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Local option sales taxes

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A '''local option sales tax''' is a tax designated for a special purpose, levied at the citywide or countywide level. In the last several decades California has made ample use of LOSTs to fund the expansion of public transit. LOSTs usually take the form of an extra percentage appended to the standard sales taxand, and as with all new revenue increases in California, must be approved by anywhere from a majority to 2/3 super-majority of voters. This super-majority requirement was the result of a 1997 court ruling that applied California's super-majority requirement to LOSTs. In 2015, local funding was the single biggest source of transit revenue in California (40.1% of all revenue). In Fiscal Year 2014-5, revenue from LOSTs eclipsed revenue from passenger fares for the first time since FY 2006-7. Most LOSTs have specified lives and include a sunset date. In California, only five proposed LOSTs have been permanent, and of those, only four have passed--all in Los Angeles County. (Measure R initially included a sunset date, but Measure M made it permanent in 2016.)
== History ==
* Specific lists of transportation projects. LOST revenues may only be used to fund specific programs, which limits politicians' ability to divert money to other projects. Voters know exactly what they are getting up front.
* Local control over revenues.
=== "A California Invention" ===
Wachs calls LOSTs "a California invention." Its context derives from Proposition 13, which reduced the amount of property tax revenue available. As of 2019, California has more measures than any other state, a longer history than any other state, and has both more money needed and more money raised than any other state. Within California, Los Angeles County has the most measures--four are currently in place--and raises the most money through LOSTs of any county.
== A New Politics of Transportation ==
=== Political Feasibility ===
Many measures have failed on their first attempts and then succeeded as second, third, or fourth tries. Mineta Transportation Institute research by Asha Weinstein Agrawal and Hilary Nixon shows that, nationally, people tend to vote for measures when they can clearly link benefits with their taxes, especially those with a local focus. Additionally, voters like to see provisions for government accountability. Some examples of this include public reporting requirements, review panels, and sunset dates. Voters seem especially enthusiastic when measures promise environmental and health benefits.
=== Political Finance ===
LOSTs have shifted the political nature of transportation finance. For example, in Riverside, Orange, and San Diego counties, environmental groups like the Sierra Club and NRDC vehemently opposed some early LOST measures. At the time their argument was that roads destroy the environment. In later measures, however, those same counties committed to spending money on acquiring land to mitigate transportation impacts on the environment under the Endangered Species Act. The environmental groups then encouraged their members and the public at-large to vote ''for'' those measures. The measures passed. Transportation advocates did not want to spend "transportation money" to protect the kangaroo rat, but they wanted the measure to pass, so they included a provision for protecting it.
=== Designing to Win ===
This concept has become a new way of designing LOSTs to win the super-majority vote. To do this, transportation planners spread the money geographically, especially to highly populated areas, so that enough votes are won to pass the measure. Additionally, they must spread the money across modal interests--not only highways and rail but also bikes, pedestrians, ferries, and services for the elderly and disabled. They must also spread the money over time but with care to ensure each constituency gets some early benefits. And lastly, they must balance among capital projects and operating projects to promise relief on many fronts for many interests.
== Criticism ==
Wachs writes that LOSTs are "gradually but inexorably changing the way we finance transportation systems" by abandoning the principle of "user pays." Economists generally agree that "user fees have at least some tendency to induce more efficient use of the transportation system," unlike sales taxes which apply to all citizens equally. (Think of fuel taxes incentivizing drivers to buy hybrid or zero-emissions vehicles, or congestion pricing helping to smooth traffic flows in busy city centers.)
Finally, Wachs writerswrites, "While transportation planners and engineers often apply analytical procedures like cost-benefit analysis to determine which investments should be selected, ballot measures...substitute election campaigns—sometimes called "beauty contests"—for analysis." This can distort priorities towards prestige "ribbon-cutting opportunities" and away from the nuts-and-bolts qualities of good service.
== List of Major California LOSTs Since 2000 ==
''All LOST information from''
[[Category:Finance and revenue]]
Bureaucrats, emailconfirmed, engaged

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