Archive for the ‘Smart Growth’ Category

2014: A Landmark Year for Subsidy Accountability

January 14, 2015

Two-thousand fourteen was a banner year for our movement, hands down. The first move to require standardized subsidy-cost reporting! The first half of a legally-binding two-state cease fire deal! The first state ban on tax-break commissions! A big surge found in state disclosure of subsidies! Big improvements to our Subsidy Tracker, enabling first-ever mash-ups! And a governor apparently shamed to stop his partisan job piracy forays!

GASB Finally Weighs In: After a decades-long conspicuous absence, the Governmental Accounting Standards Board (GASB) announced in October that it would soon issue a draft standard to require states and localities to account for the revenue they lose to economic development tax breaks.

This is a truly tectonic event in the decades-long struggle to rein in corporate tax breaks. When states and localities start issuing the new data in 2017, we predict it will enable massive new bodies of analysis and policymaking: in state and local finance, tax policy, government transparency, economic development, regionalism and sprawl, public education finance, and campaign finance.

The day the Exposure Draft was published on October 31, we swung into action, issuing a critique of it, speaking on two webinars and answering many queries. We are posting exemplary comments here.  If you haven’t filed a comment with GASB yet, the deadline is January 30. Contact us ASAP if you need help.

FASB Enters the Debate, Too! In late December, GASB’s sister group, the Financial Accounting Standards Board (FASB), which effectively regulates private-sector bookkeeping, revealed that it too is debating whether and how to require disclosure of state and local tax breaks by the recipient corporations. The FASB process is well behind that of GASB, but this is equally tectonic.  See “Disclosures by Business Entities about Government Assistance.”

Missouri Enacts Half of a Bi-State Cease-Fire: In July, Missouri’s “red” legislature and “blue” governor agreed on legislation that is the first time a state has enacted a legally binding half of a two-state “cease fire” in the economic war among the states. Kansas has until July 2016 to reciprocate: the ball is in your court, Gov. Sam Brownback!  Credit for this victory belongs to a group of 17 Kansas City-area businesses, led by Hallmark, who went public in 2011.

Disclosure Found in 47 States plus DC: In January, we issued our latest 50-state “report card” study on state transparency of company-specific subsidy data. We found that only three states—get with it, Delaware, Idaho and Kansas!—are still failing to disclose online (more than double the 23 states we found disclosing in 2007). But we also found that reporting of actual jobs created and actual wages paid is still lagging: only one in four major state subsidy programs discloses actual job-creation outcomes and only one in eleven reports wages.

First-Ever Ban on Tax-Break Consultant Commissions: In September, California became the first state to ever ban consultant commissions on an economic development tax break. It’s a reform we have long called for and would become commonplace if states registered and regulated tax-break consultants as lobbyists.

Subsidy Tracker “2.0” Upgrade: In February, we unveiled a massive upgrade to Subsidy Tracker, linking more than 30,000 subsidy awards to their ultimate corporate parents and issuing “Subsidizing the Corporate One Percent,” showing that just 965 companies have received three-fourths of recorded subsidy dollars. Later in the year, we mashed up Tracker data with the Forbes 400 and with low-wage employers to reveal more than $21 billion in subsidies fueling economic inequality.

Perry Quits Partisan Job Piracy: 2014 was also notable for what didn’t happen. After our September 2013 study chastising Texas Gov. Rick Perry for making interstate job piracy a partisan sport and for issuing deceptive disclaimers about who funded his highly publicized trips to six states with Democratic governors (Texas taxpayers are footing part of the bill)—and a follow-up blog basically daring him to do it again—he never did, and will leave office January 20th.

Truth in TIF Taxation: In July, Cook County, Illinois started showing property taxpayers how much (in both dollars and percent) of their taxes are going to tax increment financing (TIF) districts, the largest jurisdiction known to be doing that in the U.S.

Property Tax Losses Revealed: In studies covering Chicago and Memphis, we revealed that property tax losses—either to TIF in Chicago or PILOTs in Memphis—are costing enormous sums that could be meeting other needs: 1/10th and 1/7th, respectively, of their entire property tax bases. The studies helped block a tax hike in Chicago and changed the debate in Memphis.

Privatization Slowed: Only one more state privatized its economic development agency: North Carolina. After our October 2013 study, Creating Scandals Instead of Jobs, documenting scandals nationwide, provoked editorials in three of the Tarheel State’s leading newspapers, Gov. Robert McCrory’s plans to fast-track a new privatized entity were slowed. It was later created, but with many of the safeguards we recommend if a state chooses such a structure.

Transit Investments as Economic Development Done Right: In case studies in St. Paul and Normal, Illinois, we documented the broad job-creation benefits for more than a dozen Building Trades crafts when transportation investments build transit hubs that spur massive new transit-oriented development. We even gave cautious approval to Normal’s use of a related TIF district.

It was also the year Tesla ran a five-state public auction for a battery plant. Kudos to the Progressive Leadership Alliance of Nevada, California Budget Project, Southwest Organizing project in New Mexico, Arizona PIRG and Texans for Public Justice who staged a high-profile outcry with us, calling out Tesla for its Old Economy whipsawing behavior. Ultimately, Nevada overspent for the trophy deal at $1.3 billion and will go down in history as the birthplace of what we dubbed the “tax credit capture zone,” a new benchmark for tax-break greed.

Almost a Record Year for “Megadeals.” As we found in an update of our “Megadeals” study and entries in our Subsidy Tracker database: we now have 298 such deals documented over $60 million and some over $1 billion. Only 2013, with its record Boeing megadeal of $8.7 billion, cost more than 2014.

Finally, 2014 was the year we said goodbye to Bettina Damiani after her stunning 13-year streak of achievements at Good Jobs New York: the best local disclosure law in the country (won in 2005 and later improved); an online database of >41,000 deals; a radical overhaul of the process by which the NYC IDA relates to the public (enabling project interventions from diverse grassroots groups); $11 million in improper rent deductions disgorged by the New York Yankees; a racetrack defeated on Staten Island wetlands; and assistance to hundreds of community groups, unions, environmentalists and journalists challenging the status quo. One of Bettina’s tangible legacies: the space for new mayor Bill de Blasio to do things like saying no to JP Morgan Chase’s demand for $1 billion to move across Manhattan (with our database documenting its huge past subsidies and job shortfalls).

If you like what we do, please support Good Jobs First: we have a lot in the works for 2015, too!

$2.6 Billion Spent on Cleaning Up DC Rivers Must Address Local Job Creation

June 7, 2013

SinkorSwim_WebBoxOver the next decade, DC Water will use a regressive Impervious Area Charge (IAC) to fund $2.6 billion in needed water infrastructure investments. Middle- and low-income residents and neighborhoods will carry the highest burden of the DC Water fee increase that will pay for these improvements.

Despite the fact that the funding burden of these projects falls heavily on the most vulnerable residents, DC Water has not implemented a local hiring agreement, even though putting residents to work on the project may be the best way to reduce the harm of a regressive fee. These are among the findings of Sink or Swim? Who will pay and who will benefit from DC Water’s $2.6 billion Clean Rivers Project?, a study published this week by Good Jobs First.

More coverage of the report can be found over at the Washington Post and the Washington City Paper’s Housing Complex Blog.

Cities rarely spend so much — $2.6 billion — on infrastructure projects. A strong Community Benefits Agreement could make this public infrastructure investment provide a jobs stimulus benefit to District residents without spending an additional dollar. A proposed Community Benefits Agreement (CBA), like the District’s amended First Source Law, would establish a minimum percentage of work hours that must be performed by District residents, increasing to 50% over the next decade.

The report was commissioned by the Washington Interfaith Network (WIN) and The Laborers’ International Union of North America (LIUNA).

Among the major findings:

  • The impact of the IAC – measured as a share of 2013 property taxes – will be four- to five times greater for homeowners in poor neighborhoods than for those in affluent neighborhoods.
  • Small businesses, especially those east of the river, will feel a heavy burden from IAC fees. Office buildings on K Street will feel little impact.
  • There is no indication that District residents will benefit in proportion to their burden. Contractors on major DC Water projects currently employ more North Carolinians than residents from Wards 7 & 8 combined. Over half the contractor workforce lives outside Washington, D.C. and its immediate surroundings.
  • Continued failure to hire local residents will result in a massive transfer of wealth out of the District. We estimate that over the next thirty years, D.C. ratepayers will be billed $4.2 billion in IACs, including $1.1 billion from Wards 7 and 8 alone.

District residents will pay for these infrastructure investments through a regressive fee for the next thirty years. Low- and middle-income residents will be hit the hardest. These are neighborhoods that have historically been excluded from opportunities in construction careers; to not leverage $2.6 billion in public spending for District construction careers would represent a tremendous missed opportunity.

Colorado Stock Show Wants Bucks to Sprawl

September 1, 2011

The location of the future Gaylord convention center complex.

The already controversial proposal to construct a massively subsidized convention center complex outside Denver has become even more divisive following an announcement by the city’s long-running National Western Stock Show that it was considering relocating to the site.

The new hotel-convention center complex in Aurora County, currently under development by Gaylord Hotels, is located near the Denver International Airport.   It is receiving up to $300 million in development subsidies via tax increment revenues from Aurora, whose City Council just approved a blight designation for the 125-acre site, now completely vacant land.  The company has also applied for a raft of state subsidies that include $170 million in sales tax rebates over a 30-year period.

Concerns that the 1,500-room complex will leach convention center and hotel business and tax revenues away from Denver are turning out to be well-founded in light of the National Western Stock Show’s announcement that it is considering a site adjacent to the new development for its annual events.  The show, which is celebrating its 106th anniversary this January, is considered a Denver institution.  (Its Centennial celebration drew 727,000 people.)   Denver voters will need to approve $150 million in general obligation bonds to finance the show’s move to Aurora.  Complicating matters further is the fact that the show benefited from $30 million worth of voter approved bonds in 1989 to upgrade its current facilities at the Denver Union Stockyards.  Under the terms of that contract, the organization is required to stay at its current address in Denver until 2040.

The stock show’s announcement has roused a series of accusations from Denver electeds that the organization is in breach of its existing bond contract.  The contract stipulated that the stock show must maintain the upkeep of its facilities, which have fallen into disrepair according to city council members.   The stock show was additionally required to submit annual reports to the city.  Stock show officials state that these were submitted annually to the city’s Theatres and Arenas Department, but this has not stopped City Auditor Dennis Gallagher from accusing the organization of failing to provide his office with financial reports.

Gallagher recently released a statement lambasting the organization:  “I refuse to see our city, our downtown business, our convention center, our historical heritage and the welfare of Denver taxpayers sold down the river because of over-arching greed.”  Other officials have reacted in kind.  City Council President Chris Nevitt accused the show of “fail[ing] to live up to [its] end of the bargain.”  The heart of the issue was best expressed by Aurora resident Shirley Ney:  “As I look at this land out there, I do not consider this land as blighted,” she said. “I think it’s very valuable land … valuable agricultural land is being eaten up by urban sprawl across this country. This proposal adds to that sprawl.”

Sadly, the wisdom of this sentiment may be lost on the National Western Stock Show, which represents an entire industry dependent on agricultural land.  The problem of subsidizing the development of greenfields is twofold.  It exacerbates the problem of sprawling growth and its associated regional costs, while simultaneously providing an unnecessary financial incentive for businesses to withdraw from the urban core.  A stampede of Denver’s urban businesses to Aurora may become unavoidable when such extravagant development subsidies are involved.

The Recovery Act: The Transparency Gift that Keeps on Giving

February 18, 2011

Largely lost in the partisan bickering over the stimulus has been the law’s enormous positive impact on improving government transparency. The American Recovery and Reinvestment Act of 2009 (ARRA) is not just the most transparent federal spending bill in U.S. history—the changes it pioneered will endure even after the stimulus winds down.

By now, many curious Americans have explored spending and job-creation on ARRA projects in their communities at recovery.gov. About 35 percent of ARRA funding is revealed there: every grant, loan and contract. And the reporting extends beyond the primary recipient one level down to sub-recipients. But few people noticed that the Office of Management and Budget applied that extended reporting to the main federal disclosure website USAspending.gov (created thanks to a bill championed by then-Senator Obama).

Even fewer people noticed that the quality of ARRA data improved greatly in October 2010: we can now trace the money as it changes hands three times, instead of two, to sub-sub-recipients. For people concerned about companies tied to political contributions, offshoring of jobs, violations of workplace laws, etc., this deeper data is a potential gold mine for accountability.

In a little-noticed provision, the Recovery Act also required privately-held companies that do a large share of their business with the federal government to reveal the compensation of their five highest-paid executives. We blogged about this when the first round of data came out, revealing executive pay at the high-profile “Beltway Bandit” consulting firm Booz Allen Hamilton.

The Recovery Act has also enabled a side-by-side analysis of transportation spending—comparing job creation from highway-building versus public transportation—that was simply not possible before: apples-to-apples data did not exist. However, in early 2010 Smart Growth America, the United States Public Interest Research Group and the Center for Neighborhood Technology issued “What We Learned from the Stimulus,” finding that transit construction creates 84 percent more work-months than does highway-building. That reinforced our own 2003 finding, in “The Jobs Are Back in Town” that smart growth creates more work for Building Trades union members than does sprawl.

ARRA data and the mapping functions at recovery.gov have also encouraged more people to think about the geographic distribution of government spending (one of our pet peeves here at Good Jobs First). For example, the Voices of California Coalition examined ARRA spending by local jurisdiction and found many hard-hit communities getting little if any dollars and jobs.

In New York City, Community Voices Heard coupled ARRA jobs data along with data from the local public housing authority and its own door-to-door survey work to prove that, despite HUD Section 3 rules intended to ensure that public housing residents get job opportunities when their residences are rehabilitated, very few ARRA-funded jobs went to New York City Housing Authority residents. See “Bad Arithmetic.”

In Texas, the Center for Public Policy Priorities reported on that state’s performance on weatherization spending and Policy Matters Ohio mapped where clean energy jobs were created, finding they were “well targeted to areas of economic distress.”

Finally, we here at Good Jobs First have closely monitored how state governments have mirrored Uncle Sam’s ARRA transparency boost, publishing two “report card” studies on state government Recovery Act websites. Every single state put up such a website—even though they had no legal obligation to do so!

Of course, the states did have more obligations than anyone else to provide ARRA jobs data, since so much of the money flows through state agencies, making them primary recipients. So it was no exaggeration to call ARRA “a giant crash course on disclosure for state governments.” And lo and behold, in December 2010 when we revisited the issue of how well state governments disclose their own spending for job creation, we found the number of states naming names online had jumped from 24 to 37.

Mapping Job Subsidies: Becoming Easier in More States

February 15, 2011

As those who follow Good Jobs First know, since 2000 we have issued several studies mapping the geographic distribution of company-specific economic development subsidy deals—and then analyzing them for their pro-sprawl bias.

We are proud of the methodology we pioneered in creating these studies and have freely given away our data and advice to others seeking to replicate the work. These studies were tedious: we obtained lists of subsidy deals using state Freedom of Information laws and then spent months either obtaining street addresses or cleaning up the addresses provided.

So we are glad to announce new progress: in their online disclosure websites, states are increasingly including the street addresses of economic development deals. More than $3 billion per year among 15 states is now geocodable!

To be sure, the ease with which these street addresses can be copied or downloaded varies a great deal. But the truth is: it is becoming easier than ever to map where states and cities are subsidizing the creation or retention of jobs. And once you have project sites mapped, you can juxtapose them with numerous criteria like those we have used: poverty, race, tax-base wealth, population density, whether the worksite is served by public transportation, whether jobs are being created in communities hardest hit by plant closings and mass layoffs, etc.

Here, derived from our recent study, Show Us the Subsidies, are the state economic development programs we found with street addresses online:

States, Program(s), Most Recent Cost of Program

Arizona – Enterprise Zone Income and Premium Tax Credits – $10,943,276

Colorado – Job Creation Performance Incentive Fund – $6,097,056

Connecticut – Jobs Creation Tax Credit (aka New Jobs Creation Tax Credit) – $10,000,000
Connecticut – Manufacturing Assistance Act – $20,182,448
Connecticut – Urban and Industrial Site Reinvestment Tax Credit – $89,000,000

Illinois – Economic Development for a Growing Economy (EDGE) Tax Credit – $23,534,000
Illinois – Enterprise Zone Program – $112,767,000
Illinois – IDOT Economic Development Program – $4,820,496
Illinois – Large Business Development Assistance Program – $5,699,922

Indiana – Economic Development for a Growing Economy (EDGE) Tax Credits – $61,600,178
Indiana – Hoosier Business Investment Tax Credit (HBITC) – $107,011,548
Indiana – Skills Enhancement Fund (SEF) – $1,186,925
Indiana – Twenty-First Century Research and Technology Fund (21 Fund) – $16,264,300

Kentucky Business Investment (KBI) Program – $33,500,000
Kentucky Enterprise Initiative Act – $21,500,000

Louisiana – Enterprise Zones – $60,564,631
Louisiana – Industrial Tax Exemption Program – $946,890,819
Louisiana – Quality Jobs Program – $43,435,275

Michigan – Brownfield Redevelopment Credits (aka Brownfield Zone Credits) – $78,200,000
Michigan Economic Growth Authority (MEGA) Tax Credits – $105,600,000
Michigan’s Advanced Battery Credits (MABC) – $300,000,000

Minnesota – Job Opportunity Building Zones (JOBZ) – $32,799,000

North Dakota – Development Fund – PACE loans and Regional Rural Revolving Loan Fund – $5,564,016

New York – Brownfield Cleanup Program – $624,000,000

Oklahoma – Quality Jobs – $60,607,522

Rhode Island – Corporate Income Tax Rate Reduction for Job Creation – $21,256,182
Rhode Island – Enterprise Zone Tax Credits – $715,187
Rhode Island – Motion Picture Production Tax Credit – $8,112,990

Texas Economic Development Act (Ch. 313) – $282,900,000

Washington – Aircraft Pre-production Expenditures B&O Tax Credit – $6,200,000

Total – $3,100,952,771

For more information on mapping job subsidies, contact Leigh McIlvaine or Tommy Cafcas.

Bad Development Policy “Impacting” Cities During Recession

September 16, 2009

suburban tractAccording to a recent article, cities all over the country are engaging in a new disturbing trend as a response to stagnant new construction.  Marin, California; Manatee, Florida; Meridian, Idaho and Albuquerque, New Mexico are among a growing number of cities that have chosen to reduce, suspend, or cancel development impact fees, the charges imposed on new development by local governments to offset the cost of growth.  Impact fees pay for critical municipal services such as schools, infrastructure, and police and fire protection.  In 2008, the average fee for a single family residential unit was over $11,000.

The problem faced by developers in these cities is not that the cost of home construction is too high.  The problem is weak demand for new homes.  Further subsidizing new development will not address the problem of demand.  Eliminating impact fees is not going to jump start cities and towns out of economic recession.  It will only further burden local budgets and taxpayers at a time that they can scarcely afford it.

SunCal Shines No Light on New Mexico Lobbying Expenditures

February 23, 2009

tidd-abq-outlineAlthough SunCal has spent huge sums of cash attempting to influence New Mexico’s residents and state legislators over the past three years, the goliath developer doesn’t appear very diligent when it comes to complying with state lobbying law.

SunCal’s latest request of the state’s taxpayers is $690 million worth of tax increment development district (TIDD) bonds to develop a 55,000 acre tract of land to the west of Albuquerque. The measure was shot down last year, but bills have resurfaced this year in both the state house and senate.

A complaint filed by Albuquerque resident Lora Lucero last week accused SunCal of failing to comply with the state Lobbyist Regulation Act. SunCal has mounted a massive public relations campaign, using billboards, radio spots, and internet advertising (“TIDDs Keep Our Families Together!”) in an attempt to sway public opinion on the public bonding capacity it has requested from the state.

New Mexico’s Lobbyist Regulation Act requires that all lobbying and related expenses be disclosed to the state within 48 hours of the expenditure. This includes advertising, mailers to constituents concerning legislation and polls conducted concerning legislation. As of the beginning of last week, SunCal had only reported one expense of $196. The noncompliance complaint sparked an onslaught of critical media to which the company responded midweek by filing current expenditures reports with the state. (As of this posting, they have not yet been made available on the Secretary of State’s website.)

Opposition is mounting to the company’s explicitly political methods of procuring public bonds. Real estate developers in New Mexico outspend other lobbies by leaps and bounds. During the 2006 election cycle, the real estate/development industry donated nearly $1.5 million to state politicians’ political campaigns. (Forest City Covington, the development company that pushed to enact the legislation enabling the creation of TIDDs, spent $150,000 alone.)

A SunCal advertisement that was run in the Albuquerque Journal in late 2008 and early 2009

A SunCal advertisement that was run in the Albuquerque Journal in late 2008 and early 2009

SunCal is also encountering criticism in other locales for its insistence on using taxpayers’ money as a business strategy. In Alameda, California, the company is seeking a roughly $700 million subsidy for a proposed development. Public subsidies are rarely granted without generating a little controversy, and to counter this in Alameda, SunCal contacted residents with a telephone survey about a legislative measure that would exempt the company from the city’s growth management plan. Some residents who received the call contend that the survey was designed to disseminate information (a technique sometimes known as a push poll) about the measure in a way that was partial to SunCal’s political and financial objectives.

All of this is surfacing at a time when subsidiaries and affiliates of the company are experiencing a wave of bankruptcies. Fifteen of these bankrupt projects were partnerships with evaporated financial giant, Lehman Brothers. SunCal projects are defaulting on loans, failing to make payments to contractors, and getting slapped with liens, lawsuits, and repossessions in multiple states.

In the context of a tanking residential real estate markets and strapped state and local budgets, betting on a company whose subsidiaries and affiliates are missing payments to their creditors, relying on massive subsidies, and being accused of noncompliance with state lobbying regulations sounds like a poor investment decision, wouldn’t you agree?

Can Slowdown in the Chicago Suburbs Lead to Smarter Growth?

October 23, 2008

Chicago-area advocates of more sensible growth and land-use policies got a boost this week when Chicago Tribune columnist John McCarron urged the region’s public officials to see one upside of the painful economic crisis: a chance to put the region’s “suburban sprawl machine” into reverse.

McCarron, an expert on urban affairs and state and local fiscal policy, cited problems in previously booming Chicago exurbs, where higher gas prices have made long commutes painfully expensive, and where affordable housing and public transit are limited or non-existent. He called on the region’s public officials to rethink the “anything goes” development and land use policies that have led to massive traffic congestion, high commuting costs, “monster” mortgage payments, and the loss of agricultural land.

The editorial described the redevelopment of an old naval air station in suburban Glenview as an example of more rational, energy-efficient and compact suburban development based on accessible public transit. A recent report by Chicago Metropolis 2020, a business-oriented civic policy group, predicts that seniors and low-income immigrants (two groups leading the region’s population growth) will demand more such compact and transit-rich communities, as well as more affordable housing.

Even if the recession limits some smart growth investments, McCarron believes local governments can still require private developers to take common sense steps to increase energy efficiency, transit access, and the number of pedestrian walkways.

Besides McCarron’s suggestions, other smart growth measures, affordable even in a recession, include promoting the state’s little used “business location efficiency” incentive, which provides a moderately larger corporate income tax credit to companies locating near affordable housing and public transit. McCarron is certainly right to urge Illinois officials to respond to a bad economy with policies that both promote more sustainable development and save taxpayer dollars.

After 65 Years, Union Insurers Will Leave the Big Apple

September 10, 2008

Amalgamated Life Insurance, created in 1943 by the Amalgamated Clothing Workers of America (now part of UNITE HERE) has opted to move to the suburbs north of New York City rather than renew its Manhattan office lease.

Amalgamated hasn’t fully explained why it’s leaving the city. It cited the $480,000 in tax breaks offered by officials in Westchester County and its expiring lease with New York University (a dominant landlord in the area), but it was offered a more generous subsidy from New York City officials hoping the insurance company would stay.

For those of us New York, the competition between municipalities raised some concern since intrastate bidding wars for a company is against state law. Except of course, unless a company is considering relocating out of state. Hence, the report that Amalgamated looked for office space in Newark, New Jersey.  While we may never know if Newark was a serious contender it wouldn’t be the first time a firm used the old tried and true tour of New Jersey to “kick the tires and then go back to New York to negotiate a deal.” Add the legal logistics of moving an insurance company out of state and the claim to move to Newark gets weaker.

Yet, the most troubling aspect of this deal is that officials in Westchester are bucking a positive national trend to increase public investment for jobs located near public transit.  The company’s Manhattan location is right near several subway and bus lines. While the city Amalgamated is moving to, White Plains, is on a commuter train line, the site chosen by Almagamted (the former headquarters of General Foods), is not within walking the train station.

Amalgamated’s plan to move might make the insurance company’s bottom line, but its effect on current employees and environment certainly isn’t neutral.

The Golden State Goes Greener

September 5, 2008

In California, an historic effort to reduce greenhouse gas emissions from passenger vehicles by curbing sprawl will likely soon become law. Senate Bill No. 375 would compel local planning agencies to make planning choices that reduce vehicle miles traveled between residential areas and employment centers. The bill has passed both the California Assembly and Senate and currently awaits Governor Schwarzenegger’s approval. He is expected to sign.

SB 375 provides a mechanism for reducing greenhouse gas emissions by the single largest producer, cars and light trucks. The bill’s broad coalition of supporters maintains that changes in land use and transportation policy must be made to achieve the state’s emissions reduction goals. To this end, SB 375 provides the California Air Resources Board (CARB), charged with reducing greenhouse gas emissions, with the authority to coordinate their efforts with metropolitan area transportation and land use planning.

The bill mandates that metropolitan planning organizations (MPOs) include sustainability strategies in their community growth and transportation plans. It integrates housing, transportation, and climate change policies for all 17 MPOs in the state. The bill’s basics:

• Transportation planning: CARB will set regional greenhouse gas reduction targets in consultation with local governments. Those targets will be incorporated into each region’s long-term regional transportation plan.
• Housing planning: Each region’s Regional Housing Needs Assessment (RHNA) – the mandated process by which local jurisdictions address their fair share of regional housing needs – will be adjusted to become aligned with the land use plan in each region’s regional transportation plan. This adjustment will result in a “fair share” redistribution in which municipalities growing more jobs must also provide for a larger share of housing and is inclusive of affordable housing near municipalities with strong job growth.
• California Environmental Quality Act reform: Environmental review will create incentives to implement the strategy, especially for transit priority projects.
Green strings: SB 375 offers local governments regulatory and other incentives to encourage more compact new development and transportation alternatives. Local governments found to be in noncompliance with the new plans will be ineligible for state and federal funding.

In one efficient stroke, S.B. 375 mandates regional cooperation in several major policy areas. It compels regional governments to take steps toward correcting jobs-housing imbalances. It positions affordable housing near central business districts. Finally, it coordinates a shared responsibility strategy for greenhouse gas emissions reductions. Let’s hope that the passage of this legislation will serve as an example to other states seeking to rectify the host of problems caused by sprawling growth.