The agency’s ambitious Twenty-eight by ’28 plan could get expensive
original article: https://la.curbed.com/2018/12/4/18124452/metro-los-angeles-2028-olympics-plan-budget
A tax on scooters and tolls for drivers on the road during rush hour are two possible sources of funding that Metro could use to pay for an ambitious plan to complete 28 projects in time for the 2028 Olympics.
The agency’s board of directors will consider a reportthis week that outlines how the agency could carry out Mayor Eric Garcetti’s “Twenty-eight by ’28” initiative without compromising service or going deep into debt.
Most of the projects included in the initiative were already scheduled to wrap up before 2028. But eight projects—including a transit line through the Sepulveda Pass, an extension of the southern leg of the Gold Line to Whittier, and a new light rail route between Artesia and Downtown LA—would open far ahead of schedule.
The simplest of the potential fundraising measures is an increase in fares on trains and buses. A 10 percent fare hike could generate $303 million over the next 10 years, while a 25 percent uptick could produce $757 million.
But that’s far from the $26.2 billion needed to carry out the Twenty-eight by ’28 plan—and a major fare increase could drive some riders away from public transportation.
Some of the most potentially lucrative options are new fees on drivers. One of these is congestion pricing, a system in which drivers are charged when passing through particularly traffic-clogged areas during peak hours.
Another is a toll system called VMT pricing, in which drivers are charged based on how far they drive (or vehicle miles traveled) in a given time period. Levies like these are usually proposed as alternatives to a gas tax.
Congestion or VMT pricing could produce between $12 billion and $104 billion over the next decade, according to the report. But imposing new taxes like these could be politically tricky, since LA voters already agreed to bumps in sales tax when they approved Measure R in 2008 and Measure M in 2016.
All eight of the projects Metro aims to expedite are set to receive funding from Measure M, and because of that, speeding up the projects is tricky.
Measure M has a strict funding schedule that can’t be altered without guarantees that other projects won’t be slowed down or lose out on funding as a result.
Since Metro can’t simply re-order the project list, the agency will have to pay for all those new projects in advance. That’s where the $26.2 billion figure comes from.
Other possible sources for that money include grants from the federal government, expansion of sponsorship and advertising opportunities, a tax on shared scooters and bicycles, and new levies on ride-hailing companies like Uber and Lyft.
Metro officials have expressed optimism about the potential of public-private partnerships to speed up certain projects, and the agency has already received proposals from private firms that could allow the Sepulveda Pass corridor and the light rail between Downtown and Artesia to materialize ahead of schedule.
But private proposals aren’t an option for all of the eight projects in line for acceleration, and Metro would still need to bring plenty of funding to the table as part of these agreements.
Unmentioned in the report is another potential obstacle: escalating construction costs.
Last month, the agency overseeing construction of Metro’s Gold Line extension to Montclair announced a plan to break the project up into two segments due to “a significant unfavorable shift in market conditions.” The projected budget for the 12.3-mile extension has also ballooned more than 35 percent, to $2.1 billion.
Kenneth Simonson, chief economist for the Associated General Contractors of America, wrote a white paper on the project in which he argues that the Gold Line’s escalating costs are part of a broader trend affecting transit projects nationwide.
Simonson says that a shortage of laborers qualified to work on these projects and the impact of new tariffs on building materials are driving up prices needed to complete major infrastructure developments.
“The baseline has certainly changed,” he tells Curbed.
If more projects go over budget, that will make it even more difficult for Metro to ensure that every item on the Twenty-eight by ’28 list wraps up on time.
“We are aware of the upward trend in construction costs that the market is experiencing and we continue to monitor the situation,” Metro spokesperson Dave Sotero said in a statement given to Curbed. “Every project is unique and has unique benefits and challenges. We’re already working to mitigate the risk on all of our projects.”
Denny Zane, director of the Move LA coalition, which led the campaign for Measure M tells Curbed that it’s too early to write off the Twenty-eight by ’28 objectives.
“Of course we’re concerned,” he says. “But it’s a mistake to say ‘We can’t do it.’”