Abstract

This report examines the performance measures requirements in California’s Transportation Development Act (TDA) of 1971. The TDA is an important source of funding for the state’s public transit agencies, representing approximately 18 percent of their total (2018) revenue between the TDA’s two funds (LTF and STA). Since the TDA’s passage in 1971, the transit operating environment in California has changed, in some cases dramatically. The state has nearly doubled in population (20.4 million in 1971 to 39.8 million in 2019), traffic has worsened considerably, climate change is now a central public policy focus, and many places around the state are investing heavily in making public transit a viable alternative to driving. Our research examined the TDA’s performance requirements and their effects on the state’s transit operators. The research team also considered alternative approaches to both transit finance and performance requirements, by studying transit funding programs in 13 other states that invest significant amounts of funding in transit. In brief, the team found that the TDA’s use of performance measurements to allocate funding is unusual. The states that were studied do not for the most part make funding contingent on performance, thereby avoiding the unproductive and difficult-to-implement “death penalty” (Taylor, 1995) of withholding subsidies for a much-needed public service. In several of the cases analyzed, by contrast, states guarantee specific levels or amounts of funding for transit service. To examine how the TDA’s performance measures are working, the research team conducted a survey of California transit professionals at agencies and at Regional Transportation Planning Agencies (RTPAs). That California’s aspirations for transit have evolved over the years is reflected in the frequent loopholes and exemptions the legislature has added to the TDA to give struggling operators more latitude to receive funding in order to meet multiple goals and objectives while staying in compliance with a single cost-effectiveness goal. The extent and frequency with which these exemptions have occurred suggests that the larger aims for public transit, and indeed the goals for the TDA program itself, have evolved, and need to be re-thought holistically, rather than incrementally. Accordingly, the report offers six recommendations concerning transit performance assessment in the TDA.