This dissertation examines the role that finance plays in shaping transportation planning and policy making and concludes that the key to understanding the development of metropolitan transportation systems is found in the political negotiation and compromises made to secure public investment in those systems. The particular circumstances leading to or preventing a tax increase of appropriation for a program or project explains most of the success or failure of that program or project. Three cases from California are examined: (1) the planning and finance of urban freeways prior to 1960, (2) the shift from "freeway-first" to "multi-modal" urban transportation policies after 1960, and (3) the development of state subsidies of public transit after 1970. Each of these cases is a significant chapter in the transportation history of California and each will show that the goals of the rational planning model have largely gone unfulfilled; in each case, the politics of finance superseded planning at the local level and policy making at the state level.

Freeways have profoundly influenced the form and function of U.S. cities, yet urban planners generally played only a peripheral role in their development. This article traces the history of freeway development in California to show how political negotiations between local and state governments over street and highway finance resulted in urban freeways financed, designed, and built by the state highway department. To fund their ambitious transportation plans, local officials and planners in cities like Los Angeles turned over control of the planning and development of urban freeways in the 1940s and 1950s to state departments of transportation. This shift in control led to, among other things, the construction of freeways too large to fit easily into cities and freeway networks too sparse to adequately disperse urban traffic. While federal surface transportation legislation returned significant control over metropolitan freeways to regions and planners in the 1990s, the influence of modern freeways on urban life endures.

Federal subsidies of public transit, particularly transit operations are declining and the responsibility for supporting transit is falling increasingly on states and localities. In California, the Transportation Development Act (TDA) has become the state's principal source of transit operating subsidies. This paper shows that the strict per capita allocation formulas of the TDA strongly favor lightly patronized suburban transit service over more heavily patronized service in the central cities. Transit riders in San Francisco, for example, receive a TDA subsidy of $0.13 per trip, while the TDA subsidy to transit patrons in suburban Livermore is over $5.00 per trip. The built-in suburban bias of the TDA is the result of partisan compromises made to secure passage of the Act in 1971; compromises to assuage a Republican governor opposed to new taxes and to include the interests of rural and suburban counties. The result has been a proliferation in California of new, well-funded, and expanding suburban transit operators that attract few riders while older, heavily patronized central city transit operators are forced to cut service because of funding shortfalls. The paper concludes by proposing a more efficient and equitable method for allocating TDA funds than the current formula which, in the name of equity provides all Californians with a "fair share" of public transit, whether or not they use it.

Focusing on plans and planning debates can obscure the critical role that public finance plays in shaping planning outcomes. This paper explores the important role of finance by examining the relationship between freeway finance and freeway planning in California since 1959. Popular perception holds that a groundswell of public opposition led politicians to abandon ambitions freeway plans in the 1970s. In California, this antifreeway movement is said to have culminated in 1975 when the state formally renounced the 1959 Freeway Plan and adopted a new “multi-modal” stance. A careful review of freeway finance, however, reveals that the freeway program was in serious decline nearly a decade before the adoption of a new state transportation policy, because California had simply run out of money to pay for an increasingly expensive freeway program.