should voter-approved transit taxes be spent in transit?

You'd think that once you ask your local voters to approve a tax specifically for transit, you owe it to the voters to spend the money on transit.  Apparently that's not how it works in Houston, as Houston Tomorrow president David Crossley explains.  

Metro receives local money from a 1-cent sales tax that was approved by voters when the agency was created in 1978. In 1987 then-Mayor Bob Lanier [of the City of Houston] began taking 25% of that money away from Metro annually to use as he saw fit. That included funding design work for the so-called “Grand Parkway,” which is now under intense construction in order to pull population away from the City of Houston and all the other towns and cities in the region.

I have some sympathy for these funding diversions.  Sometimes voters haven't approved levies for what is really needed at the moment, and the only way to keep things going is through.  Sometimes, too, these diversions really are "loans" that get paid back.

But when a diversion is used to fund a competing capital project, the obvious question is:  "Why not ask the voters if they want to fund that project?"  That, question, too, may have a valid answer, and I hope Houston readers will explain it in the comments.

UPDATE:  A Houston reader offers a competing narrative.

I'll be doing a public lecture and discussion in Houston on May 14.  See info under my photo –>

9 Responses to should voter-approved transit taxes be spent in transit?

  1. Paul K McGregor May 2, 2012 at 6:23 am #

    I agree with you. When the referendum passed in 2003, it was supposed to give momentum to getting rail and BRT lines going. But senior management felt that they could circumvent regulations and now it’s creating further funding issues for them. Now it will be 2014 before they see their first rail extension, 10 years after the first line opened, and that’s a maybe. If I had voted for this, I would not feel very happy about the outcome.

  2. Andre Lot May 2, 2012 at 8:35 am #

    I think that once an earmarked tax stream is diverted to non-authorized purposes, the whole purpose of having approved the tax first place is rendered moot and the tax should be scrapped.
    Otherwise, it becomes just a cynical way for municipalities (or even State governments) to make up budget decisions, albeit sensible, while avoiding the political costs of having supported a “tax raise”.
    This being said, I think a more sensible way is to create earmarked funds that can lent or borrow money against a specific earmarked tax, more or less like the 10/30 program in Los Angeles. That way. But diverting funds for general operation budget should be outlawed, and so should be using it for purposes clearly not stated on the motion that approved the specific tax.
    What happens is that politicians often promise to deliver too much with too little money. Then, you end with capital projects whose own financial costs of long-term borrowing makes then unworkable given the meager tax stream earmarked for them.

  3. Progressive Capitalist May 2, 2012 at 8:50 am #

    St. Louis County has done the same thing with its original half-cent sales tax, using it regularly for highways, not just any one project. Voters then went on to approve yet another sales tax just for transit. Fortunately, the new tax hasn’t been raided. But if the original one had only kept true to its original purpose, then maybe the tax burden would be less. Otherwise, why didn’t they just put a separate sales tax explicitly for highways to the voters?

  4. david vartanoff May 2, 2012 at 10:50 am #

    Trusting the bureaucrats to honorably re-allocate the funds assumes they have the best interests of transit users in mind. Unfortunately in the SF Bay area we have a less felicitous history.

  5. Tom Rubin May 2, 2012 at 11:44 am #

    There is a very sad misrepresentation here. When Houston Metro was authorized by the voters in 1978, the ballot issue included a 1% sales tax for transit ONLY.
    However, in 1988, Metro went back to the voters to shift 25% of that to roads and the voters approved. This was again approved by the voters in 2003.
    Was “then-Mayor Bob Lanier” a primary cause of this? Well, no — he wasn’t the mayor then, he was the Metro Chair.
    The background of this is that, based on his extensive experience in management, transportation, and government, he was made Metro Chair by the actual then-Mayor in order to clean up Metro, which had developed a very bad reputation with the voters and general public. He quickly concluded that a major part of the problem was the agency’s excessive preoccupation with rail transit, including bringing a rail implementation plan to the voters, which failed — not because the voters didn’t want to raise taxes, because the taxes had already been approved, but because the voters did like the plan and didn’t trust the agency. Part of the reason for switching the 25% was that, without any rail plan or any reasonable prospect for one, Metro was sitting on a big pile of money with nothing worthwhile in transit to spend it on — and part of it was, if the money had not been repurposed for roads, there was a good chance that the voters would instead have been voting on just plain reducing it, or the Texas legislature may have done that itself.
    The Mayor who appointed him didn’t care for some of his later recommendations, so she fired him — so he ran against her in the next Mayorial election (1991), and beat her, based in large part on his focus on transportation issues.
    The story behind the 2003 election is even more complex, but the outcome was, the voters were asked if they wanted 25% of the sales tax to go for roads, and they said yes.
    … and if you had a vote in Houston today, asking the voters if they had gotten more benefit out of the 25% that went for roads or the 75% that went for transit, it wouldn’t even be close.
    Mr. Crossley’s piece is a very significant misrepresentation of what actually occurred in Houston with the transportation sales tax. It is not factually incorrect to state, as he did (in the article the story above cites from), that “This is NOT what voters established Metro to do when it was created in 1978” (quoting a 2009 blog posting by Minister Robert Muhammad), but it is equally valid to say that spending all of the 1% sales tax on transit is NOT what voters established Metro to do when they voted in 1988 and 2003.
    Not likely a law, or not liking a change to a law, is quite a bit different from that law being improper or that the people who implemented the law you didn’t like were somehow doing something improper — so, if you think that 25% should be repurposed back to transit, that’s your right to say and support, but let’s try to not change history all that much, at least after the fact.
    Tom Rubin

  6. Eric Doherty May 2, 2012 at 12:56 pm #

    Taxation and funding issues do tend to be messy. But the main point it that roadway expansion competes with and undermines transit. Agencies need to be very clear that ‘balanced transportation spending’ means undermining transit ridership and cost effectiveness.
    I also wonder about the issue of rail transit, seems to me that Houston is the kind of place crying out for bus rapid transit. (And where it would be hard to find more than a couple of places where new rail lines really make sense)

  7. Thomas B. Gray May 3, 2012 at 11:17 pm #

    I might have a minor quibble with Mr. Rubin’s assertion that Bob Lanier’s victory over Kathy Whitmire in the 1991 mayoral election was “based in large part to transportation issues:” while transportation was certainly an issue in the 1991 election, I recall that it was dwarfed by concerns over crime (the city had experienced a surge in crime in the late 1980s and had over 600 homicides in 1991 alone) as the dominant issue of the campaign. That aside, Rubin is correct regarding the provenance of the diversion of a quarter-cent of metro’s transit tax to general mobility funds: the voters specifically approved it in 1988 and again as part of the 2003 METRO Solutions referendum.
    It’s important to note that many of the smaller cities in METRO’s service area have come to depend on their share of these general mobility funds to pay for road construction in their municipalities. For these towns, many of which are small residential enclaves surrounded by the City of Houston, losing this stream of funding is a major concern to them, as this article attests:
    Jarrett, I look forward to meeting you on the 14th!

  8. Kenny May 4, 2012 at 8:11 pm #

    What about cases like LA’s Measure R and California’s high-speed rail? In both cases it seems likely that there will be some divergences from the plan as originally marketed to voters (in the case of CAHSR of course, it’s still unclear whether the plan will even make it that far). Of course, the changes to the LA transit plan are quite minor, and cutting out Anaheim and/or Sacramento on HSR is still not a significant diversion of funds. But there’s a sliding scale.

  9. NJ R May 15, 2012 at 7:47 am #

    We had a half-penny transit tax in Miami, only to watch new routes eventually cut, planned improvements never built, and money diverted to all sorts of nonsense like cockroach extermination and office equipement.
    Also, there was never even a pretense of an organized transit plan. Also, the venality of our city officials is legendary. Also, the cost estimates were wholly absurd, across the board. Also, part of the money had to go to taking the transit system from being grossly underfunded to merely sadly underfunded.
    An unqualified failure, of course. Worse, good luck getting these voters to fund transit, ever again.