I wrote this for today’s Mercury News:

We’ve heard no reports of locusts, boils, frogs, fiery hail or any other biblical plagues. Despite that boon, the Valley Transportation Authority must close a $98 million shortfall over two years. Like nearly every transportation agency in California, the VTA has endured the jarring impacts of the state’s repeated raids of local dollars and a whiplash-inducing plunge of sales tax revenue.

Recent articles proclaim this the moment of transit’s Great Demise. Some rush to abandon local transit altogether; the governor’s budget proposes to eliminate the entire Public Transportation Account, upon which VTA annually relies for tens of millions of operating dollars.

Confronting deficits of this magnitude, elected officials face a simple, though repugnant, decision: We cut. We have trimmed more than $70 million with a combination of wage concessions by VTA’s dedicated employees, service and spending cuts, and fare increases. These blows appear harshest to those least able to bear them: seniors, persons with disabilities, and the working poor.

News of transit’s death is premature, however. Everything we know about the future — as our population ages, cities grow in density and size, traffic congestion increases, fossil fuels become scarcer, and greenhouse gas concentrations rise — tells us that demand for transit will only grow.

Merely cutting will relegate our children to a future of crisis-plagued inadequacy.

Draining the chronic fiscal swamp requires much more than swiping at the alligators; it demands innovation.

Local transportation agencies — and particularly the VTA, under General Manager Michael Burns’ recent stewardship — have demonstrated an ability to innovate, to boost cost-efficiency and improve service. A few examples:

In three years, residents will see Bus Rapid Transit (BRT) — a system using hybrid buses in physically segregated lanes — every five minutes along the Santa Clara Street and Alum Rock, supplanting the costlier light-rail line planned for that corridor. Transit systems like the Transmilenio in Bogota show that BRT carries more passengers than light rail at a comparable speed and at a lower capital cost. In future years, BRT will expand along West San Carlos and El Camino Real.

A regional grant will help us launch a pilot bike share program this summer to enable transit riders to borrow bicycles from a docking station with the swipe of a credit card. This will enable CalTrain patrons to avoid being bumped from boarding when the bike cars become full and provide commuters an easy way to get to and from the transit stations without having to scramble for parking.

Over the next 18 months, we’ll roll out express lanes on southbound Interstate 680 from Alameda County and at the 237-880 connector, enabling commuters with FasTrak transponders to bypass congested lanes by paying a fee — which will vary with traffic levels — to use the lanes. We’ll use those funds to improve roadway maintenance and expand transit options in the corridor.

Although cuts in bus service will take a toll, they would have wrought more severe impacts had VTA staff not used sophisticated computer models to redesign bus routes in 2008 to focus service to corridors with the highest demand. As a result, we’ll cut 8 percent of our spending on service this year, but lose only 2.4 percent of our ridership.

When cost estimates for a people-mover to the Mineta San Jose International Airport ballooned to $660 million, city transportation officials sought private sector partners. Nineteen companies have expressed interest in building and operating an automated “personal rapid transit” system, an innovative concept that will debut at London’s Heathrow Airport this spring.

Even in times of scarcity, we best serve our transit-dependent residents through innovation, not elimination.

Planting the Seeds of San Jose’s Economic Resurgence

As this week brings news of our local unemployment rate just beginning to taper downward, local businesses are peering out from their frozen dens for the first signs of Spring.  That’s of little solace to thousands of our families still losing their homes and jobs, but it does raise a crucial question as we try to get people back to work: how can we best communicate to businesses that they should make San José the place to grow?

Although the media typically focuses on the flight of jobs and companies from California, a 2007 study from Public Policy Institute of California found that far greater employment shifts occur within California, from businesses moving from one county to another—usually adjacent—California county.  Yet an even larger impact on local jobs comes from a corporate boardroom’s decision about where and whether they will expand,  rather than whether or where they will relocate.  The authors, economists Jed Kolko and David Neumark, conclude that real estate costs appear to drive many of those decisions.  Naturally, the regulatory costs that cities impose on a company’s real estate decisions also play a key role.

This week, Mayor Chuck Reed and Councilmembers Rose Herrera, Nancy Pyle, and I will lay out a multi-pronged business incentive plan.  We don’t pretend that this will provide the panacea for our anemic job growth, or that any one of these proposals will itself magically alter the trajectory of a San José business.  Rather, we aim to improve the perception about doing business in San José, and to encourage business decision-makers to take advantage of the City’s willingness to help them hire and grow here.  These proposals include:

• Waiving business license fees on any new small business employing up to 8 employees, to help the many residents—particularly in our immigrant communities—who often start small businesses during periods of high unemployment;

• Reimbursing companies for city fees on tenant improvements or new development, by rebating the additional tax revenues created by the development activity over several years;

• Creating a fund to pay for expedited permitting where we need to move nimbly to secure a company’s expansion, tenant improvements, or move into a vacant building;

• Waiving fees for employee parking in public garages for two years for any company choosing to enter or renew a lease in a downtown office or retail space;

• Deferring the payment of some City impact fees on development—relating to transportation, sewer, or other infrastructure improvements—where those improvements will phase in over time; and

• Working with local business organizations to effectively spread the word about these incentives, and other programs, such as Enterprise Zone tax credits, that will make San José the place to hire and grow business.

Two principles animate these proposals. First, we need to take calculated risks to become a locus of job creation. Doing nothing, of course, poses far greater risks, by condemning us to our current economic anemia.  Second, with a $100 million deficit, the City cannot use current dollars as an incentive for business activity. As our Office of Economic Development has explored, however, we can commit future tax revenues generated by that new business activity.

These ideas, and others that might be generated by the community, local businesses, and our colleagues, can work effectively if packaged together to sell San José to the rest of the world—but only if we act with the urgency that our struggling families deserve.

Sam

My quote, “We buy tens of millions of CDs and other instruments every year.  So the idea is how do we use that power to create incentives for banks to help our residents who are struggling with their mortgages.”

Sam