9
But in the 1980s, abrupt changes occurred regarding how California finances
transportation. The punctuated policy equilibrium occurred in the early to mid 1980s caused by
the impacts of the tax revolt and Proposition 13.
Transportation Finance and Punctuated Equilibrium
The policy subsystem for transportation finance in California faced many subsystem
challenges over its six decades in existence. During its tenure, California experienced massive
population growth during the 1980s and 1990s, growing from 24 million people in 1981 to
34 million in 2000 (DOF). The massive increase in population exacerbated existing problems on
California’s freeways and roads by doubling the number of vehicle miles traveled from
approximately 150 million in 1980 to over 300 million miles traveled in 2000 (BTS), which in
turn led to massive increases in vehicle hours of delay (Schrank and Lomax 2003).
While transportation pressures were growing, revenues were shrinking at the state level.
The purchasing power of the gas tax began to decline due to its per gallon nature and the
increasing fuel economy of cars (Adams et al. 2001, Brown et al. 1999, Wachs 1997), leading to
massive revenue shortfalls at the state and local level when coupled against the increasing cost of
delivering capital improvement projects.
2
The aforementioned challenges, however, did not lead
to the punctuated equilibrium of the transportation finance system. It was not until the adoption
of Proposition 13 in 1977 that the policy subsystem would be compromised.
Proposition 13, approved by the voters of California in 1978, curbed the increase of the
property tax in California and marked the beginning of the national tax revolt. As a result, the
taxation mix at the state level was turned upside down, leading to the increased dependence on
the income tax and other alternative revenue mechanisms, including the local option sales tax.
2
Wachs (1997, 59) estimated that construction inflation “rose by a factor of six in the seventies and a factor of eight
in the eighties” due to “rising costs of land for highway rights-of-way, labor and materials for highway construction,
and costs to comply with increasing environmental cleanup and environmental review requirements.”
Convention