March 25, 2004 - From the February, 2004 issue

Without Conformity to Federal Air Quality Mandates, Regional Transit Funds Could Be Embargoed

Southern California faces a serious problem. Should the region fail to meet its air quality metrics as outlined in the Clean Air Act, federal transportation investments could be frozen, which would present major challenges to the region's economy. MIR is pleased to present this interview with Mark Pisano, Executive Director of SCAG, in which he addresses SCAG's annual State of the Region report as well as the serious implications of Southern California's conformity with the Clean Air Act.


Mark Pisano

Mark, SCAG released its State of the Region report this month. One of the headlines was, "Good Vibes Overcome Bad News." Begin with the good vibes and then address the bad news.

The good vibes are that Southern California has not lost its attractiveness for people coming here, be they domestic or from abroad. Last year we added almost 300,000 people, which shows that the weather and the dream of Southern California is still alive in the minds of people.

The bad news is that all of the indicators that we track, in terms of progress made against our regional goals, suggest that we didn't make any progress in the last year on any front. It just was not a positive year in terms of job growth. In fact, the region lost jobs, much to our disappointment. We also didn't make progress on air quality, which reverses a decade-long trend. And, in the areas of transportation and housing, the price of housing became more expensive and we didn't make progress on transit or ride share or the other factors on which we have focused to improve quality of life. You put it together and it basically says Southern California has a lot of work in front of it. However, Southern California is still an attractive place, and that means there's promise.

The report notes that housing construction in the region is robust, with the largest number of permits since 1990 now issued. With so much construction, what's your prediction for housing affordability, for more work force housing in the near future?

The positive news was that we had more building permits than we have had in recent years, in the range of 68,000 units. That, in fact, was propelled by the low interest rates. A key factor in the development trends was that mixed-use and multi-family were substantially on the rise, particularly in the western part of our region. Those are very positive signs that we're making the transformation to infill. In fact, we did a separate review of that and over the last ten years; over 60% of our housing in this region was infill. So that's a very positive sign for the region.

The difficult news is that the price of housing just keeps escalating. That's a trend that is impacting the percentage of people who can afford their own home. Those percentages are increasing, so our population spends more of their income on housing, both for home ownership and rental, than do the populations of any other region in the country. So, the question of the cost of housing, be it rental or for-sale, is an issue that we need to address. How we address the problem is quite a challenge. There are a lot of proposals on the table, but there's no clear path as to how we do that.

And the region's air quality?

We've been making dramatic improvements in the last decade in air quality. However, in the last two years, the number of days in which we're exceeding standards began to increase for the first time. So, it's one of those areas where, in our State of the Region report, we got a lower rate and assessment than we did last year. The logical question then is to ask why we are seeing this downturn in our air quality.

We're now seeing an increase in number of miles traveled and an increase in the amount of emissions coming from the automobile. So, we need to address the amount of trip making in the region, and we'll be tackling that problem in the revision to our growth and transportation plan. We're going to have some major path breaking policies and new directions that will be established in our upcoming transportation plan, which we'll be adopting in April. We're looking at new growth patterns within the region that reduce trips and reflect strategies to make the transit focus and the carpool focus much more productive. But air quality is an area we're going to have to work on.

Lastly, the federal government and the state government are going to have to be tougher with the emissions over which they have control. Controls on diesel driven vehicles, primarily coming out of our ports via truck and rail, will need to be stepped up.

Let's connect SCAG's findings with the pressing fiscal issues before the Legislature, local government, and voters. Budget reductions clearly are forcing difficult funding choices to be made. With the State's budget uncertain, what is actually at stake re SCAG's priorities for our region?

The budget reductions that we're experiencing at the state level-and they're very real-will impact us by asking our local governments and transportation agencies to share a portion of the deficit burden. These are reductions that the region simply cannot afford.

Any reduction in county expenditures is going to affect the programs relating to public safety and public health. The major line items in our city budgets are police and fire. So, it is possible, and even probable, that these budget reductions will impact police and fire services.

And then in the area of transportation, the budget reductions will impact our ability to advance congestion relief strategies to improve mobility. We did not make progress on this year, and we need to make sure that we can keep our congestion relief programs on target. Another critical aspect of the transportation cuts is that we will be challenged to meet transportation's portion of the air quality standards. In addition to the health risks, there's an interesting provision in state law that says if you're not meeting your commitments to achieve your health based air quality requirements, than you can lose all of your federal funds related to expanding your transportation system. And furthermore, you can't spend your local funds to expand the transportation system.

In other words, we have to put a corrective program in place. Over the last two years, the sum total of these reductions in transportation funds is about $4 billion. That's about 20% of the total construction program over the next six years in the region. If the region is not able to move and meet its air quality commitment, we'll lose another $8 billion of federal and local funds. And, that $12 billion is 50% of all of our projected expenditures in transportation over the next six years. That translates into real serious impacts on the region. If there's a reduction of $12 billion, hat would translate to over 360,000 jobs being lost, or not being able to be generated. That's 1/3-to-1/2 of the jobs that could be formed in this region over that time period.

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So, the impact of this failure to perform on air quality and this failure to move on our transportation budget could be a calamity for the region. If we don't move forward, we don't put jobs in place, the economy isn't going to recover, and the state isn't going to recover. It's an issue of such substantial proportions that we feel there has to be a budget and legislative fix between now and the summer.

Let's focus on the above answer. Doesn't SCAG, Los Angeles' metropolitan planning organization, have to assure the federal government annually that the region's transportation and air quality goals/ projects are in conformity. Help our readers better understand SCAG's responsibility by defining and fleshing out how conformity is established and the consequences of a region being out of conformity.

This is an initiative or program that's defined in both federal and state law, both in transportation laws and in air quality laws. The way it is structured is that a portion of the strategy to achieve air quality comes from transportation. Some comes from technology controls on vehicles, and others from projects and programs that we within the region, including all of the transportation agencies and cities and counties, implement. It's called the transportation and land use portion of the air quality plan. We have a defined goal and very specific projects and programs to implement to keep us on schedule. Funding is essential to keeping them on schedule. If we don't have the funds or don't keep the programs on schedule, then a finding is made that we're not adhering to our commitments. If we can't make a postive finding, then we fall into what is called a conformity lapse. If our conformity of transportation with air quality lapses, then the only thing that can proceed are transit operations and some transit projects. But everything else stops.

And tie conformity to the budget debates at the state level, as well as at the federal level. How likely is it that SCAG will not be able this year to make a positive finding?

What's happened at the state level is there was a program that was put in place by the previous administration in Sacramento called the Congestion Relief Program. That congestion relief program that had in it transit projects-such as some of our light rail lines, HOV projects, projects to put sound walls at grade crossings, all projects that improve air quality. All of those projects have been eliminated. There was a second action that was taken at the state level that is significant, the passage of Prop. 42 by the voters. Prop. 42 took the sales tax for transportation and dedicated it to transportation activities. That was passed two years ago. The money from Prop. 42 is supposed to go to transportation. The proposed budget takes all that money and shifts it away from transportation. That has now been going on for about 2 1/2 years. If you sum those reductions with the reductions in our fund estimates coming out of Sacramento because of federal policies, we have a reduction in our region's transportation budget of $4.3 billion.

What do you realistically expect the Governor and Legislature to do re Transportation funding this year?

There's an issue of trust that needs to be reestablished. That is, the voters passed an initiative to direct certain funds to a certain category. The Legislature and the governor are going to have to deal with the trust link that was broken on Prop. 42 and find ways in which those resources can be redirected. Now, that's easily said and difficult to do.

First, we'll have to find efficiencies in the transportation sector that can offset those revenues. Between now and the time the budget is finalized, there's going to have to be a rethinking of the total loss of those moneys.

Secondly, the Legislature is going to have to give regions the authority to get other kinds of revenue streams and other kinds of projects put in place. Once they sort out rebuilding the trust and gaining efficiencies in the transportation system, the Legislature is going to have to consider new funding mechanisms. We can't continue on this type of a up-and-down cycle to meet our congestion relief, meet our air quality, and to provide the infrastructure necessary for our future economic growth. Our current system isn't working and we must rethink how we move forward.

Let's devolve our focus down to the region with regard to transportation funding and new investment in the metropolitan area. What's SCAG's role in the calculus of reaching consensus on a modernization plan for LAX?

The regional role in the LAX modernization is to put LAX in the context of the region. The mayor has continued his support of the region's request to keep LAX at 78 MAP (million annual passengers). The mayor and the city council and LAWA are going to have to take up, in the proposed regional plan that's out for circulation, the responsibility of operating the three major regional airports in this region as more of an integrated system. LAWA runs not only LAX, but it runs Ontario and it runs Palmdale.

Our plan calls for Ontario to become the next substantial airport in this region, going from its current 6 MAP to 30 MAP. Our plan also calls for Palmdale to become a very significant airport at around 14 MAP, with all three airports having international service. We believe that can happen if LAWA integrates the operation of those airports, creates a cost structure for the airlines that allows them to operate in a competitive fashion, namely they aren't charged more if they go to the other airports.

And finally, we're going to have to have high-speed ground access to those other airports so that people who live in the urbanized portion of the region can access all three airports. That is, people in L.A. must be able to get to Ontario or to Palmdale quickly, not just LAX. We believe a high-speed system can do that. If that type of system gets put in place, then we'll sort out at what rate we develop all three regional facilities. Those are the issues that are in front of LAWA as they think about their airports, and the City Council as they deliberate on the airports.

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