County Sales Tax Measures Could Capitalize Federal Loan Program
The idea of 30-10 has captured the imagination of local officials in Riverside and San Bernardino counties, who also have county sales tax measures that could be used to help secure low-interest loans from the federal government. Denny Zane has met with the Riverside County Transportation Commission and San Bernardino county officials who are interested in the possibility of essentially using their sales tax measures to help capitalize a federal loan program that would loan the money back to the counties to frontload their transportation construction programs.
Every dollar used for capitalizing a loan program typically yields $20 to $25 in lending capacity. For example, this capital to loan ratio suggests that the funding needed to capitalize an $8 billion loan – which is what is needed to finance the 30-10 program – would be about $320 million. That’s less than two years worth of the sales tax revenue stream provided for the Measure R transit construction program.
Denny says, “The idea of using local revenue streams to increase the infrastructure financing capabilities of the federal government has so much potential. It is a model for new more collaborative roles for federal and local governments. The local level is where the most potential exists to mobilize money and constituencies, and it is also consistent with Governor Jerry Brown’s ideas about devolving funding authority to local governments.”