All Is Not LOST: Tracking California’s Local Option Sales Tax Revenues for Transportation During the Pandemic
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2021-08-01
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Edition:Final Report (May 2020 – August 2021)
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Abstract:The COVID-19 pandemic dramatically affected transportation systems, including the ability of localities to pay for them. The authors explore the effects of the pandemic and the associated economic turbulence on local option sales taxes (LOSTs), an increasingly common revenue source for transportation in California and across the U.S. LOSTs have many advantages over alternative finance instruments, and they can raise prodigious amounts of revenue. However, LOST funding relies on consumer spending. During times of economic weakness, spending and therefore LOST revenues will lag. This is precisely the pattern the authors observe in California counties during the initial months of the pandemic.
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