Do Equity and Accountability Get Lost in LOSTs? An Analysis of Local Return Funding Provisions in California’s Local Option Sales Tax Measures for Transportation

Abstract:

This study explores how local return provisions of local option sales taxes (LOSTs) for transportation are allocated and spent to meet local and regional transportation needs. Local return refers to the component of county LOST measures that provides funding directly to municipalities in the county to be used to meet local needs. Local return has become a fixture in LOSTs; 58 LOST measures placed on the ballot in California (as of 2019) that have included local return in their expenditure plan have an average of 35% of revenues dedicated to local return. Local return provisions in the ballot measures often contain guidelines on how a portion of the money should be spent. The allocation of local return funds to localities has rarely been discussed in research, and spending decisions have to our knowledge never been analyzed. This paper conducts a mixed-methods analysis of all LOSTs with local return, relying on ordinances and other public documents related to local return expenditures, and supplemented with interviews with officials in six counties. Findings indicate that local return provisions are crafted to balance the needs of the county across different dimensions, including trying to achieve equity between urban and rural residents, investment in different transportation modes, and meeting both local and regional policy needs. Moreover, significant accountability mechanisms provide regulations to ensure that funds are distributed to and spent by jurisdictions as promised by the measures. Overall, this research finds that local return is a vital part of LOST measures in California, allowing cities to meet local needs ranging from maintenance of local streets to funding for special programs, while simultaneously aligning local investment with regional priorities.

Publications:

Do Equity and Accountability Get Lost in LOSTs? An Analysis of Local Return Funding Provisions in California’s Local Option Sales Tax Measures for Transportation (Full Report)

Research Brief

Additional Resources:

Supplemental Materials/Dataset (zip file)

Authors:

JAIMEE LEDERMAN, PhD

Jaimee Lederman earned her PhD in Urban Planning at University of California, Los Angeles (UCLA), concentrating in transportation planning and policy. She most recently worked as a Senior Public Administration Analyst at the Institute of Transportation Studies at UCLA. Before coming to UCLA, she received a JD and a Master of Arts in Economics from NYU, and she is a member of the New York State and District of Columbia Bar Associations.

STEPHANIE KELLOGG, MURP

Stephanie Kellogg completed her Master of Urban and Regional Planning at UCLA with a focus in regional economic development. Her interests involve land use policy and political economy.

PETER J. HAAS, PhD

Peter J. Haas is Professor Emeritus at San José State University. He is the author of numerous articles and research monographs on transportation policy as well as the coauthor of the second edition of a text on policy research, Applied Policy Research: Concepts and Cases.

MARTIN WACHS, PhD

Martin Wachs is Distinguished Professor Emeritus of Civil & Environmental Engineering and City & Regional Planning at the University of California, Berkeley, where he directed the Institute of Transportation Studies and the University of California Transportation Center. He earlier spent 25 years at UCLA, where he was Chairman of the Department of Urban Planning for 11 years. After retiring from the university, Wachs became the Director of Transportation, Space, and Technology Program at the RAND Corporation. He now teaches and conducts research at UCLA in transportation policy.

ASHA WEINSTEIN AGRAWAL, PhD

Dr. Agrawal is the Director of the MTI National Transportation Finance Center and Professor of Urban and Regional Planning at San José State University. Her research and teaching interests in transportation policy and planning include transportation finance, bicycle and pedestrian planning, and travel survey methods. Agrawal also works in the area of transportation history. She has a BA from Harvard University in Folklore and Mythology, an MSc from the London School of Economics and Political Science in Urban and Regional Planning, and a PhD from the University of California, Berkeley, in City and Regional Planning.

Published:

February 2021

Keywords:

Transportation

Finance

Local government

Sales tax

Local return