Utility Fee to Fund Transit in California

Transportation Utility Fees (TUFs) are being used by several jurisdictions in the US to fund transportation infrastructure. A TUF is based on the principle that transportation is a utility like water and electricity; therefore, transport users should pay for the cost of using transportation infrastructure and services like they pay water and electricity charges. Use of TUF revenues for developing and maintaining transit systems has the potential to provide mobility options to low-income families, move people away from cars into public transit, and promote walk/bike trips; thereby reducing traffic congestion and greenhouse gas (GHG) emissions.

While the use of TUF is still modest, it has grown in the last two decades, from 10 jurisdictions—nine in Oregon and one in Florida—in early 1990s, to over 30 jurisdictions across five or more states (Arizona, Kansas, Oregon, Texas, and Utah) by mid-2010’s.

The biggest challenge to the use of TUF is to prove that it is a fee, not a tax. Indeed, in four instances, state supreme courts struck down TUFs, ruling that they are a tax; and the Florida State Supreme Court ruled TUF unconstitutional because, among others, it was not authorized by state statutes. Therefore, great attention needs to be devoted to TUF basis, design, and calculation methodology to ensure a) it qualifies to be a fee and b) it is authorized under state statutes.

Therefore, through literature review, interviews, and in-depth examination of about six case study TUFs, this project seeks to examine the feasibility of employing TUF to fund transit infrastructure and services in California, including the feasibility of leveraging TUF to meet state’s GHG emission reduction goals. If TUF is deemed feasible, this project aims to propose the enabling legal framework, key design features, and implementation mechanisms for employing it.

Principal Investigator: 

Dr. Shishir Mathur

PI Contact Information: 

Mineta Transportation Institute
San José State University
210 N. 4th St., 4th Floor
San José, CA 95112
shishir.mathur@sjsu.edu

Project Number: 

2032