It has been a long road to this moment, and we are still not done.
This is a guest piece from Chandler YIMBY. You can follow them on Twitter or on their blog, where this post first appeared.
On Monday afternoon, Arizona’s 56th legislative session finally came to an end, upon passage of Senate Bill 1102, the result of months of negotiations around Maricopa County’s half-cent transportation tax, Prop 400. On one side was the Republican majority in the House and Senate, who opposed on light rail and other transit projects, and on other side was Democratic lawmakers, Governor Hobbs, cities, & other entities like the Maricopa Association of Governments (MAG). This tax is the largest source of funding for transportation projects and operations in the county. But if it’s a county-wide tax, how has this become a statewide issue? And what is in the tax now? Let’s talk about it.
Background
The county’s transportation tax dates all the way back to the 1980’s, when the cities first decided to implement the tax in order to fund the Valley’s loop highway system. Maricopa levied the tax on a variety of different business activities, and raised $3.8 billion dollars – 94.74% of which went to highways.
But the measure also created the Regional Public Transit Authority (Valley Metro), which set the stage for public transit in Maricopa. As 25-years of the tax went on, Maricopa grew a need for a more comprehensive transportation tax, leading to the creation of Prop 400. This tax funded a variety of transportation projects separated into 3 buckets: Highways, roads, and transit, receiving 56.2%, 10.5%, and 33.3% of the funds respectively. MAG is responsible for creating the Regional Transportation Plan, which outlines many of the projects that Prop 400 revenue can be used for. But now, state law required that the measure first be approved by the legislature before being sent to voters (ARS 28-6302, subsection C). Maricopa is the only county in the state that has to do this.
Prop 400 was approved by voters in 2004, and is set to expire in 2025. MAG, in coordination with the cities, formulated a new plan for the extension of Prop 400. This plan, known as Prop 400E, allocated 37.4% for highways, 22.2% for roads, and 40.4% for transit. In 2022, HB 2685 (Carroll) was proposed to reauthorize the transportation tax from 2025-2050. This bill passed the House and Senate, but was vetoed by then Gov. Ducey, starting the domino effect that brought us here.
Things go off the rails (literally)
Gov. Ducey cited a number reasons for his veto, but among them were objections to the initiative description language, which he argued was biased and incomplete, the extension of the tax for 25 instead of 20 years, and the reduced proportion of money towards highways. Now, the tax would have to get legislative approval soon or Maricopa County could face a huge gap in their funding.
After the 2022 elections, Katie Hobbs was elected governor, and legislative Republicans held control in the Senate and House. New versions of Prop 400E were introduced and considered in committee, and on the floors of both chambers. Democrats coalesced around the original Prop 400E proposal, now sponsored by Rep. Leezah Sun. Republicans proposed a variety of different extensions, the most extreme of which was SB 1122, sponsored by Sen. David Farnsworth. This plan allocated 80% of funds to highways, 15% to roads and 5% to public transit. In addition, transportation tax revenues could not be spent on light rail, commuter rail, streetcars or trollies. This would’ve killed public transit in the valley, but it failed to pass in the Senate Transportation Committee with no votes from Sen. Carroll (who had his own proposal) and the Democrats.
Then, in late June, Republicans began to unify around a new proposal. SB 1246 was sent to Governor Hobbs with 53.5% for highways, 18.5% for roads, and 28% for public transit, none of which could be spent on any rail transit. Unsurprisingly, it was vetoed by Gov. Hobbs, who had her own compromise proposal with MAG for 38% transit funding, and no money for rail expansion. Negotiations ensued between Republican leadership, MAG, and the Democrats. After another month of back and forth talks, we finally have a deal.
The Deal
SB 1122 continues the half-cent tax (upon voter approval) with 40.5% of funding for highways, 22.5% for roads and 37% for transit. Money collected cannot be used for light rail or streetcar expansions. 3.5% can be used for light rail maintenance, and projects that reduce the “existing lane miles on a street or highway” can only be done on roads given there will not be an increase in car travel times. Road diets that narrow or reconfigure roads would apply to this, but its not apparent that a dedicated bus lane would. I couldn’t find a definition for “lane-miles” in statute, but I did find this from ADOT.
Capitol Expansion
All of these projects could still be built if they don’t use Prop 400 funds, meaning that these projects are not necessarily in jeopardy. But that’s not the case for one project – the capitol expansion.
Currently, light rail only goes through the north and east parts of Downtown Phoenix. It does not cover South or West Phoenix, but new extensions to the system are changing this. This is something that is a bit personal for me. When I interned at the State Senate this session, I had to drive to work because light rail does not reach the capitol. I didn’t have to buy it or pay the insurance, but this still increased my transportation costs by $400 (I made $5000 for 5 months of full-time work), and I ditched the car once it was done. I did not want to drive to work, and I didn’t enjoy the increased costs or traffic, but I did it because I had to.
During the session, many Republican lawmakers found out about the light rail expansion to the Capitol, which is already funded and has been in the works for some time. Reports say that many of them were offended at the idea of seeing light rail from their offices. To appease them, the bill “ends” the capitol expansion, by preventing light rail from traveling directly next to the capitol. But the line can simply go around on another street, most likely on Van Buren. All this does, is it prevents them from seeing it… only when they are on the capitol grounds.
Let’s not mince words: this move was snobby and pretentious. Even if you’re an opponent of light rail, this is an undeniably bad look. I know people who hate wide roads, 20-lane highways, and huge parking lots. But I’ve never met a person who felt that they were “too good” to even look at them, or the plebians that use them. This move is about elitism, not wasteful spending. Public transit is much more cost-effective when its not captured by political moves like these.
Accountability Metrics
During the pandemic, public transit ridership and farebox recovery rates (% of expenses paid by user fees) decreased dramatically, and in most areas, have still not fully recovered. Dismayed by this, Republican leadership pushed for a farebox recovery audit that requires the Valley Metro system to have 10% farebox recovery by 2028, 15% by 2029, and 20% by 2032. If these metrics aren’t hit, Valley Metro will have to demonstrate that it’s getting the necessary funding to supplement missing fare revenue, from a source other than the transit tax.
These standards are both tough and reasonable, and will hopefully lead to quality of service improvements for the valley’s transit network. From personal and professional experience, I’ll say that Valley Metro has big issues with broken fareboxes and ticket machines (and other performance indicators too). Cities have also done a poor job at cultivating new development near the light rail. Any accountability measure is by definition, a hurdle, or a hoop to jump through. But, hopefully these performance standards will push electeds and bureaucrats alike to get serious about making an efficient transit system.
I will note that the Valley Metro’s cost per boarding data shows that the light rail is (roughly) 2x more cost-effective than its bus network. While initial costs for rail are high, legislative Republicans are doing a disservice to their cost-effectiveness push by shifting money from light rail towards buses. Bus Rapid Transit could be a solution to this, but ironically, heightened fears over road diets from themselves could also get in the way. If we want cost-effectiveness, we have to make service better, and we have to look at the data. The push for accountability on Valley Metro is good. But the policy knowledge to get it is not there yet.
Final Outlook
This version of the tax extension has 3.5% less funding for public transit than what was vetoed last year, but it has 4% more funding than the original Prop 400. There are barriers and challenges, but it’s nothing that can’t be overcome with the right leaders.
Also, I want to be very clear: It is not true that new road diets, light rail lines, streetcar extensions, bus lanes, are prohibited in Maricopa County as a result of this bill. However, it may be the case that transportation tax monies cannot be used for them, as I outlined before.
I don’t think MAG would support a proposal that would upend their plan for Prop 400E. But that doesn’t mean that we can taken everything as given. New transit projects may require some shifting of what that the county’s tax pays for, what the cities pay for, and so on. And it may not be possible to do without some extra help. But at the end of the day, we are in the same position, which is that public transit in the valley needs a lot of work. Light rail and public transit will not be crushed by changes to the transportation tax. But it could be by decision makers who don’t invest in making Phoenix a world-class city.
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Headline photo from Steven Vance.