There is an insightful admission hiding in the City of Sacramento General Plan 2040 update. In the Mobility Element, A Multimodal System section, Maintenance and Funding subsection (page 8-8), “A key challenge for Sacramento is that existing revenue streams do not fully cover operations and maintenance costs, and this same funding is also used to support implementation of improvements for safety and mobility throughout the city.”

Revenue does not cover expenses. Liabilities exceed assets. The city is bankrupt, just as you would be in this situation. Some asset of yours, like your house if you own one, or your business if you own one, is deteriorating, and you do not have the income to fix it. In the case of the city, it has incurred debt in order to build a transportation network that it cannot possibly maintain under the current taxation regime. And it never will. Never. If the city raised taxes, of whatever type, to the point they would pay for debt service and maintenance of the existing system, people would revolt. And that does not even include the new transportation infrastructure that some people would want. The city’s transportation system is bankrupt. It always will be. The core of the reason is that the city asked developers to pay for transportation infrastructure within a development, but then the city takes on liability for maintenance of that infrastructure. It all looks good for about 30 years, until things start to fall apart. The streets need repaving. The sidewalks are cracked. Painted lines and crosswalks have long since faded to invisibility. Not to mention what lies beneath (water and sewer), which is even more expensive to fix. For an in-depth explanation of how cities and counties and states got into this situation, I can recommend Confessions of a Recovering Traffic Engineer: Transportation for a Strong Town, and Strong Towns: A Bottom-up Revolution to Rebuild American Prosperity, both by Charles Marohn of Strong Towns. In fact, just in time for my post, an article today on Strong Towns: Why Cities are Flying Blind When It Comes to Their Own Debt.

So, what to do?

1. Don’t bond anything again. We don’t need more roadways, or wider roadways, or interchanges. We don’t need big projects. Pay for maintenance of what we have, out of current income. This also means that we would never again bond against future income for current funding, as the city has done with parking revenue.
2. Figure out what we can’t afford to maintain, and have that discussion with the public. I’d suggest that we can’t afford to maintain parking areas, whether on street, surface lots, or structured parking. Parking has never paid for itself and never will, and if we have to triage our transportation spending, it should be the first to go. Next would be cut-de-sacs and intentionally dead-end streets.
3. Change accounting and budgeting so that transportation infrastructure shows up as a liability in accounting and budget, because it must be maintained forever, rather than as an asset.
4. Cease accepting responsibility for new roadways built by developers. If a developer wants infrastructure, they can pay for it, and maintain it, forever, by setting aside reserves to cover the necessary maintenance. This would result in gated communities, which I definitely do not like, but a gated community is better than fiscal bankruptcy. It would also result in far, far fewer greenfield developments, since the financial model for these is that society will take on maintenance responsibility, and will build the surrounding infrastructure of arterial roads and highways that the development must have to pencil out. That is all to the good.
5. Wean the city off of federal, state, and regional grants. Not all at once, but decrease the percentage of transportation projects that depend on outside money. This would mean even less money for transportation in the city, but it would force the city and citizens to look at what is really important, to individuals and society, and spend on the things that are really important. I hope that safety comes out at the top, and that we spend on transforming out transportation system from the current one that kills and maims people to one that protects vulnerable users first and foremost.

Note that the city is bankrupt in many ways, not just transportation. But transportation is my thing, so that is what I focus on.