State Sen. Lowenthal Presses Balanced Environment & Economic Agenda

Alan, we interviewed you in September for the Metro Investment Report. At that time, you mentioned the balance that has to be struck between our port operations, which provide jobs and economic development, and quality of life issues affecting your constituents. Are we being proactive in dealing with these issues?

If you want to become proactive, you need a critical mass of people that understand the issues. I think that is what is occurring now. I think that both the administration and the legislature are becoming more proactive. However, there are some problems. We want to change to technology that doesn't pollute, but there is no money in the state treasury. The federal government is not helping and the industry is upset if we charge them any money. This is quite a battle, but more and more people are getting on board because they know this is the future of both the state and the nation, and we have to deal with these issues.

Who are the stakeholders that need to come to address this challenge?

To effectively address goods movement in the state and also protect the environment and quality of life, we need all the stakeholders to participate. At the local level you need the participation of all the affected communities. At the regional level you have to have the environmental community involved right from the beginning. At the state level, you have to have the industry involved.

Proactive solutions can be found. The new Pier Pass program is an example. This is a program that extends port operating hours. It is funded by a fee on containers that is paid by the goods owners. It is being marketed as a way to decrease both congestion and pollution.

To back up and put things a little more into perspective, consider that China is currently investing $80 billion in infrastructure. In California, we are not investing anything. As a result we have to devise innovative solutions like public-private partnerships to fund infrastructure improvements. At the same time, however, you have to have the state step up, prioritize this, and put resources into it The largest stakeholder, the federal government, has been completely absent in terms of helping with pollution and congestion, and targeting infrastructure improvements for goods movement. In 2002, when there was a lockout, everyone in the Midwest realized how important our ports are. Maybe that is what is going to have to happen again in order to get assistance from the federal government.

How can the legislature encourage the system-wide unification of the goods movement regulatory structure?

To do that, the scope of decision-making has to be broadened beyond the individual projects. In terms of goods movement there are four major areas of the state that require regional solutions that are linked to one another: the Bay Area, the Central Valley, the Los Angeles region and the San Diego to Mexico region. Plans for these regions need to be developed under a statewide umbrella.

Focusing on our region, the Los Angeles Economic Development Corporation is about to release a study that states that without a system-wide investment in goods movement in the 5 county regions, 500,000 goods movement jobs are at risk. The study also forecasts that $17 billion in state sales and state income taxes are also at risk. How can we use this at risk money to create the kind of revenue flow to finance infrastructure needs?

As long as we protect California's workers, we can move toward privatization. We can use bond financing to be paid off by the very people that move the goods, using fees based on volume and destination. In short, we charge for usage of our infrastructure. Those are some of the ways we can use the future revenue stream to help pay off our bonds. This can be done if labor, the environmental community, private sector banks and the industry all come together to address the issues.

The LAEDC is considering whether the state could be helpful in establishing a freight facility fee jurisdiction that could become the revenue source for infrastructure bonds. Have you been approached about this?

I met with a number of legislators, Secretary of Business, Transportation and Housing Sunne Wright McPeak and Cal/EPA Secretary Alan Lloyd, to discuss goods movement and environmental impacts, and how we can create the types of public/private partnerships you are talking about. The administration is developing a plan regarding how this kind of infrastructure financing can be implemented, and it should be ready by the end of March. At the same time, Senator Perata will be introducing legislation regarding goods movement and the kinds of fees I just mentioned. Assembly Speaker Nunez is also dealing with some of the same issues. We are going to see these plans surface during this legislative session.

This interview is being conducted prior to the runoff election for Mayor in the City of L.A. Soon there will be an election for the Mayor of Long Beach, and as you said in our September interview, we have to be able to balance economic development with public health and the quality of life. What do you hope to hear in the mayoral debates in the cities that contain California's two primary ports?

The needed discussions have already started. Mayor Hahn's taskforce on no net pollution increase is working with all the affected parties to come up with a plan. The City of Long Beach is also beginning the discussion, though they are not as far advanced in terms of their Green Port Plan. I think both mayoral races will begin to focus more on the issues of balancing goods movement, economic growth, and job development with environmental protection and quality of life. I would be greatly disappointed if these key issues were not addressed in both mayoral races in the future.

What is the role of the Alameda Corridor Transportation Authority with regard to addressing the issues you mentioned?

The ACTA has a history of administering large projects. It is already the joint powers authority that created the rail facility by bringing together all the cities. It has experience collecting fees. It is a trusted organization. We do not need to keep reinventing the wheel. It is time to assess our resources and utilize those that are effective as we move forward in the venture, and the ACTA has been one of our most effective organizations. The ACTA may choose not to be involved, but I think that they will play a major role in the development of the infrastructure for goods movement in the future.

In closing, looking a year ahead, what do you think will have transpired with regard to these infrastructure issues?

I think that you will see the development of innovative approaches to infrastructure improvement. I think that you will also find that people are thinking more in terms of regional planning and statewide planning. I think this legislative session will be what defines the gubernatorial race in 2006. The candidates will definitely have to address what they have, or have not done, with regard to infrastructure investment.