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Open Access Publications from the University of California

Local Transportation Sales Taxes: California's Experiment in Transportation Finance

  • Author(s): Crabbe, Amber E.
  • Hiatt, Rachel
  • Poliwka, Susan D.
  • Wachs, Martin
  • et al.
Abstract

Over the last 25 years, voters in 20 California counties approved “local transportation sales taxes” to pay for transportation projects. A growing source of revenue, they generate roughly $2.5 billion per year. Four features explain their popularity: they require direct voter approval; funds are raised and spent within the counties that enact them, so voters experience benefits directly; most automatically expire; and they usually specify the improvements to be financed. These taxes are an important revenue source, but tend to favor capital investments over operations and maintenance. They have enhanced local governments' decision-making authority, but may have made regional transportation planning in multi-county regions more difficult to achieve.

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