The San Diego Association of Governments is on track to collect billions of dollars less than officials said it would from a sales tax hike voters approved 12 years ago, throwing into question whether it will have the money to pay for many of the projects that measure promised.
The causes of the shortfall, unreported until now and only disclosed in a complex budget analysis document, could also jeopardize many of the promises in another sales tax hike SANDAG is pushing on this November’s ballot, Measure A.
SANDAG leaders obscured the size of the shortfall in the one place they disclosed it. They have not told the public of risks that they won’t get the $18 billion they say Measure A would generate over 40 years, meaning some of the promised projects in the ballot measure may not get funding.
“It’s very significant, because voters are being misled, possibly deliberately or certainly with negligence,” said Peter Kiernan, an attorney with Schiff Harden who specializes in public finance and infrastructure and who worked as special counsel on those issues for the city and state of New York.
“If your revenue modeling is proven wrong, you have an obligation to change it. And if they’re not willing to admit that it’s been proven wrong, then they’re not looking at the facts,” he said.
Voters in 2004 approved an extension of TransNet, a half-cent sales tax to fund freeway widenings, light rail expansion, habitat preservation, bike lanes and road improvements across the county. The tax went into effect four years later. So far, SANDAG has collected 25 percent less revenue under TransNet than it promised voters on the ballot.
We Stand Up for You. Will You Stand Up for Us?
Most people in the county use roads and highways, few, use public transit, maybe 3 or 4% yet we spend so much on it. Roads and Highways should get most of the funding, mass transit, the least, this makes sense as you will NOT get people out of cars and into slow and inefficient mass transit. Smooth running highways produce much less emissions than traffic jams.
Examining the dollar projections in 2004, and recently for Measure A, can be valuable for future plans.
However for reasons given a few weeks ago as below, there are compelling reasons to apply them to significant re-allocations in the overall plan.
Unlike the private sector, these government employees suffer zero negative consequences if -- well, WHEN -- their economic forecasts are wrong. And they are ALWAYS wrong. They have been for decades. By a lot. And always wrong while making the case for higher tax rates.
It's important to understand that these bureaucrats are not incompetents. Most SANDAG 'projecters' are well versed in finance and statistical analysis. They are very bright people. They actually PROFIT from being wrong, as long as their figures oversell the need for their bureaucracy and their services.
In the private sector, the employer (say, an insurance company) wants an accurate analysis of what the future will be. They are constantly reassessing what risks and business opportunities await them. If these private sector analysts are wrong, they are replaced by better analysts. Not so at SANDAG. Au contraire!
Everyone down at SANDAG understands the game. Sell the public on the need for very expensive, inefficient transportation solutions and then retire with a huge pension. Such an agency flies below the radar when it comes to pay and benefits. It's a chummy club that delights in making brash -- hell, FALSE -- predictions, while facing zero chance of getting fired for doing so. Indeed, PROMOTION awaits the most dishonest SANDAG analyst.
SANDAG blames the shortfall on a recession. Stated differently, SANDAG is projecting forty years of booming sales tax revenue with no recessions.
Gosh, what could go wrong?
Anything that Ron Roberts supports is something to be very cautious about voting for. Especially anything related to development.
A picture says 1000 words and your two charts say it all. Thank you Andrew and also thank you for reminding me that I am already paying for one program for improved transportation, Transnet that I had forgotten about. With the recent huge increases in water and SDG&E rates along with health insurance increases, I was undecided about whether to vote for a tax increase for the next 40 years. Not any more.
I found the comments by Mr. Major and Cox arrogant, callous, and flippant. It is Business Management 101 that you need to do periodic revenue projection updates, especially after an impact like the Big Recession. Also please identify for us who exactly are the members of the Independent Taxpayer Oversight Committee. They all need to be fired for negligence.
I already voted for Measure A, but now I feel like I've been had. Don't know if i will ever trust SANDAG again. Moreover, can someone concisely identify all the politicians who were responsible for hiding this information so I can avoid voting for them again? Don't know if I would have voted for Measure A if I had the information, but it is now very unlikely that I will ever vote to support another SANDAG tax measure. The well has been poisoned. Good job VOSD bringing this to light before most people vote.
I don't trust SANDAG and voted No on this. SANDAG is a dysfunctional, clandestine agency that needs to be reorganized. KPBS did a good comparison on the structure of SANDAG compared to Los Angeles' planning agency. The problem with SANDAG is it's weighted to rural/suburban governments like Vista, El Cajon, Santee, etc that all have disproportional votes on urban infrastructure in the core of the city of San Diego. Furthermore, SANDAG has a long history of making grandiose plans then failing to implement them even when they are given extra funding. They've had different plans and timeframes for a trolley line linking downtown to midtown (Balboa Park, Hillcrest, North Park). If you look at their past "plans" they had this trolley line, then they changed it to a "streetcar" then they scrapped it altogether. Now, they've apparently decided this "purple line" that goes from the border to Kearney Mesa takes precedence over any light rail in the dense mid-city areas bordering downtown. They've scrapped any light rail in this central urban area in their long-term 30 + year plan. It's frustrating that they just scrap plans and re-do timelines and change priorities without explaining why. Why was a trolley line linking the mid city area with downtown a priority for 20 + years according to their previous plans, and now it's completely scrapped in favor of the border to Kearny Mesa "purple line." Did they do some sort of research showing this is a better use of light rail and, if so, why don't they make their reasoning public? Could it be the "purple line" passes through more cities with weighted votes in SANDAG's draconian voting structure such that a trolley line concentrated wholly within the city of San Diego had no chance to pass regardless of if it makes more sense from an urban planning perspective?
Bottom line is that SANDAG doesn't deserve one red cent of our money until they are restructured so the City of San Diego is making decisions for ourselves, not the mayors of Santee, Escondido, and Imperial Beach
SANDAG’s chief economist explains the shortfall as the result of the recession? News Flash: President Obama claims we’re out of the recession, yet the shortfall seems from the graph to be growing annually. Not to worry, it’ll straighten out over time. Right, and this guy will be long retired with a fat public pension, so no repercussions (at least to him).
SANDAGs’ special projects director (and former chief economist) says it’s immaterial whether the sales tax brings in 14 mil, 9 mil or whatever, the amount will be enough to pay for all the projects. Huh? I guess he’s on a retirement track too.
Looks like SANDAG will have to prioritize it’s spending. You can bet that freeways will fall off the list first unless they are somehow forced to follow the public’s priorities.
Where does SANDAG get people like this? Are they so sure they can just float another sales tax increment and get public approval because it says “transportation” in the proposal? This is nuts but it’s hardly unique. Look at the high speed rail project, sold to the public on false promises.
Of over 30 propositions voters are asked to decide in November, I counted 8 that would either raise taxes or issue bonds to pay for stuff, largely infrastructure projects (assuming you count the Chargers boondoggle as infrastructure). This is simply insanity. When H.L. Mencken penned his immortal words about the intelligence of the voters, I’m sure he had not a clue as to the myriad and complexity of issues they would be asked to decide.
One thing is obvious: propositions that cover 40 years are bovine scatology. I’ll never vote for one.
The problem is predictors. Bring in your Harry Potter wizards and your top economic advisors on the future and an eight year old hits the spot with darts. The whole thing is a crap shoot. What isn't a gamble is reality. People are spending to buy cars just to spend time in bumper to bumper traffic for less than $15 an hour. Who wins? The people that make roads, own gas stations, and can work at home. The problem we have today is the problem that was presented in 1970 and our duly elected "representatives" blew it all off. The trolley system in San Diego is just a beginning. The bus system is abysmal. If my kid is sick and I live in San Ysidro it will take me a day off from work, a whole day making bus connections, and I'll be home with my child late at night. And, all I wanted to do is get the kid to Children's. If I had a car, I'd do the whole thing in two hours . Our mass transit system is just window dressing. People in Spain think traffic jams are cool. Why? Because they just want to experience the American horror. They have had a great mass transit system since before the mid 1960s.
The glamorous image of riding a Porsche Carrera fast through the winding roads to Tecate are still available for those with bucks between the hours of 9am and 3pm. The rest of us rise up at 3am to beat the traffic at 5 to drive to Kearney Mesa before 6am only to test the will of our bosses to let us leave work at 2 to beat the traffic going home. People that make a lot of money on that road are also spending a lot of money to do it.
It's that money that is hurting San Diego. Money that could easily be spent to produce more, but is spent just "getting there".
We in San Diego are 50 years late. We need to wake up from a pot haze, our surfer haze and our communal Alzheimers haze. Our little town is way behind the proverbial eight ball.
@John H Borja Why? Please read up on the mid 1970s Gov Brown era. mass transit will accommodate travel growth, reduce road expansion to reduce pollution.
Instead cars absorbed 95% of growth.
Simultaneous introduction of all cars with doubled mpg was ignored.
Cars continue to improve and are by far, not mass transit, the reasons for cleaner air. More improvement; 54 mpg starting 2025, electrics.
But the mid 1970s dream continues; get people back into cars. Spend as much Transnet for 30 years on mass transit is less than 2%, as road ravel which has doubled.
What do you expect?
Yes. If the $40 Billion planned for mass transit were used for freeway lanes, at typical daily use,~20,000 daily passenger-miles per lane mile, the freeway daily flow would be 23 million passenger-miles daily.
Mass transit flow is ~2 million.
At current ridership levels, trolley route land use is at least twice freeways.
Excellent work, VOICE!! But you're dealing with one tree in a towering forest of SANDAG lies.
As far as I've been able to tell from over thirty years observing SANDAG, this agency ALWAYS lies about projections. The lies are intended to dupe the public, the media and the politicians into funneling more money their way.
Sure, they could just be honest projection errors. But when EVERY projection error overstates SANDAG's predicted project benefits while understating the costs, the pattern is too consistent to write off to chance. And it's not like they "just miss the mark."
SANDAG projections are usually wrong by AT LEAST 40% -- and often much more. The latest example is the Midcoast trolley spur. Originally projected at $1.2 billion, it's coming in somewhere north of $2.1 billion. You'll find the original ridership projections are FAR higher than than they now predict, which in turn is STILL higher than what the spur will experience one year after completion. Mark it on your calendar to check that I'm correct.
VOICE should do a look back at SANDAG projections on each regional rail line when first proposed -- the projected cost and the projected ridership. With the possible exception of the highly successful (by public rail standards) Tijuana Trolley, I think you'll find they always "erred" -- because of their pro-choo-choo bias.
Over the years I've contended with a lot of dishonest politicians and bureaucrats. In the 1990's EVERY City Manager in the county (sophisticated financial analysts all) lied to their city councils about the viability of huge, underfunded. retroactive guaranteed pension increases for their public employees (and for themselves). But to date I've found no local government or government agency more blatantly dishonest than SANDAG. Arguably CalPERS is worse, but they are a STATE agency.
@Richard Rider The Mid-Coast example of course triggers the question about real cots for all the projects to year 2050 in S D Forward.
Andrew's fine article deals with collections. What a bout spendings?
I don't believe the Recession is over. Sinificant odds for high inflation if we keep trying to print money.
Them bigger collections? But even higher costs?
If the sales tax in Los Angeles passes and San Diego's does not, San Diego businesses should benefit from people travelling from LA to make large purchases like automobiles.
That being said, consider me unsurprised that tbe benefits of the last tax hike were over promised and under delivered. San Diego is unable to spend money efficiently and spends exorbitant amount on simple jobs, the $5 million lifeguard tower comes to mind. Rail money doesn't go very far when budgeting $100 million per mile, like the extension to UCSD. Count me as unsurprised when that project comes in behind schedule and over budget, lets try to predict the excuses: they will blame the contractor, they will blame last minute changes, they will blame the neighbors...
@Sean M Little known fact: Sales taxes on car purchases are based on the city/county of residence of the buyer, not the location of the seller.
The other peculiarity is cutting library hours in half then open up the new downtown central library.
I personally would support a road building if it wasn't all going to carpool lanes that cost 150% more to build and are available for use by a tiny minority of drivers.
@Sean M FWIW, sales tax on autos is calculated from where your car registration is, not where you buy the vehicle.
Roadways are more expensive for long-term maintenance than light rail transit maintenance costs.
Measure A would widen freeways (SANDAG calls HOV lanes 'transit'), when they've already proven our existing roads are too expensive to maintain.
San Diego needs functional, integrated transit. Not more polluting, expensive roads.
@Sara_K Not true -- not PER PASSENGER MILE. A rail line carries a tiny fraction of the traffic on a freeway.
@Sara_K We can't afford to maintain the roads we already have, yet they want to build more. That's a pretty good way to make San Diego go bankrupt!
The San Diego Trolley costs 31 cents per passenger mile to operate: https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/90026.pdf
I would rather pay 31 cents per mile than 57 cents per mile, wouldn't you?
Electric vehicles don't pollute and the demand for self driving electric cars is going to be huge. They will be around way before the new UCSD trolley route is _scheduled_ to be finished in 2021. (But we all know that construction is going to be delayed).
You won't have to worry about your electric car going on strike because the city wants it to pay more for its own healthcare and pension costs. The city won't have to pay someone to stand around and show people how to use the electronic ticket machine either. i do grant that cost is not a concern that most mass transit advocates are concerned with.
@Derek Hofmann @Richard Rider You're missing the point. It's what the road or rail costs TAXPAYERS per passenger mile.
If rail were attractive, it would be getting larger ridership. It's not. While rail ridership as grown modestly in San Diego, it's estimated that 75% of that rail riders are former BUS riders -- buses that are often discontinued when the rail lines open.
Since 1985 LA transportation agency has spent NINE BILLION DOLLARS on public transit (almost all on light rail), and 30 years later FEWER people use public transit in the region than they did in 1985. Not just a lower percentage -- FEWER actual riders.
Moreover, the car example includes depreciation and maintenance on the car. The rail figure is the direct OPERATING costs -- with no provision for the depreciation or major repairs.
MORE important, look at YOUR reference -- the the bottom of the DOT summary. Compare buses and light rail, which look to cost about the same. But capital costs for buses is a tiny fraction of trains, yet it appears that the two have the same cost. Obviously your metric is flawed. That's OPERATING cost -- ignoring capital costs, including maintenance. Buses work better, get people closer to where they want to go, and cost FAR less than the choo-choos.
In addition, remember that rail doesn't bring people to their home. Normally a car is needed to get to and from the train station, which makes trains usually less swift and FAR less flexible than cars -- a "cost" a train rider pays for such a rigid 19th century system of transportation.
@Richard Rider "While rail ridership [has] grown modestly in San Diego, it's estimated that 75% of that rail riders are former BUS riders -- buses that are often discontinued when the rail lines open."
That's good because MTS buses cost 76 cents per passenger mile while the trolly costs 31 cents. (It's at the link I provided above.)
"rail doesn't bring people to their home. Normally a car is needed to get to and from the train station"
Back when transit was privately owned and operated, railroad companies would build towns. This allowed them to speculate on the land while building demand for rail service. This is still done in places like Japan. But in San Diego, the goal of transit is not profitability, it's moving as many people by transit as possible. This is why instead of building condos and office buildings on government-owned land next to train stations, San Diego builds parking lots. So now it's easier for people to drive to the train station than to live next to one.
To make matters worse, San Diego forces developers to build off-street parking in new neighborhoods. This brings traffic congestion in the same way that standing water brings mosquitoes, and it further makes driving more convenient than transit. This isn't a level playing field by any stretch.
So as you can see, traffic congestion and inconvenient transit have a common root cause, one which benefits the oil companies at our expense.
The goal of transit is never profitability, no public transit agency is profitable, all require subsidies.
The parking lots around the transit stations always look full. Ridership would be much lower if people couldn't park their cars around the train station. Nobody wants to live next to a train, let alone a train station. Trains are loud. There is a reason security guards are posted all around each station: stations attract crime.
Very few people would buy residential property if it didn't come with parking. Nobody takes the bus to Costco. Where would someone who can afford a home put their car if there is no parking? Developments without parking won't sell.
I do agree that it is a good idea to have offices near train stations so people could take the train to work. however, the supposedly "smart growth" academics in SD keep advocating for building high density, low income housing near stations. There property gets given away to the lucky lottery winners who qualify.
@Derek Hofmann NEEDS MORE CAPS
@Sean M Drivers enjoy massive subsidies. Why shouldn't public transit users? http://www.theatlantic.com/business/archive/2015/10/driving-true-costs/412237/
If nobody wants to live next to a train, why is real estate booming in Little Italy?
If train stations attract crime, why do studies show that "the presence of transit does not lead to more neighborhood crime"? http://sandiegohealth.org/sandag/publicationid_1483_10995.pdf
If no one would buy property without parking, why do millions of people around the world own residential property with no parking?
I think you outdid yourself here Sean!
@Sean M "no public transit agency is profitable"
The Acela Express is profitable: http://www.businessinsider.com/report-amtrak-loss-comes-to-32-per-passenger-2009-10
"Nobody wants to live next to a train, let alone a train station."
Then why do people live next to trains? If they preferred to live somewhere else, wouldn't they live somewhere else?
It's like that old Yogiism: "nobody goes there anymore. It's too crowded."
"Developments without parking won't sell."
Then why do we need laws to force residential developers to build parking? Is it the proper role of government to regulate every business into profitability?
"the supposedly 'smart growth' academics in SD keep advocating for building high density, low income housing near stations."
We've regulated poor people out of middle- and upper-class neighborhoods. Where should we put them? Remember, many of those people don't own cars.
@Richard Rider To make roads pay for themselves, we would need to pay around $2.22 per gallon in gas taxes: http://www.sightline.org/2008/07/23/do-gas-taxes-cover-the-costs-of-roads/
Anti-transit advocates never mention the massive health and climate costs of driving - $15B/year in California - which we also all subsidize: http://www.kpbs.org/news/2016/oct/27/true-cost-gas-powered-vehicles-staggering-californ/. Or the hundreds of billions in federal general funds used to prop up the bankrupt Highway Trust Fund. And then they have the chutzpah to complain about transit subsidies.
@paul jamason A level playing field between cars and other forms of transportation will always seem anti-car to the pro-car crowd. This is an example of the "hostile media effect": https://en.wikipedia.org/wiki/Hostile_media_effect
Let us remember the past that is being repeated. SANDAG failed to bring in the revenues promised from the sales tax hike before this one - you know - 40 years ago.... they still haven't built the trolley promised to UCSD in the original TransNet! They just rolled the project over into the new one. They also refuse to create any sort of priority list - so the transit projects fall to the bottom. Expect the same with this measure.... and the next.... and the next....