Arguing over Transportation Sales Taxes
An Analysis of Equity Debates in Transportation Ballot Measures
Jaimee Lederman (UCLA), Anne Brown (University of Oregon), Brian D. Taylor (UCLA), and Martin Wachs (UCLA)
Voter-approved local option sales tax (LOST) measures for transportation increasingly fill gaps between falling fuel tax revenues and growing transportation investment needs. There are concerns, however, over whether LOSTs are an equitable transportation finance mechanism. Equity is a critical concept in public policy and finance, and debates over resource distribution on fairness grounds are often contentious. Sales taxes are typically regressive—disproportionately burdening low-income residents—and disconnected from transportation system usage.
In addition to determining who pays the taxes, evaluating the equity of transportation sales taxes requires examining the “fairness” of the expenditures across transport modes and geographies. Debates over the fairness of taxing and spending government dollars are inherently subjective, even when informed by ostensibly objective data. What is equal or unequal can be measured, but what is fair or right cannot. And it is these perceptions of fairness and equity that guide most debates over transportation taxing and finance.
Our study examined how complex equity issues raised by LOST measures were presented to voters through an analysis of ballot arguments for and against measures in California counties. Ballot arguments are prepared by measure proponents and opponents and are included in voter guides that are mailed to all registered voters. The arguments reveal a measure’s intent and seek to influence voter perceptions by identifying expenditure patterns that often raise equity concerns. We used textual analysis to identify and categorize arguments related to three dimensions of equity most often measured by transportation researchers: income, geographic, and modal funding equity. Income equity concerns the relative distribution of costs and benefits across different income groups. Geographic equity is measured as the spatial distribution of sales tax burden and benefits, typically across jurisdictions. Modal equity concerns how sales tax revenues are divided across modes. In total, we analyzed ballot arguments for 37 California LOST measures.
Equity concerns played only a small role in most of the ballot arguments compared to issues such as congestion, economic development, and whether additional taxation was necessary to achieve transportation goals. Although rarely the most prominent issue presented in ballot arguments, 32 of the 37 (86%) measure ballot arguments reviewed directly mention or allude to equity issues. Geographic and modal equity were raised nearly twice as often (28 and 26 times, respectively) compared to income equity, which was raised in debates over 15 measures. Specific equity arguments were more often raised in arguments opposing ballot measures. Arguments supporting measures generally avoided specific equity discussions in favor of subtle language conveying to voters that the measure included “something for everyone”—only raising equity issues through language that preemptively signaled that there were no equity concerns. Measure opponents frequently attacked specific perceived inequities in the proposed expenditure plan, often using histrionic rhetoric. Ballot arguments also revealed significant interplay between the three types of equity and that finite LOST funding means that achieving one type of equity often necessitates a tradeoff with others.
We found no obvious connection between equity debates in ballot arguments and measure passage rates. Because there are inevitably winners and losers in the distribution of limited resources in all the measures, it is perhaps not surprising that virtually all LOST measures engender at least some modal equity debates. LOST expenditure plans cast funding allocations across modes in sharp relief and reveal the necessary opportunity costs that arise when funding one mode instead of another. While debates over the merits of road versus transit investments play a central role in many of the ballot measure arguments—and have been central to conventional transportation policy debates for years—this analysis reveals a nuanced set of arguments regarding funding allocation among transit modes.
In contrast to modal equity, ballot arguments raised income and geographic equity issues relatively infrequently. Only five measures specifically addressed sales tax regressivity in the ballot arguments. In addition, we found that debates over geographic equity played only a modest role in ballot arguments, a finding that runs counter to previous research on this topic. One possible explanation is that the critical importance of geographic equity to the success of LOST measures has become “conventional wisdom,” such that it was explicitly addressed before the measures ever appear on the ballot.
Another key finding is that ballot arguments reflected a county’s existing transportation system, travel patterns, and local political economy. For example, more intense equity debates occurred in urban settings where more modes compete for money. Suburban counties are more likely to focus debates around funding transit over roads and often include negative rhetoric towards transit investment. Rural counties, which often fund minimal public transit services, are more likely to frame geographic equity debates between funding regional and local road projects.
Equity was more often raised by measure opponents, who were more likely than proponents to be pointed and specific about the burdens on and benefits to classes of people, geographies, and transportation modes. When raised in supporters’ arguments, equity was most often addressed in the form of general, even vague, assurances that the proposed measure was fair, balanced, and offered something for everyone. Finally, when raised, there was often interaction among equity issues in LOST ballot arguments, illustrated most vividly in simultaneous debates over the geographic and modal equity implications of major investments in large-scale capital projects. Measure expenditure plans result from balancing acts among stakeholder groups, such that the most politically palatable measure may not be the most equitable.
Jaimee Lederman is a postdoctoral fellow at the Institute of Transportation Studies at UCLA. Her research explores the interplay between transportation planning and finance, regional governance, and environmental law and policy. She previously received a JD and a Masters in Economics, and practiced as a lawyer focused on administrative law and regulatory issues.
Anne Brown is an assistant professor in the School of Planning, Public Policy, and Management at the University of Oregon. Her research focuses on transportation equity, innovative mobility, travel behavior, and transportation finance.
Brian D. Taylor FAICP is a professor of urban planning in the Luskin School of Public Affairs and Director of the Institute of Transportation Studies at UCLA. He studies travel behavior and transportation equity, finance, history, and politics. His recent research examines falling public transit ridership, public sector responses to new mobility services, the travel behavior of Millennials, the rise of local option sales taxes for transportation, and the economic effects of traffic congestion.
Martin Wachs is distinguished professor emeritus of Civil & Environmental Engineering and City & Regional Planning at the University of California. He directed the Institute of Transportation Studies at Berkeley, was Director of the University of California Transportation Center, and was Chairman of the Department of Urban Planning at UCLA. Wachs later headed the Transportation, Space, and Technology Program at the RAND Corporation. He teaches and conducts research at UCLA in transportation policy.