 

benefit for residents and businesses along corridors with the reduction of congestion on 

local streets and access improvements to businesses.

The formation of an assessment district requires approval from a majority of the assessments, as opposed to the two-thirds requirement for CFDs. CFDs result in the creation of 

a special tax that can be used to secure bonds or pay for approved capital and operating 

costs. The tax may increase over time and have a term that is longer than the bonds. 

CFDs can be structured to address the characteristics (e.g., number and type of parcels) 

of the district.

Revenue estimates also reflect other opportunities for value capture financing including 

tax increment financing. Cities and counties have had the authority since 1990 to create 

infrastructure financing districts (IFDs) to fund local infrastructure. IFDs divert incremental property tax revenues for 30 years to fund, among other things, highways and transit 

projects. Revenue estimates were based on case study evaluations of past practices 

and current trends. Revenue generation can vary significantly by area due to associated 

economic development potential. Specific capital improvements reviewed include the 

East-West Freight Corridor.

Base Year: Various.

Data Source: LACMTA Benefit Assessment District Program, Los Angeles County 

Assessor’s Office County Parcel Data; SCAG Comprehensive Regional Goods Movement 

Plan and Implementation Strategy, Warehouse and Distribution Study Task 5. 

Real Growth Rate: Not Applicable.

Revenue Total: $1.2 billion (nominal dollars).

BOND PROCEEDS FROM LOCAL SALES TAX MEASURES

Description: Issuance of debt against existing locally imposed 1⁄2 percent sales tax 

revenues for Los Angeles, Orange, Riverside, and San Bernardino Counties. No debt is 

assumed to be issued for Imperial County.

A 30-year term is assumed so long as the final maturity is not later than the expiration 

date of the tax. Interest rates assumed are as follows: Municipal Market Data AAA scale 

plus 0.30 percent (2012 = 0.55 percent, 2041 = 4.01 percent). Costs of issuance are 

estimated at 0.50 percent of par amount plus $250,000, funded from proceeds of the 

bonds. Additionally, bond proceeds cover debt service reserve funds. For annual debt 

service, analysis assumed level aggregate for county; individual bond issues may have 

deferred principal to approximate aggregate level debt service for all debt outstanding.

The forecast also assumes minimum debt service coverage of pledged revenue (net of 

any local return portion) in any year of 2.5x for Los Angeles, 1.3x for Orange, 1.5x for 

Riverside (further restricted to a maximum of $975 million outstanding), and 1.3x for San 

Bernardino, including currently outstanding and new debt.

Base Year: Various.

Data Source: UCLA Anderson Forecast; historical data on revenues reported by the SBOE 

in 1979 through 2010 Annual Reports, Table 21B.

Real Growth Rate: Various.

Revenue Total: $25.6 billion (nominal dollars).

HIGHWAY TOLLS

Description: Toll revenues generated from the SR-710 North Extension, the I-710 South 

Freight Corridor, East-West Freight Corridor, a segment of the High Desert Corridor, and 

Regional Express Lane Network. This revenue category also includes toll revenue bond 

proceeds. A more detailed discussion of toll assumptions for some projects is provided 

below:

 SR-710 North Extension Bond Proceeds. The financing plan assumes that $2.6 

billion of toll revenue bonds are issued for the project, with $2.3 billion in proceeds 

available for construction costs. The financing plan assumes the bonds have an 

average interest rate of 6 percent over 30 years. The annual debt service amounts 

34 Transportation Finance
are essentially level for the first 9 years and then increase in order to provide for 

1.3x debt service thereafter. Interest on the bonds is capitalized from FY2021 

through FY2025.

 SR-710 North Extension Toll Revenue. The financing plan assumes that the project 

will be tolled and that toll revenues will support debt service and operating costs for 

the life of the project. The plan includes a traffic and revenue forecast with annual 

revenue growth of approximately 3.8 percent between FY2021 and FY2030, 2.0 

percent between FY2031 and FY2040, and 1 percent thereafter. 

 I-710 South Freight Corridor Toll Revenue/Bond Proceeds. The financing plan for 

the I-710 Truck Lanes includes a bond issued in FY2021, totaling $3.2 billion in par 

value and provides $2.9 billion in proceeds. The bonds are sized with a 1.3x debt 

service coverage ratio. 

 East-West Freight Corridor Toll Revenues/Bond Proceeds. The financing plan for 

the East-West Freight Corridor includes toll revenue bonds. Toll revenue bonds are 

issued in FY2022, FY2025, and FY2030, totaling $5.5 billion in par amount that 

provides $4.9 billion in proceeds. The bonds are sized with a 1.3x debt service 

coverage ratio. 

 High Desert Corridor Toll Revenues/Bond Proceeds. The amount of toll revenue 

and toll revenue bonds available for the improvements is based upon traffic projections from LACMTA. Traffic is assumed to grow at 4 percent per year. The tolled 

roads are projected to generate a total of $112.2 million in toll revenue in FY2021. 

The toll revenue bonds are secured by the net toll revenues, after payment of 

operating expenses, and local sales tax. The par amount issued is limited by the 

projected net toll revenue and assumed debt service coverage of 130 percent. The 

toll revenue supports the issuance of bonds in FY2015 with a $1.2 billion par value 

that provides $1.0 billion in proceeds.

Base Year: Various—subject to capital project completion.

Data Sources: Reviewed other toll facility data sources including FETCA, Financial 

Statements; SJHTCA, Financial Statements; additional sources include Riverside CountyOrange County Major Investment Study Final Project Report, SR-91 Implementation Plan, 

2011, and LACMTA 2009 Long-Range Transportation Plan.

Real Growth Rate: 0.0 percent to 4.0 percent annually.

Revenue Total: $22.3 billion (nominal dollars); estimate includes anticipated 

bond proceeds.

STATE AND FEDERAL GAS EXCISE TAX ADJUSTMENT 

TO MAINTAIN HISTORICAL PURCHASING POWER

Description: Historical extrapolation of gas tax revenues equivalent to additional 15 

cents-per-gallon gasoline tax imposed by the state and federal governments starting in 

2017. Forecast based on historical trends in adjustments to both state and federal gas 

excise taxes.

Base Year: FY2017.

Data Source: Not applicable.

Real Growth Rate: 0.0 percent annually.

Revenue Total: $16.9 billion (nominal dollars).

FREIGHT FEE/NATIONAL FREIGHT PROGRAM

Description: The National Freight Program as described under the U.S. Senate-proposed 

Moving Ahead for Progress in the 21st Century (MAP-21) would establish a federal formula 

funding program for infrastructure improvements that strengthen the nation’s freight network. It also aims to reduce environmental impacts, improve safety, incorporate technology where applicable, and incorporate federal- and state-level quantifiable performance 

measures.

The program is allocated 5.7 percent of the amount remaining for the various Highway 

Trust Fund formulas, less amounts for congestion mitigation and metropolitan planning. 

Early estimates indicate approximately $2 billion per year, nationally. The regional estimate assumes only a small share of the national program to be conservative.

Other potential mechanisms to fund freight initiatives may include establishment of freight 

fees nationally, whereby rates may be subject to timing of qualified projects such that 

any freight fees would be assessed in proportion to relative impacts on the transportation 

system and would sunset with the completion of projects.

Transportation Finance 35
Base Year: Although MAP-21 identifies a National Freight Program starting in FY2012, 

analysis conservatively estimates resources available starting FY2015.

Data Source: U.S. Senate-proposed transportation reauthorization bill, MAP-21.

Real Growth Rate: Not applicable.

Revenue Total: $4.2 billion (nominal dollars).

PRIVATE EQUITY PARTICIPATION

Description: Local transportation agencies within the SCAG region, including LACMTA, 

RCTC, OCTA, and SANBAG, have been or are currently analyzing alternative project 

delivery options for funding and delivery of their projects, from a public-private partnership (P3) financing using a concession to P3 delivery using availability payments. The 

P3s have the potential to reduce costs or involve private funding, which would reduce the 

need for local funding.

Under a concession delivery model, a transportation agency would award a long-term 

contract to a private firm or consortium of firms to design, build, finance, operate and 

maintain a revenue-generating project (e.g., a tolled road) for a specific term. The benefits of the concession model include life-cycle costing, which transfers operations and 

maintenance cost risks to the private sector and creates incentives for the private sector 

to make tradeoffs between higher upfront capital costs and lower long-term O&M costs. 

Adding the financing element to this model means that in the best case, the transportation agency would not be financially liable for the project and that it would be up to the 

private sector to raise the necessary funds, manage the construction, and assume the 

traffic and revenue risk on the project. The concession may reduce the local agency’s 

local funding requirement because of the private investment.

Private concession models are assumed for the analysis of a number of projects including 

the SR-710 North Extension and the freight corridor system. Development of the highspeed rail system is also anticipated to involve significant private-sector engagement; this 

is discussed under the HSR program funding section.

Under an “availability payment” P3 project structure, the transportation agency would 

contract with a private-sector partner to design, construct, operate, and/or maintain a 

highway for a contracted period of time. Availability payments are often used for highway 

projects not expected to generate adequate revenues to pay for their own construction 

and operation, either because the highway is un-tolled or the tolls are not forecast to generate sufficient income. This requires that the project sponsor have sufficient and credible 

non-toll sources of funding to make all required availability payments. Under availability 

payment structures, the project sponsor generally retains the revenue risk rather than the 

private partner if it were for a tolled highway.

The potential benefit of an availability payment structure is that the payments made by 

the project sponsor could be less than they would be under a traditional project delivery 

approach. If the payments are less, the transportation agency would achieve savings and 

be able to apply the freed-up revenues for other projects. LACMTA is currently evaluating 

the use of an availability payment project delivery for transit projects. 

Financial analysis for the 2012 RTP also assumes that the two Class I freight railroads—

Burlington Northern Santa Fe (BNSF) Railway and the Union Pacific Railroad (UP)—will 

fund their respective capacity and operational initiatives. It is assumed, for example, that 

the UP will invest an estimated $500 million in a modernization project that will increase 

container throughput at the Intermodal Container Transfer Facility (ICTF). Additionally, it is 

assumed that the BNSF will invest approximately $500 million to construct the Southern 

California International Gateway (SCIG), a new near-dock facility adjacent to the San 

Pedro Bay Ports with direct access to the Alameda Corridor. 

Analysis also includes a freight rail investment package including main line rail improvements (rail-to-rail grade separations, double or triple tracking, new signal systems, universal crossovers, new sidings, etc.). The railroads are assumed to fund their respective 

shares of capital improvement costs.

Base Year: Not applicable.

Data Source: Draft business plans as available.

Real Growth Rate: Not applicable.

Revenue Total: $2.7 billion (nominal dollars).

E-COMMERCE TAX

Description: E-commerce sales generally refers to the sale of goods and services where 

an order is placed or where price and terms of the sale are negotiated over an Internet, 

36 Transportation Finance
electronic mail, or other online system. E-commerce sales may also include orders placed 

by phone or mail. Upon making an e-commerce purchase, California law requires that 

residents pay a use tax on the purchase amount, which is equal to the sales tax rate. 

The state estimates that most residents do not report use tax and this resulted in $1.1 

billion in forgone use tax revenue during 2010. The state cannot compel out-of-state 

retailers to pay a sales or use tax, as federal law requires that retailers have a physical 

presence in the state. Many out-of-state retailers have a common corporate presence in 

the state (i.e., work with an entity that is part of a combined corporate reporting group 

that performs services in the state in connection with the retailer) or work with California 

residents that provide referrals (i.e., affiliates) to out-of-state retailers for compensation. 

In its FY2012 budget, the state attempted to compel out-of-state retailers that are part of 

a commonly controlled group or that work with affiliates to pay a use tax (through ABX1 

28). In September 2011, the state repealed ABX1 28 and enacted AB 155, which includes 

many of the same provisions of ABX1 28, but delays implementation until September 

2012.

The Governor’s office estimated that ABX1 28 would have generated $200 million during 

FY2012. Given that AB 155 would implement many of the same provisions as ABX1 28, 

it could generate a pro rata amount of the estimated $200 million in FY2013 and the 

full amount in each year thereafter. However, there are several events that may affect 

the amount the state collects. The provisions of AB 155 may not take effect if federal 

legislation passes that allows states to impose the collection of use taxes on out-of-state 

retailers. Also, in reaction to the tax, one of the most well-known out-of-state retailers, 

Amazon (Amazon.com), stopped working with affiliates and began collecting petitions to 

repeal ABX1 28. After passage of AB 155, Amazon reported that it has stopped collecting 

petitions and will support AB 155, but Amazon is not required to do so.

Notwithstanding the uncertainty in the amount of revenue that is available from AB 155, 

the revenue could be used for transportation purposes, given the relationship between 

e-commerce and the resultant delivery of goods to California purchasers. In the event 

the revenue is used solely for transportation, the revenue would need to be allocated to 

specific uses or areas within the state. One method would allocate the funds in proportion 

to population. Under this method, the SCAG region would receive an estimated $3.1 billion 

through 2035, assuming 3 percent nominal growth rate.

Base Year: FY2013.

Data Source: California Assembly Bill 155, SBOE, Revenue Estimate: Electronic 

Commerce and Mail Order Sales, December 6, 2010; State of California Governor, 

California State Budget 2011–12, Budget Summary, p. 14.

Real Growth Rate: 0.0 percent annually.

Revenue Total: $3.1 billion (nominal dollars).

MILEAGE-BASED USER FEE (OR EQUIVALENT 

FUEL TAX ADJUSTMENT)

Description: Mileage-based user fees would be implemented to replace existing gas 

taxes. Analysis assumed $0.05 (2011$) per mile starting in 2025 and indexed at a rate of 

2.5 percent.

Advancements in technologies enabling greater use of electric or alternative fuel vehicles 

will continue to impact gas tax revenues. The U.S. Energy Information Agency estimates 

that fuel efficiency for all light-duty vehicles will steadily increase, from an average 

weighted MPG of just over 20 in 2008 to nearly 29 in 2030. The fuel efficiency of freight 

trucks also is expected to improve, although at a slower rate, from an average weighted 

MPG of about 6 in 2008 to nearly 7 in 2030. This projection assumes there is not a 

major paradigm shift in vehicle fuel technology, such as affordable electric cars or hybrid 

heavy-duty trucks. It also assumes no shift will occur in public policy or public attitudes 

that encourage people to reduce their long-term travel habits or shift to more efficient 

vehicles more quickly. Given the growing concern about climate protection and fuel price 

volatility, however, such changes are likely, which would lead to a more rapid deterioration in the long-term viability of the current fuel tax. 

SCAG projections indicate that the total number of vehicle miles traveled in the SCAG 

region will increase by about 16 percent by 2035. The National Surface Transportation 

Infrastructure Financing Commission also predicts an increase in VMT nationwide. The 

Financing Commission evaluated a combination of short- and long-term factors, identifying that short-term motor fuel price volatility combined with a weak economy could 

have a considerable negative impact. They indicate that despite a recent national decline 

in VMT, travel growth nationally will resume a trajectory of about 1.5 to 1.8 percent 

per year for the foreseeable future due to factors such as population growth, economic 

growth, and land use patterns. Accordingly, the Financing Commissions’ findings and 

Transportation Finance 37
recommendations indicate that the most viable approach to efficiently fund investments 

in transportation in the medium to long run will be a user charge system based more 

directly on miles driven (and potentially on factors such as time of day, type of road, 

vehicle weight, and fuel economy) rather than indirectly on fuel consumed. Additionally, 

the National Surface Transportation Policy and Revenue Study Commission identified 

consistent findings and recommendations.

Numerous studies in the United States have tested approaches to charging drivers on 

a use basis—including Oregon and the Puget Sound region of Washington State. A 

nationwide survey was conducted by the University of Iowa for the U.S. Department of 

Transportation that focused on equipment for monitoring travel and methods of billing. 

The study involved about 2,700 vehicles in 12 locations. Participants were surveyed 

on their reactions to receiving two types of monthly bills: one providing aggregate data 

only and the other showing detailed information that included routes of travel. The study 

included the installation of on-board systems in six regions across the country (San 

Diego, Baltimore, Austin, Boise, Research Triangle in North Carolina, and eastern Iowa). 

The aim of the study is to design a prototype road pricing system that is reliable, secure, 

flexible, user-friendly, and cost-effective and to assess vehicle operators’ reactions to the 

system. 

For the SCAG region, revenue from mileage-based fees total $148.2 billion from FY2025 

to FY2035. This analysis assumes that mileage-based fees would replace existing state 

and federal gas taxes. As such, the incremental increase in revenue resulting from the 

transition to a more direct mileage-based charge system would generate $110.3 billion, 

from FY2025 to FY2035.

Base Year: FY2025.

Data Source: SCAG travel demand forecast for 2012 RTP.

Real Growth Rate: 0.5 percent annually.

Revenue Total: $110.3 billion (nominal dollars)—estimated incremental revenue only.

INTEREST EARNINGS

Description: Interest earnings are assumed from toll bond proceeds (e.g., East-West 

Freight Corridor). See toll bond revenue assumption for further details on bond proceeds 

and interest earnings. 

Base Year: Not applicable.

Data Source: Not applicable.

Real Growth Rate: Not applicable.

Revenue Total: $0.2 billion (nominal dollars).

STATE BOND PROCEEDS, FEDERAL GRANTS, AND OTHER FOR 

CALIFORNIA HIGH-SPEED RAIL PROGRAM

Description: The 2012 RTP financial plan assumes state general obligation bonds 

authorized under the Bond Act approved by California voters as Proposition 1A in 2008. 

Proposition 1A authorized the state to issue $9.95 billion of general obligation bonds, of 

which $9 billion will be used to develop the high-speed rail system. As per the California 

High-Speed Rail Authority’s recent release of its Draft 2012 Business Plan for the High 

Speed Rail Program, financial assumptions also include the potential use of qualified tax 

credit bonds and private investment. 

Large-scale private-sector involvement in the development and implementation of the 

HSR system is contemplated. The 2012 Business Plan identifies cost containment, risk 

mitigation, and the potential for additional capital as rationale for private-sector participation. Various contractual project delivery options are considered, including concession 

models.

Base Year: FY2016.

Data Source: California High-Speed Rail Program Draft 2012 Business Plan, November 1, 

2011.

Real Growth Rate: Not applicable.

Revenue Total: $33.0 billion (nominal dollars). 

38 Transportation Finance
APPENDIX C: Financial Plan Assessment Checklist

SCAG used the following checklist to ensure that revenues and expenditures in the financial plan were reasonable.

9 Do the RTP, TIP, and FSTIP contain a financial plan that summarizes current and 

future revenue sources?

9 Is the financial plan and supporting information presented and explained in a format 

that can be clearly understood?

9 Is the financial plan made available to the public as part of the public involvement 

process?

9 Has the financial information in the financial plan been coordinated with all of the 

affected agencies (MPOs, state DOT, transit operators, local jurisdictions)?

9 Are the assumptions and data sources for each revenue source (federal, state, local, 

other) clearly documented in the financial plan?

9 Are the approaches for forecasting future revenues documented and defined?

9 Are all revenue figures over consistent timeframes and fiscal years?

9 Are consistent dollar values used and defined?

9 Are the assumptions used for inflation of costs to future nominal dollars clearly 

documented and applied consistently?

9 Does the RTP clearly indicate which revenue sources currently exist and which are 

new?

9 Are the assumptions about the availability of current revenue sources clearly identified by revenue source?

9 Are new revenue sources clearly identified?

9 For new revenue sources, are the strategies to achieve these clearly documented? 

Are the responsible parties for these strategies identified?

9 If new revenue sources are not implemented, are the strategies or risk mitigation 

approaches for how to meet funding shortfalls identified?

9 If innovative financing tools and techniques are used as revenue sources, are these 

clearly identified and documented in the RTP?

9 Are the current and future federal funds included in the financial plan based on 

known or reasonably expected authorization levels?

9 Are anticipated discretionary funds consistent with recent levels of discretionary 

funds actually allocated to the pertinent agencies/jurisdictions?

9 If the RTP includes “illustrative” or “vision elements,” are the revenue sources for 

these clearly separate from the fiscally constrained portion of the plan?

Transportation Finance 39
APPENDIX D: SCAG Regional Financial Model

The SCAG regional financial model consists of two Excel spreadsheets. The first spreadsheet helps SCAG estimate revenues available for transportation capital projects over the 

timeframe of the RTP/SCS (FY2011 to FY2035). The second spreadsheet allows SCAG to 

compare the revenues to expenditures proposed for the 2012 RTP.

The revenue model spreadsheet begins with a compilation of historical data from published sources. SCAG relies on published data because it can be collected and verified 

easily. The model focuses on using revenue data at collection and disbursement levels 

and includes 41 data tables from a variety of local, state, and federal sources.

The historical data in the regional financial model have been expanded considerably since 

the 2008 RTP. Several tables were added and historical data series were extended. For 

example, the state sales tax records have been tracked to 1933–34. The addition of this 

longer-term historical data helped to conduct Monte Carlo sensitivity testing, especially 

in light of the recession and other economic extremes that occurred in the 1930s and 

1970s.

All tables and their sources are shown below.

40 Transportation Finance

Table Source(s)

1: State Sales and Use Tax Collections and Number of Permits, 1933–34 

to 2008–09

California State Board of Equalization, 1933–34 through 2008–09 Annual Reports, Table 18 (or equivalent tables in earlier 

reports).

2: State Sales and Use Tax Statistics by County, 1933–34 to 2008–09 California State Board of Equalization, 1933–34 through 2008–09 Annual Reports, Table 20 (or equivalent tables in earlier 

reports).

3: Revenues Distributed to Counties from County Transportation Tax (i.e., 

TDA Funding), 1972–73 to 2010–11

1) California State Board of Equalization, 1972–73 through 2008–09 Annual Reports, Table 21B.

2) California State Board of Equalization, Local Tax Allocations for 2009–10 and 2010–11.

4: Revenues Distributed to Special Districts from Transactions and Use 

Tax, 1981–82 to 2010–11

1) California State Board of Equalization, 1972–73 through 2008–09 Annual Reports, Table 21C.

2) California State Board of Equalization, Local Tax Allocations for 2009–10 and 2010–11.

5: Total Gas Tax Apportionments to Counties and Constituent Cities, 

1999–00 to 2007–08

California State Controller, Streets and Roads Annual Report, Fiscal Years 1999–00 through 2007–08, Tables 3 and 9—Detailed Statement of Monies Made Available for Street Purposes.

6A: California Total Vehicle Fuel Forecasts, 1980 to 2030 California Department of Transportation, Division of Transportation System Information, 2008 California Motor Vehicle Stock, 

Travel and Fuel Forecast, June 2009.

6B: Taxable Distributions of Diesel Fuel and Gasoline, 1923–24 to 

2008–09

California State Board of Equalization, 2008–09 Annual Report, Tables 24 and 25a.

7A-7B: CTC-Adopted 2006 STIP, 2006–07 to 2010–11 California Transportation Commission, 2006 STIP Staff Recommendations Update Summary, April 27, 2006.

7C-7D: Programmed 2010 STIP, 2010–11 to 2014–15 California Transportation Commission, 2011 Report of STIP Balances County and Interregional Shares, August 4, 2011.

8A-8G: 1998 to 2010 SHOPP Programs, 1998–99 to 2013–14 California Department of Transportation, Approved SHOPP, multiple dates.

9: Proposition 1B Apportionments, 2010–11 to 2013–14 Southern California Association of Governments, Regional Transportation Improvement Program #11-01.

10A: Transit Passenger Fares, 1978–79 to 2007–08 California State Controller, Transit Operators and Non-Transit Claimants Annual Report, Fiscal Years 1978–79 through 

2007–08, Table 1—Statement of Revenues and Expenses.

10B: FTA Section 5307, 1987–88 to 2007–08 California State Controller, Transit Operators and Non-Transit Claimants Annual Report, Fiscal Years 1999–00 through 

2007–08, Table 1—Statement of Revenues and Expenses.
Table Source(s)

10C: Special Demonstration Project, 1987–88 to 2007–08 California State Controller, Transit Operators and Non-Transit Claimants Annual Report, Fiscal Years 1999–00 through 

2007–08, Table 1—Statement of Revenues and Expenses.

10D: Other Financial Assistance, 1987–88 to 2007–08 California State Controller, Transit Operators and Non-Transit Claimants Annual Report, Fiscal Years 1999–00 through 

2007–08, Table 1—Statement of Revenues and Expenses.

10E: FTA Section 5310 and 5311, 1987–88 to 2007–08 California State Controller, Transit Operators and Non-Transit Claimants Annual Report, Fiscal Years 1999–00 through 

2007–08, Table 1—Statement of Revenues and Expenses.

11A-11C: FTA Section 5307, 5309a, and 5309b Allocations, 2005–06 to 

2009–10

Federal Transit Administration, FTA Fiscal Year Apportionments and Allocations, multiple years.

12A-12C: 2008 RTIP 5309c, Demonstration Projects, and Other, 2008–09 

to 2011–12

1) Federal Transit Administration, FTA Fiscal Year Apportionments and Allocations, multiple years.

2) 2008 RTIP Programmed Amounts, County-Approved Fund Summary, March 17, 2008.

13: Orange County Highway Toll Revenues, 1997–98 to 2009–10 1) Transportation Corridor System, Final Traffic and Revenue Report, prepared by Stantec Consulting Inc., April 10, 2008.

2) Foothill/Eastern Transportation Corridor Agency, Financial Statements, June 30, 2006 to 2010.

3) San Joaquin Hills Transportation Corridor Agency, Financial Statements, June 30, 2006 to 2010.

4) 91 Express Lanes Fund, Financial Statements, June 30, 2006 to 2009.

14A: Developer Fees, 1987–88 to 2007–08 California State Controller, Transportation Planning Agencies Annual Report, Fiscal Years 1987–88 through 2007–08, Table 

1—Statement of Revenues for All Fund Types.

14B: Interest Earned by Transportation Planning Agencies, 1987–88 to 

2007–08

California State Controller, Transportation Planning Agencies Annual Report, Fiscal Years 1987–88 through 2007–08, Table 

1—Statement of Revenues for All Fund Types.

14C: State Transit Assistance Funds, 1987–88 to 2010–11 1) California State Controller, Transportation Planning Agencies Annual Report, Fiscal Years 1987–88 through 2007–08, 

Table 1—Statement of Revenues for All Fund Types.

2) California State Controller, Quarterly State Transit Assistance for 2008–09 to 2010–11.

15: Federal CMAQ Apportionments, 1997–98 to 2013–14 California Department of Transportation, CMAQ Apportionments, multiple years.

16: Federal RSTP Apportionments, 1997–98 to 2013–14 California Department of Transportation, RSTP Apportionments, multiple years.

17: Highway Bridge Program Federal Funds 2006–07 to 2013–14 1) California Department of Transportation, Division of Local Assistance, 2006/7–2011/12 Highway Bridge Program, 

12/27/07.

2) California Department of Transportation, Division of Local Assistance, 2008/9–2013/14 Highway Bridge Program, 

11/10/10.

18: Programmed ARRA Funding, 2008–09 to 2010–11 Final 2008 FTIP Programmed ARRA Amounts through Amendment 53.

19: Status of the Federal Highway Trust Fund, 1957 to 2009 Federal Highway Administration, Federal Highway Statistics 2008, Table FE-210: Status of the Federal Highway Trust Fund 

1957-2008. Data exclude the transition quarter that covers July, August, and September 1976.

20: GDP (Chained) Price Index, 1940 to 2010 Office of Management and Budget, Budget of the United States Government, Fiscal Year 2011 Budget (FY11) Transmitted to 

Congress on February 1, 2010, Table 10.1—Gross Domestic Product and Deflators Used in the Historical Tables

21: California County Population Estimates, 1999 to 2009 California Department of Finance, E-2. California County Population Estimates and Components of Change by Year—July 1, 

2000–2009, December 2009.

Transportation Finance 41
The revenue model uses these tables to estimate long-term historical trends. SCAG tries 

to use as much data as possible, but definitions and data availability can vary over time. 

TABLE 10 shows an example of the state sales and use tax statistics used in the model. 

The information in this example comes from the California State Board of Equalization 

Annual Reports.

TABLE 10 State Sales and Use Tax Statistics by County (Taxable Sales of 

All Outlets in Millions of Dollars)

Fiscal 

Year

Imperial

Los 

Angeles

Orange

Riverside

San

Bernardino

Ventura

CA Total

1933–34 $9 $549 $18 $13 $25 $12 $1,325 

1934–35 $16 $922 $34 $24 $38 $18 $2,422 

1935–36 $18 $976 $36 $25 $40 $17 $2,435 

1936–37 $20 $1,235 $43 $30 $47 $19 $2,945 

1937–38 $21 $1,291 $45 $31 $49 $21 $2,889 

1938–39 $21 $1,275 $43 $30 $48 $20 $2,980 

1939–40 $23 $1,390 $43 $30 $48 $20 $3,266 

1940–41 $26 $1,617 $50 $36 $56 $22 $3,660 

1941–42 $22 $1,955 $59 $41 $63 $28 $4,378 

1942–43 $23 $1,893 $62 $51 $81 $29 $4,474 

1943–44 $28 $2,242 $76 $62 $92 $39 $5,195 

1944–45 $31 $2,555 $91 $68 $109 $46 $6,035 

1945–46 $38 $3,192 $119 $93 $143 $53 $7,469 

1946–47 $53 $4,272 $155 $123 $187 $70 $9,879 

1947–48 $61 $4,725 $179 $138 $206 $82 $11,054 

1948–49 $60 $4,771 $180 $139 $211 $90 $11,252 

1949–50 $56 $4,687 $184 $135 $208 $92 $11,043 

1950–51 $63 $5,657 $222 $157 $246 $105 $13,230 

1951–52 $77 $5,797 $240 $174 $275 $114 $13,728 

1952–53 $86 $6,581 $282 $198 $322 $130 $15,126 

Fiscal 

Year

Imperial

Los 

Angeles

Orange

Riverside

San

Bernardino

Ventura

CA Total

1953–54 $78 $6,723 $305 $199 $331 $134 $15,000 

1954–55 $79 $7,428 $370 $228 $371 $144 $16,542 

1955–56 $85 $8,320 $480 $268 $435 $163 $18,750 

1956–57 $84 $8,793 $539 $294 $479 $175 $19,823 

1957–58 $81 $8,472 $577 $302 $506 $179 $19,468 

1958–59 $88 $9,047 $704 $333 $521 $200 $21,343 

1959–60 $94 $9,883 $869 $361 $542 $215 $23,378 

1960–61 $97 $9,741 $932 $356 $545 $229 $23,275 

1961–62 $99 $10,400 $1,073 $391 $597 $260 $24,995 

1962–63 $106 $11,095 $1,264 $449 $672 $293 $26,835 

1963–64 $117 $11,861 $1,458 $513 $768 $342 $29,246 

1964–65 $120 $12,249 $1,613 $552 $812 $376 $30,769 

1965–66 $125 $12,966 $1,750 $583 $846 $383 $33,305 

1966–67 $125 $13,461 $1,880 $581 $849 $397 $34,412 

1967–68 $137 $14,257 $2,212 $660 $950 $450 $36,861 

1968–69 $149 $15,629 $2,616 $760 $1,084 $541 $40,669 

1969–70 $147 $16,167 $2,819 $803 $1,149 $607 $43,263 

1970–71 $156 $16,206 $3,084 $899 $1,236 $650 $44,393 

1971–72 $176 $17,716 $3,593 $1,036 $1,353 $731 $49,527 

1972–73 $219 $20,602 $4,456 $1,237 $1,634 $872 $58,540 

1973–74 $256 $22,350 $4,982 $1,321 $1,759 $949 $64,467 

1974–75 $294 $23,863 $5,402 $1,425 $1,879 $1,072 $70,148 

1975–76 $343 $26,210 $6,386 $1,646 $2,168 $1,251 $78,455 

1976–77 $352 $29,747 $7,840 $2,010 $2,625 $1,433 $91,519 

1977–78 $388 $33,762 $9,310 $2,458 $3,125 $1,681 $105,725 

1978–79 $432 $38,835 $10,825 $2,871 $3,639 $2,050 $121,902 

1979–80 $500 $44,596 $12,287 $3,230 $4,129 $2,344 $138,351 

1980–81 $561 $47,934 $13,437 $3,458 $4,413 $2,571 $149,197 

42 Transportation Finance
Fiscal 

Year

Imperial

Los 

Angeles

Orange

Riverside

San

Bernardino

Ventura

CA Total

1981–82 $579 $49,478 $14,233 $3,607 $4,664 $2,766 $155,124 

1982–83 $479 $48,603 $14,630 $3,766 $4,843 $2,812 $158,435 

1983–84 $527 $54,774 $17,582 $4,612 $5,713 $3,405 $183,573 

1984–85 $605 $60,280 $19,530 $5,192 $6,518 $3,725 $201,498 

1985–86 $571 $62,937 $20,813 $5,649 $7,278 $4,037 $211,830 

1986–87 $607 $66,072 $22,570 $6,369 $8,164 $4,443 $224,225 

1987–88 $749 $70,628 $24,417 $7,102 $9,038 $4,831 $241,300 

1988–89 $839 $75,021 $26,561 $8,222 $10,084 $5,242 $260,352 

1989–90 $886 $80,435 $28,127 $9,353 $11,240 $5,684 $279,923 

1990–91 $927 $77,903 $27,094 $9,179 $11,129 $5,452 $275,173 

1991–92 $968 $75,555 $26,688 $9,138 $11,258 $5,518 $272,654 

1992–93 $1,031 $74,024 $26,586 $9,249 $11,133 $5,484 $271,022 

1993–94 $1,029 $74,277 $27,457 $9,517 $11,414 $5,762 $277,539 

1994–95 $1,013 $78,571 $29,268 $10,088 $12,206 $6,148 $293,066 

1995–96 $1,018 $80,843 $31,159 $10,088 $12,865 $6,417 $312,164 

1996–97 $1,003 $84,192 $33,585 $11,460 $13,527 $6,734 $328,788 

1997–98 $1,095 $88,309 $36,081 $12,502 $14,371 $7,254 $350,171 

1998–99 $1,147 $93,052 $38,437 $14,032 $15,853 $7,841 $372,994 

1999–00 $1,416 $102,743 $42,554 $16,132 $17,886 $8,775 $420,352 

2000–01 $1,364 $107,571 $45,058 $17,586 $19,376 $9,334 $447,477 

2001–02 $1,411 $107,238 $44,208 $18,775 $20,051 $9,628 $436,998 

2002–03 $1,490 $110,993 $45,908 $20,434 $21,753 $10,032 $447,906 

2003–04 $1,602 $118,042 $49,757 $23,425 $24,120 $10,819 $480,065 

2004–05 $1,831 $126,061 $53,101 $26,646 $27,891 $11,486 $515,298 

2005–06 $2,116 $134,350 $56,396 $29,646 $31,212 $12,211 $553,520 

2006–07 $2,159 $137,934 $57,900 $29,699 $31,110 $12,471 $564,837 

2007–08 $2,255 $136,815 $56,234 $27,729 $29,459 $11,796 $552,895 

2008–09 $1,971 $120,032 $48,509 $23,468 $25,085 $10,387 $484,424 

The next section of the model collects information from the county transportation commission (CTC) forecasts. Each CTC in the SCAG region prepares a financial forecast relevant to the economic conditions, financial funding sources, and legal requirements in its 

county. The level of detail varies according to what is historically important to the county. 

For example, LACMTA has historically relied on revenue bonds to ensure that funds are 

available when needed for transportation projects. The estimation of debt service is very 

important for the LACMTA financial model. Several other counties recently passed or 

extended sales tax measures, so their focus is estimating future sales tax revenues.

The SCAG revenue model takes the most recent CTC financial forecasts available and 

places them into standardized revenue categories. The SCAG model includes the following 

revenue categories:

Local Sources

1. Local Option Sales Tax Measures

2. Local Transportation Fund from Transportation Development Act

3. Gas Excise Tax Subventions

4. Farebox Revenues

5. Highway Tolls

6. Mitigation Fees

7. Local Agency Funds

State Sources

1. State Transportation Improvement Program (STIP)

a. Regional Improvement Program (RIP)

b. Interregional Improvement Program (IIP)

2. State Highway Operation and Protection Program (SHOPP)

3. State Gasoline Sales Tax Swap

4. State Transit Assistance Fund (half of the Public Transportation Account)

5. Highway Safety, Traffic, Air Quality, and Port Fund (Proposition 1B)

6. Other State Funds

Transportation Finance 43
Federal Sources

1. Congestion Mitigation Air Quality (CMAQ) Program

2. Regional Surface Transportation Program (RSTP)

3. FTA Formula (5307, 5310, 5311, 5309a Fixed Guideway)

4. FTA Discretionary (5309b New Starts, 5309c Bus)

5. Other Federal Funds (e.g., Highway Bridge Program)

6. American Recovery and Reinvestment Act (ARRA)

The model also includes several tables that show how CTC revenue estimates are grouped 

into the standardized regional categories. TABLE 11 shows an example for Orange County. 

In addition to grouping the revenue sources by standard category, the SCAG model also 

makes sure that costs are estimated in the same “dollars” and treat inflation consistently. 

The SCAG revenue model is capable of estimating revenues in any set of constant dollars 

or nominal dollars (year of expenditure). The default is 2010 constant dollars, although 

the 2012 RTP reports revenue estimates in nominal dollars as required by USDOT. 

TABLE 11 Orange County Transportation Authority (OCTA) 

(Nominal Dollars)

Revenue Source (in order provided) Modal 

Category

Local

ST-CASH - STATE CASH 7

S-PARK - STATE PARK FUNDS 7

Gas Tax Subventions exchange (transit) 3

ORA-TRN - ORANGE M - TRANSIT 1

ORAM2TR - ORANGE CO. MEASURE M2 - TRANSIT 1

TDA4 - TDA ARTICLE #4 (1) 2

TDA - TDA (14) 2

FARE REVENUE 4

Stationlink 7

Advertising 7

Revenue Source (in order provided) Modal 

Category

Fare Stab 7

Interest 7

Misc. 7

Alt. Fuel Tax 7

GEN - GENERAL FUNDS - City MOE (7) 7

Gen - GENERAL FUNDS - NON MOE 7

DEV FEE - DEVELOPER FEES (5) 6

M2 Environmental Cleanup 1

M2 Taxpyr & Audits 1

M2 SBOE Fees 1

P-TAX - PROPERTY TAX (3) 7

Toll revenues (12) 5

Non-toll revenue (13) 7

ORAFWY2 - ORANGE M2 - FREEWAY 1

ORA-FWY - ORANGE M - FREEWAY 1

Service Authority for Freeways and Expressways (SAFE) 7

Gas Tax Subventions (local arterials) 3

ORA-PAH - ORANGE M - MPAH (Local streets and roads) 1

ORA-RIP - ORANGE M - REG I/C (Regional streets and roads) 1

TDA3 - TDA ARTICLE #3 2

ORAM2RC - ORANGE CO. MEASURE M2 - Roadways 1

State

P116 - PROP 116 6

PTMISEA - PUBLIC TRANS MODERNIZATION IMP AND SERV. ENHANCEMENT ACCT. 

(Prop 1B) 5

TSSSDRA - TRANSIT SYSTEM SAFETY, SECURITY AND DISASTER RESPONSE ACCOUNT 5

STAF 4

Prop 1A High-Speed Rail (11) 3

STIP - RIP (PTA + TIF) (4) 1a

44 Transportation Finance
Revenue Source (in order provided) Modal 

Category

SLP - STATE LOCAL PARTNER (Prop 1B) 5

TCIF - TRADE CORRIDOR PROGRAM (Prop 1B) 5

STIP - IIP (PTA + TIF) 1b

SHOPPAC - SHOPP - ADVANCE CONSTRUCTION (9) 2

STCASHS - STATE CASH - SHOPP (9) 2

LBSRA - LOCAL BRIDGE SEISMIC RETROFIT ACCOUNT (1) 6

HRCSA - HIGHWAY-RAILROAD CROSSING SAFETY ACCOUNT (Prop 1B) 6

TLSP - TRAFFIC LIGHT SYNCHRONIZATION PROGRAM (Prop 1B) 6

Prop 42 subventions (County and City) 3

Federal

5307 - FTA 5307 UZA FORMULAR 3

5309a - FTA 5309(a) GUIDEWAY (6) 3

5309c - FTA 5309(c) BUS (6) 4

5310 - FTA 5310 ELD AND DISABI 3

5316 - FTA 5316 JOB ACCESS PROGRAM 3

5317 - FTA 5317 NEW FREEDOM PROGRAM 3

AR-5307 - ARRA - FTA 5307 6

AR-5309 - ARRA - FTA 5309 6

FTA New Starts (project S) 4

FRA08 - FFY 2008 Administration Earmark (1) 4

FRA09 - FFY 2009 Administration Earmark (1) 4

1112 - RECREATIONAL TRAILS (1) 5

2006EAR - FFY 2006 APPROPRIATIONS EARMARKS (1) 4

ARRA-TE - ARRA - TRANSPORATION ENHAN 6

HBRR-L - BRIDGE - LOCAL (1) 5

STPE-R - STP ENHANCE-RIP TEA (TE) 5

STPE-I - STP ENHANCE-IIP TEA 5

ARRA-SH - ARRA - SHOPP (1) 6

ARRA-HM - ARRA - HIGHWAY MAINTENANCE (HM) (1) 6

CMIA - CORRIDOR MOBILITY PROGRAM (Prop 1B) State 5

Revenue Source (in order provided) Modal 

Category

DEMISTE - DEMO - ISTEA (1) 4

ARRRSTP - ARRA - REGIONAL SURFACE TRANSPORTATION PROGRAM 6

CMAQ - CMAQ (Congestion Mitigation and Air Quality Improvement Program) 1

DEMOSTL - DEMO-SAFETEA-LU (1) 4

EDA - EDA GRANT (1) 4

STPL-R - STP LOCAL - REGIONAL (Regional Surface Transportation Program (RSTP)) 2

Source: 2010 LRTP Forecast for SCAG, August 25, 2010

The SCAG model uses several economic assumptions to forecast future revenues. The 

most important assumptions are:

 Growth in retail sales for each county

 Changes in fuel consumption

 Increases in farebox revenues for major operators and transit agencies in general

 Changes in toll revenues for the Transportation Corridor Agencies (TCA) in 

Orange County

 Collection of mitigation fees

 Status of the Federal Highway Trust Fund

 Changes in CMAQ funding due to air quality attainment

 Percentage of local roads that are regionally significant

 Annual inflation for converting revenues to nominal dollars

Transportation Finance 45
The assumptions are based on the published historical data. Values are adjusted to 

ensure consistency with the county transportation commission forecasts and across the 

region. As an example, TABLE 12 shows a subset of the model assumptions for retail sales 

growth and fuel consumption. The historical data show that retail sales growth has been 

slowest in the Los Angeles urban core, while faster growth has been occurring in the 

Inland Empire. The historical growth rates are for the last 30 years and reflect the drop 

in sales tax revenues due to the recession. In fact, the 30-year averages are lower than 

the ones reported in the 2008 RTP due to the recent economic downturn appearing in the 

historical data.

The county transportation commissions have provided retail sales forecasts for the 

future, which are used in the regional model. For example, LACMTA expects retail sales to 

grow faster during the early years of the RTP planning period as the region recovers from 

the Great Recession. This growth rate is expected to taper, with slower growth occurring 

in Los Angeles County than in the Inland Empire in the later years of the forecast. Retail 

sales growth is expected to be slow in Orange County, although still higher than in Los 

Angeles, consistent with historical trends. In the case of Imperial County, no retail sales 

forecasts are available, so sales are expected to grow consistent with historical trends.

TABLE 12 also shows the expected growth in fuel consumption. SCAG expects that fuel 

consumption will be impacted by a number of changes anticipated over the next several 

decades, including changes in vehicle miles traveled, changes in vehicle fuel economy 

(due to new CAFE standards), and the adoption of alternative fuel vehicles. The SCAG 

revenue model assumes that these changes cause fuel consumption to drop by 1 percent 

annually over the period of the RTP/SCS—a more conservative assumption than historical trends would suggest. These two examples illustrate how published data are used to 

supplement and validate the forecasts in the regional revenue model. The sensitivity of 

the forecasts to these assumptions was tested through Monte Carlo simulation.

TABLE 12 Revenue Model Assumptions

Assumption Used in Model Source/Other Information

ANNUAL GROWTH RATES

Retail Sales

Imperial 1.9% Table 2 (State Sales and Use Tax Statistics by County)

Los Angeles

3.9% Table 2; Percentage to match 2009 LRTP Technical 

Document

1.7% Table 2; Percentage to match 2009 LRTP Technical 

Document

1.2% Table 2; Percentage to match 2009 LRTP Technical 

Document

Orange 1.7% Table 2; Percentage to match 2010 OCTA LRTP forecast

Riverside 1.6% Table 2; Percentage to match 2010 Measure A forecast

San Bernardino 2.3% Table 2; Percentage to match 2010 SANBAG Measure I 

growth forecasts

Ventura 2.3% Table 2

Statewide 1.5% Table 2

Fuel Consumption -1.0% Table 6B (Taxable Distributions of Diesel Fuel and 

Gasoline)

46 Transportation Finance
The regional model generates forecasts of annual revenues by source for each of 

the counties in the SCAG region through FY2035. TABLE 13 shows an example for the 

California State Transit Assistance Fund, which is equal in revenues to half of the state’s 

Public Transportation Account.

TABLE 13 State Transit Assistance Fund (in Millions of Dollars)

Fiscal Year

Imperial

Los 

Angeles

Orange

Riverside

San

Bernardino

Ventura

Total

2004–05 $0 $34 $7 $3 $4 $1 $49

2005–06 $0 $62 $12 $6 $6 $2 $89

2006–07 $1 $191 $37 $19 $20 $7 $275

2007–08 $1 $61 $17 $10 $6 $3 $99

2008–09 $0 $44 $9 $5 $5 $2 $65

2009–10 $0 $59 $12 $6 $7 $2 $86

2010–11 $0 $60 $12 $7 $7 $2 $89

2011–12 $0 $61 $12 $7 $7 $3 $90

2012–13 $0 $63 $13 $7 $7 $3 $92

2013–14 $1 $64 $13 $7 $7 $3 $94

2014–15 $1 $65 $13 $7 $7 $3 $95

2015–16 $1 $66 $13 $7 $7 $3 $97

2016–17 $1 $67 $14 $7 $8 $3 $99

2017–18 $1 $69 $14 $7 $8 $3 $101

2018–19 $1 $70 $14 $8 $8 $3 $103

2019–20 $1 $71 $14 $8 $8 $3 $105

2020–21 $1 $73 $15 $8 $8 $3 $107

Fiscal Year

Imperial

Los 

Angeles

Orange

Riverside

San

Bernardino

Ventura

Total

2021–22 $1 $74 $15 $8 $8 $3 $109

2022–23 $1 $75 $15 $8 $8 $3 $111

2023–24 $1 $77 $15 $8 $9 $3 $113

2024–25 $1 $78 $16 $9 $9 $3 $115

2025–26 $1 $80 $16 $9 $9 $3 $117

2026–27 $1 $81 $16 $9 $9 $3 $119

2027–28 $1 $83 $17 $9 $9 $3 $121

2028–29 $1 $84 $17 $9 $9 $3 $124

2029–30 $1 $86 $17 $9 $10 $4 $126

2030–31 $1 $87 $18 $10 $10 $4 $128

2031–32 $1 $89 $18 $10 $10 $4 $131

2032–33 $1 $91 $18 $10 $10 $4 $133

2033–34 $1 $92 $19 $10 $10 $4 $136

2034–35 $1 $94 $19 $10 $11 $4 $138

2035–36 $1 $96 $19 $10 $11 $4 $141

2036–37 $1 $98 $20 $11 $11 $4 $144

2037–38 $1 $99 $20 $11 $11 $4 $146

2038–39 $1 $101 $20 $11 $11 $4 $149

2039–40 $1 $103 $21 $11 $12 $4 $152

Transportation Finance 47
48 Transportation Finance

APPENDIX E: Implementation Plan for 

Reasonably Available Revenue Sources

In developing the 2012–2035 RTP/SCS, SCAG held a number of meetings with the RTP 

Subcommittee, Transportation Committee, and the Regional Council, to discuss the 

institutional and policy context for pursuing reasonably available funding sources. SCAG’s 

Policy Committees identified the need to pursue new, reasonably available sources of 

funding for transportation—providing that mechanisms are in place to ensure local control. Specifically, the following adopted set of key guiding principles form the basis for the 

RTP/SCS financial strategies:

 Establish a user-based system that better reflects the true cost of transportation, 

provides firewall protection for transportation funds, and ensures an equitable distribution of costs and benefits.

 Promote national and state programs that include return-to-source guarantees while 

maintaining flexibility to reward regions that continue to commit substantial local 

resources.

 Leverage locally available funding with innovative financing tools (e.g., tax credits 

and expansion of TIFIA) to attract private capital and to accelerate project delivery.

 Promote funding strategies that strengthen federal commitment to the nation’s 

goods movement system, recognizing the pivotal role that our region plays in 

domestic and international trade. 

Further, recognizing that many of the financial strategies identified require additional 

planning and legislative steps toward implementation, the following section highlights 

some requisite actions and key milestones for implementing new funding sources identified as a part of the financially constrained RTP/SCS.

Value Capture Strategies

Value capture strategies refer to capturing the incremental value generated by transportation investments. A number of techniques can be utilized to capture this enhanced value 

including the formation of special districts, such as benefit assessment districts. Benefit 

assessments are fees on properties used to pay for the cost of capital improvements. 

Charges are assessed on those properties that benefit from the capital improvements 

being financed. A benefit of certain special districts is that the boundaries can be drawn 

across local jurisdictional lines or within well-defined or targeted areas. 

Special assessments are subject to Proposition 218, which establishes a common formation and ratification procedure that local jurisdictions would need to pursue as outlined 

below. To further pursue this strategy, SCAG would need to work with local/regional 

stakeholders to pursue the following course of actions.

1. Conduct feasibility analysis/engineering report with rates, proposed district boundaries, methodology, and rationale for assessments

2. Polling/Public Awareness Surveys

3. Hold public hearing and receive approval from a majority of affected property owners casting ballot (by FY2020–FY2021) 

The formation of a Mello-Roos Community Facilities District presents another type of 

special district financing opportunity. A special district of this type allows a developer or 

group of property owners to self-impose a special tax, collected on the property tax roll, 

to finance a variety of public improvements. Mello-Roos CFDs require two-thirds approval 

of those voting. There may be a landowner election or a registered voter election, depending on whether there are 12 or more registered voters within the proposed Mello-Roos 

district (§53326(b)).

Assessment districts and community facilities districts (CFDs) are long-standing and 

widely-used mechanisms in California to fund public infrastructure, including transportation investments. Each has unique benefits, voter threshold, and procedural requirements, 

but both place the funding burden on those who benefit. Assessments districts and CFDs 

can be used for local projects, such as a road improvement, or fund regional transportation projects, such as rail or highway extensions. 
Transportation Finance 49

The districts are an area created by the property owners (or, in some instances, registered voters for a CFD) within its boundaries for the purposes of funding public improvements. The property owners agree to impose assessments on each parcel that are 

proportional to the benefit created by the public improvements. There are many assessment districts currently in existence in the SCAG region—most of which are relatively 

small and were created to fund local streets, water and sewer laterals, and street lighting. 

There are also much larger assessment districts, such as the Los Angeles County parks 

and open space district that imposes a countywide assessment. It is conceivable that an 

assessment district or CFD can be formed to fund a portion of major highway projects in 

the RTP/SCS. These projects produce a benefit for residents and business along the corridor as it reduces congestion on local streets and improves access to business. 

The formation of an assessment district requires approval from a majority of the assessments, as opposed to the two-thirds requirement for any new tax, including CFDs, local 

general obligation bond tax (excluding schools), or transportation sales tax. CFDs result in 

the creation of a special tax that can be used to secure bonds or pay for approved capital 

and operating costs. The tax may increase over time and have a term that is longer than 

the bonds. 

Often utilized by redevelopment agencies for community improvement projects, tax increment financing can be a critical financing tool to support transportation investment strategies as well. Tax increment establishes a base-year tax level for a project area. Taxes 

generated above this base-year amount through increases in property values are targeted 

for improvements/services within the project area. Outside of redevelopment areas, local 

jurisdictions can establish infrastructure financing districts to use property tax increment 

financing to pay for public works (Government Code §53395, et seq). To further pursue 

this strategy, SCAG and its local jurisdiction stakeholders would need to adhere to the 

following requisite procedures for establishing IFDs by FY2020–FY2021:

1. Resolution of intention to establish district (§53395.11)

2. Continue to develop Infrastructure financing plan (§53395.14–53395.16)

3. Hold public hearing (§53395.12)

4. Formation of district elections (§53395.20)

 Tax increment bonds (§53397.1–53397.9)

 Two-third vote needed for issuance (§53397.6)

 Adopt resolution per majority vote

Highway Tolls

With diminishing traditional state and federal funding, the 2012–2035 RTP/SCS identifies toll road financing as a mechanism to support transportation investments. Within the 

time horizon of the 2012–2035 RTP/SCS, a number of toll road facilities are expected 

to be implemented, including, for example, SR-710 North Extension, I-710 South Freight 

Corridor, and East-West Freight Corridor. Additionally, the 2012–2035 RTP/SCS identifies 

a regional network of Express/HOT Lanes. 

The financing of toll road facilities has become sophisticated in recent years, with 

increasing levels of participation by the private sector. SCAG is fully aware of the need 

to carefully consider the economics of specific projects as there is not a “one size fits 

all” solution. Various toll road financing models are being evaluated including public and 

private concessions, shadows tolls, and direct user-paid tolls. For purposes of developing 

the RTP/SCS financial plan, projections of traffic and revenue generation potential were 

based on a review of toll feasibility studies and consideration of comparable facilities. 

Revenue potential from tolling facilities depends on several factors including length of 

lanes, configuration of the facilities, and tolling policies. SCAG continues to evaluate traffic and revenue projections for toll facilities/priced lanes identified in the 2012–2035 RTP/

SCS. Efforts to date have included allocation of resources to collect data to better understand the behavioral response of travelers. SCAG recently conducted stated-preference 

surveys as part of the Express Travel Choices study. The purpose of the stated-preference 

survey was to estimate toll sensitivity, or the value of time (VOT), in the region as well 

as travelers’ elasticities in shifting mode, route, time of day, and destination. The survey 

also sought to estimate the levels of trip reduction that could result from various pricing 

strategies. Additionally, SCAG continues to evaluate the legal framework under which the 

region’s proposed projects can move forward. Since the adoption of the 2008 RTP, tolling 

and express lane provisions have progressed considerably. Specific to LACMTA’s existing 

state enabling authority for tolling, SB 1422 (Ridley-Thomas) was enacted on September 

28, 2008, providing LACMTA with legal authority to implement the ExpressLanes projects’ congestion pricing component by adding Section 149.9 to the California Streets and 

Highways Code. Two years later, on September 29, 2010, AB 1224 (Eng) was enacted, 

which extends LACMTA’s tolling authority until January 2015.

In October 2009, the Governor signed AB 798 establishing the California Transportation 

Financing Authority (CTFA). The CTFA may grant tolling authority to Caltrans or to any 
50 Transportation Finance

regional transportation agency so long as certain conditions are met. AB 798 also lifts the 

requirement for the HOT lane projects authorized under AB1467 (such as I-10 and I-110 

ExpressLanes) to have separate legislative approval. These changes will significantly 

increase the potential use of tolling as a financing and traffic management tool in the 

State. The following general actions/steps highlight some key implementation procedures 

for tolling anticipated in the region:

1. Continue ongoing feasibility and/or environmental review process necessary for proposed toll facilities (e.g., SR-710 North Extension, I-710 Freight Corridor, East-West 

Freight Corridor)

2. Conduct Express Travel Choices Phase II with regional stakeholders grant awarded 

under federal Value Pricing Pilot Program (VPPP) to develop regional concept of 

operations/implementation plan for regional Express/HOT network

3. Continue traffic and revenue studies for specific facilities

4. Continue to refine business plans outlining institutional arrangement and financial 

plan—LACMTA is currently developing business plans for potential P3s and/or toll 

initiatives

5. Pursue toll authorization for specific facilities as may be applicable—includes federal tolling authority through VPPP for interstate highways as may be necessary and 

state authorization

6. Anticipated project implementation dates vary for facilities throughout the region—

as early as 2013 for initial demonstration of specific facilities to 2035 for full deployment and operation across the region

Private Equity Participation

Recent toll road financing experience in the U.S. (e.g., Indiana Toll Road and the Chicago 

Skyway) represents significant change from past practices. With private ownership of toll 

facilities, equity considerations have been introduced to facilitate financing. Debt levels 

under these private transactions tend to be significantly higher and repayment schedules 

often extend beyond the traditional 20–30 year period. These transactions often rely 

heavily on refinancing. Also, concession terms are considerably longer (75–99 years) 

than they have been under typical concession financing in the past. 

These project finance models have generally been applicable to existing toll facilities with 

strong cash flow generation. In this context, SCAG continues to evaluate various business 

models appropriate for new facilities or start-up facilities. As stated under the highway 

tolls discussion, numerous legislative initiatives over the past several years, have established enabling authority for the region to consider private equity strategies as a part of 

the RTP/SCS. Additional work related to business plan development and feasibility analyses (traffic and revenue studies) are currently underway. As specific projects progress 

beyond environmental review, further work would entail continued refinement of project 

specific business plans and coordination with the California Transportation Financing 

Authority as well as the California Transportation Commission as may be applicable. 

Bond Proceeds from Local Sales Tax Measures

The 2012–2035 RTP/SCS financial plan also assumes the issuance of long-term debt 

against existing local sales tax measure revenues. This is assumed for Los Angeles, 

Orange, Riverside, and San Bernardino Counties. Issuance of debt is subject to each 

county transportation commission’s board policies. No additional enabling authority is 

needed. However, efforts are underway by regional partners to pursue legislative revisions that would allow for expanded access to lower-cost and more flexible direct loan 

and credit programs.

State Bond Proceeds, Federal Grants & Other for California 

High Speed Rail Program

Funding for the California High-Speed Rail project is documented in their 2012 Business 

Plan. Identified funding includes state general obligation bonds authorized under the Bond 

Act approved by California voters as Proposition 1A in 2008; federal grants authorized 

under the American Recovery and Reinvestment Act, and High Speed Intercity Passenger 

Rail Program. Potential use of qualified tax credit bonds and private sources are also 

considered in the business plan. A final business plan is anticipated to be released before 

the end of FY2011–FY2012.
Transportation Finance 51

E-Commerce Tax

E-commerce sales generally refers to the sale of goods and services where an order is 

placed, or price and terms of the sale are negotiated over an Internet, electronic mail or 

other online system. E-commerce sales may also include orders placed by phone or mail. 

Upon making an e-commerce purchase, California law requires that residents pay a use 

tax on the purchase amount, which is equal to the sales tax rate. The state estimates that 

most residents do not report use tax and this resulted in $1.1 billion in forgone use tax 

revenue during 2010. The state cannot compel out-of-state retailers to pay a sales or use 

tax, as federal law requires that retailers have a physical presence in the state. Many outof-state retailers have a common corporate presence in the state (i.e., work with an entity 

that is part of a combined corporate reporting group that performs services in the state 

in connection with the retailer) or work with California residents that provide referrals 

(i.e., affiliates) to out-of-state retailers for compensation. In its FY2012 budget, the state 

attempted to compel out-of-state retailers that are part of a commonly controlled group 

or work with affiliates to pay a use tax (through ABX1 28). In September 2011, the state 

repealed ABX1 28 and enacted AB 155, which includes many of the same provisions of 

ABX1 28, but delays implementation until September 2012.

The Governor’s office estimated that ABX1 28 would have generated $200 million during 

FY2012. Given that AB 155 would implement much of the same provisions as ABX1 28, 

it could generate a pro rata amount of the estimated $200 million in FY2013 and the 

full amount in each year thereafter. However, there are several events that may affect 

the amount the state collects. The provisions of AB 155 may not take effect if federal 

legislation passes that allows states to impose the collection of use taxes on out-of-state 

retailers. Also, in reaction to the tax, one of the most well-known out-of-state retailers, 

Amazon, stopped working with affiliates and began collecting petitions to repeal ABX1 

28. As part of passage AB 155, Amazon reports that it has stopped collecting petitions 

and will support AB 155, but Amazon is not required to do so.

Notwithstanding the uncertainty in the amount of revenue that is available from AB 155, 

the revenue could be used for transportation purposes, given the relationship between 

e-commerce and the resultant delivery of goods to California purchasers. Actions to 

realize this revenue would entail working with the Governor, the State Legislature, and 

potentially Congress. 

National Freight Fees/Freight Program

Substantial investment is needed to provide the infrastructure to carry goods to and 

through Southern California safely, quickly, and efficiently. Although strategies to identify 

funding sources have focused on user or beneficiary fees to support infrastructure investment and mitigation needs, analysis to date indicates the importance of implementing 

such a strategy at the national level. The following general actions/steps highlight some 

key implementation procedures:

1. Continue to work with goods movement stakeholders to evaluate potential revenue strategies for specific projects—work is currently underway with SCAG’s 

Comprehensive Regional Goods Movement Plan and Implementation Study

2. Continue to work with regional partners in pursuing efforts to secure federal funding 

program for our freight system

3. Continue working with Congressional Delegation to support the establishment of a 

National Freight Program (consistent with the Senate-proposed MAP-21), emphasizing high priority needs in the system such as the Southern California Goods 

Movement System

State and Federal Gasoline Excise Tax Adjustment

A critical component of the 2012–2035 RTP/SCS financial plan includes an adjustment to 

the state and federal gasoline excise taxes to maintain historical purchasing power. The 

adjustment is equivalent to an additional fifteen cents-per-gallon excise tax at both the 

state and federal levels starting in 2017. Historical tax rate adjustments provide the basis 

for this assumption. The current state gasoline excise tax was last increased over a fiveyear window period from 1990 through 1994, when it was doubled from 9 to 18 centsper-gallon as shown in TABLE 14. The current federal gasoline excise tax was last adjusted 

from 9 to 18.4 cents-per-gallon over a five-year period as well (TABLE 15). Historical 

extrapolation provides the basis for adjustments within the time horizon of the RTP/SCS.

Consistent with the recommendations provided by the two national commissions established by Congress, SCAG’s policy committees have concluded that the best near- to 

mid-term options for both state and federal resources are increases to current fuel taxes 

through conventional mechanisms. Since 2008, Congress has authorized $34.5 billion 

in transfers from the General Fund to the Federal Highway Trust Fund (HTF), in part to 
52 Transportation Finance

provide revenues that would have otherwise been achieved with a gas tax increase. Given 

the state of transportation funding today, it is critical to consider increases in fuel taxes 

to ensure the integrity of the system. Some key requisite actions over the next few years 

to realize this revenue strategy in the 2017–2024 timeframe are as follows:

1. Immediately incorporate the 2012–2035 RTP/SCS fuel tax and/or transportation 

funding stabilization recommendations into SCAG’s legislative program

2. Work to implement a legislative strategy of consensus building with partner transportation agencies to communicate recommendations and coordinate as appropriate 

with the State Legislature and Congressional Delegation

3. Advance legislative proposals that would address stabilizing both the State Highway 

Account (SHA) and the HTF as identified in the 2012–2035 RTP/SCS

TABLE 14 State Gasoline Excise Tax

Effective Date Tax Rate (cents-per-gallon)

October 1, 1923 2.0

July 29, 1927 3.0

July 1, 1947 4.5

July 1, 1953 6.0

October 1, 1963 7.0

January 1, 1983 9.0

August 1, 1990 14.0

January 1, 1991 15.0

January 1, 1992 16.0

January 1, 1993 17.0

January 1, 1994 18.0

Source: State Board of Equalization

TABLE 15 Federal Gasoline Excise Tax

Effective Date Tax Rate (cents-per-gallon)

June 21, 1932 1.0

June 17, 1933 1.5

January 1, 1934 1.0

July 1, 1940 1.5

November 1, 1951 2.0

July 1, 1956 3.0

October 1, 1959 4.0

April 1, 1983 9.0

January 1, 1987 9.1

September 1, 1990 9.0

December 1, 1990 14.1

October 1, 1993 18.4

January 1, 1996 18.3

October 1, 1997 18.4

Source: FHWA Federal Tax Rates
Transportation Finance 53

Mileage-Based User Fee

The 2012–2035 RTP/SCS financial plan strategies assume the transition from the current transportation funding model based on fuel taxes to a new mileage-based user fee 

system. Mileage-based user fees would be implemented to replace existing fuel taxes and 

applicable to all roads and types of vehicles. SCAG’s analysis assumes $0.05 (in 2011 

dollars) per mile starting in 2025 and indexed through the RTP/SCS horizon year of 2035. 

In recognizing the importance of establishing critical pathways to implementation, SCAG 

identifies the following requisite actions related to research, development, demonstration 

(RD&D), and eventual broad deployment of a mileage-based user fee system—to replace 

the current fuel tax mechanisms at both the state and federal levels.

1. Finalize current SCAG regional congestion pricing study, Express Travel Choice 

Phase I—this study evaluates a number of options for congestion management and 

revenue stabilization, including mileage-based user fees

2. Establish a core working group of business and other key parties to conduct 

RD&D—this would include public education initiatives

3. Evaluate and demonstrate mileage-based user fee concept of operations addressing 

key implementation factors such as:

a. Technology and associated privacy issues

b. Cost of implementation and administrative methods for fee collection/revenue 

allocation

c. Equity concerns and exemptions/credits, as applicable

d. Rate structures and associated impacts including evaluation of flat rates, differential pricing by type of vehicle including size and weight, time-of-day, and 

potentially emissions, including greenhouse gas emissions

e. Economic assessment

4. Apply lessons-learned from demonstrations and evaluations of mileage-based fees 

to inform the State Legislature and Congress about the unique characteristics of 

Southern California and help tailor state and federal programs to meet the needs of 

the SCAG region

5. Evaluate the impacts of the mileage-based user fee system on existing local transportation funding mechanisms, including toll facilities and sales tax measures—and 

consider how best to integrate the various transportation funding mechanisms

6. Consider how best to develop mileage-based user fee systems to address system 

preservation needs

7. Work with state, federal, and local partners to include provisions in upcoming 

reauthorization(s) to develop a national roadmap for transitioning to a mileage-based 

user fee system

8. Work with other MPOs and transportation stakeholders in California to develop a 

statewide initiative to stabilize and secure transportation funding
REGIONAL OFFICES

Imperial County

1405 North Imperial Avenue

Suite 1 

El Centro, CA 92243 

Phone: (760) 353-7800 

Fax: (760) 353-1877

Orange County

OCTA Building 

600 South Main Street

Suite 906

Orange, CA 92863 

Phone: (714) 542-3687 

Fax: (714) 560-5089 

Riverside County

3403 10th Street

Suite 805 

Riverside, CA 92501 

Phone: (951) 784-1513 

Fax: (951) 784-3925

San Bernardino County

Santa Fe Depot 

1170 West 3rd Street

Suite 140 

San Bernardino, CA 92410 

Phone: (909) 806-3556 

Fax: (909) 806-3572

Ventura County

950 County Square Drive

Suite 101 

Ventura, CA 93003 

Phone: (805) 642-2800 

Fax: (805) 642-2260 

818 West 7th Street, 12th Floor 

Los Angeles, CA 90017 

Phone: (213) 236-1800 

Fax: (213) 236-1825

www.scag.ca.gov

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