Transportation Funding on a Crash Course

by Gary Toebben

In September of last year, Gov. Jerry Brown signed an important bipartisan pension reform bill designed to increase the retirement age for new employees, cap the annual payout, eliminate numerous abuses of the system and require workers who are not contributing half of their retirement costs to pay more. The Public Employee Pension Reform Act affects all state public workers hired after Jan. 1, 2013, as well as local governments that participate in the State's pension funds. It was an important first step towards reducing the hundreds of billions of dollars in underfunded pension liability.

Among those affected are the transit unions, who appealed the reforms to the U.S. Department of Labor (DOL), claiming that this change was not negotiated and is therefore inconsistent with federal law. The DOL ruled in favor of the unions and informed Gov. Brown that the State has until Aug. 16 to comply with federal law, or risk decertifying California transit agencies as grant recipients for federal dollars.

The impact of this ruling could be devastating to Los Angeles and undermine what we set out to accomplish through the passage of Measure R in 2008 and the inclusion of America Fast Forward in the federal surface transportation bill in 2012. Transit funds lost to L.A. County would exceed $2 billion. That’s a loss of $856 million for the Westside Subway and $160 million for the Regional Connector, plus more than 1 billion dollars for other projects like the Orange Line expansion, Expo Phase I operations, bus acquisitions and necessary preventative maintenance.

Los Angeles has earned national recognition for our innovative transportation work over the last decade. We cannot risk the loss of these federal funds sending us backwards. Gov. Brown, labor unions and the federal government have until this Friday to come to an agreement that will not jeopardize the funds, jobs and quality of life that comes from transportation infrastructure investments throughout California. It is essential that all parties stay at the table to quickly find a resolution that continues the federal share of transportation investment in California and L.A. County.

And that's The Business Perspective.