Traveling in California:
The Transportation System—How Decisions Are Made

The Key Players:
Who Decides What Gets Built and When?
  • Sets overall transportation policies, including establishing revenue sources, and expenditure priorities.
  • Appropriates lump sum for capital improvements through annual budget and provides oversight on implementation of the state transportation program.
  • In general, has delegated the authority to select specific projects to Caltrans, regional and local agencies, and the California Transportation Commission.
Department of Transportation (Caltrans)
  • Implements the state transportation program in general through 12 districts and headquarters in Sacramento.
  • In 1999-00, the department has 22,750 authorized positions.
  • Owns, operates, maintains, and repairs the state highway system.
  • Plans and designs all capital improvement projects on the state highway system.
  • Selects projects for the Interregional Transportation Improvement Program (ITIP) (discussed later) in the four-year State Transportation Improvement Program (STIP).
California Transportation Commission (CTC)
  • Consists of nine members appointed by the Governor.
  • Recommends policy and funding priorities to the Legislature.
  • Adopts estimates (prepared by Caltrans) of available transportation funds for capital projects.
  • Reviews and adopts STIP and State Highway Operation and Protection Program (SHOPP) (discussed later) to ensure compliance with statutory guidelines.
  • Allocates state and federal funds to projects.
  • Provides oversight on Caltrans and local project delivery.
Regional Transportation Planning Agency (RTPA)
  • Includes 46 agencies formed by special legislation, council/association of governments, and local transportation commissions.
  • Administers state funds and allocates federal and local funds to projects.
  • Selects projects for the Regional Transportation Improvement Program (RTIP) in the STIP.
Metropolitan Planning Organization (MPO)
  • Federally required planning bodies; typically the same as an urban region's RTPA.
  • Prepares the 20-year Regional Transportation Plan (discussed later) and selects projects.
  • Currently, there are 16 MPOs in California.
  • The Governor designates an MPO in every urbanized area with a population over 50,000.


Other Players
  • Environmental agencies at the local, state, and federal level review transportation projects and issue permits to ensure transportation improvements comply with environmental law.
  • Cities and counties set land-use policy and nominate transportation projects for funding by the RTPA.
  • Transit agencies, such as Bay Area Rapid Transit (BART) and Los Angeles County Metropolitan Transportation Agency (LACMTA)--nominate projects for funding and deliver transportation services and improvements.

The "STIP" Process: Determining What Gets Built and When

How Are State Transportation Dollars Allocated?

• The "STIP" (State Transportation Improvement Program) process determines which transportation projects will be funded by state funds and when projects will be constructed. The process works as detailed below.

• Caltrans first prepares a fund estimate which projects biennially all federal and state transportation funds available over a four-year period. The fund estimate, when adopted by the CTC, provides the basis for determining how many transportation projects can be funded in that time frame.

• For the four-year period from 2000-01 to 2003-04 (the 2000 STIP period) federal funds, other than transit-specific funds, and SHA funds are projected to total $19.8 billion.

• These funds are first used to cover noncapital expenditures, including administration, highway maintenance, and operations. Remaining funds are then allocated to local assistance and capital outlay.

How Are STIP Funds Distributed?

• Under current law, 75 percent of STIP funds are designated for the Regional Transportation Improvement Program (RTIP) with projects chosen by RTPAs, while the remaining 25 percent are designated for the Interregional Transportation Improvement Program (ITIP) with projects chosen by Caltrans. Projects may also be jointly funded by the ITIP and the RTIP.

• Chapter 622, Statutes of 1997 (SB 45, Kopp) created the current structure for decision-making and distributing STIP funds. Chapter 622 consolidated transportation programs into two basic categories—regional and interregional.

How Are Interregional Funds Distributed?

• Of the ITIP funds, 40 percent is subject to the "north_south split" (discussed below), while the remaining 60 percent is limited to improvements outside urbanized areas.

• About 10 percent of ITIP funds must be programmed for intercity rail projects, while the remainder may be programmed for highway improvement projects.

How Are Regional Funds Distributed?

• Funds for the RTIP are geographically divided by what is known as the north-south split. Specifically, 60 percent of funds are allocated to 13 southern counties, while the remainder is allocated to the remaining 45 northern counties.

• These funds are further divided into county shares based on a statutory formula which allocates 75 percent of the funds based on population, and 25 percent based on highway lane miles.

How Are Projects Chosen for the Regional Program?

• Projects are selected for funding by RTPAs based on regional priorities, as defined in the 20-year regional transportation plans. Specifically, projects are selected from a large pool of projects proposed by cities, counties, and transit agencies. The RTPAs then submit their respective lists to the CTC for approval.

• The CTC can either adopt or reject an individual RTIP in its entirety, but cannot delete or add specific projects. Together, the 46 regional proposals form the statewide RTIP.

Key Categories of STIP Expenditures

Noncapital Expenditures

• Caltrans estimates approximately $5.1 billion in noncapital expenditures during the 2000 STIP period (2000-01 through 2003-04).

• The 2000-01 budget proposes to spend about $885 million in state and federal money on highway maintenance and operations.

Local Assistance

• Certain state and federal funds flow through Caltrans to local agencies for nonhighway projects such as expansions of local roads or transit improvement.

• Caltrans estimates that about $4 billion will be spent on local assistance in the 2000 STIP period.

Capital Outlay Expenditures

• Capital expenditures involving state funds are estimated and scheduled in two four-year documents, prepared by Caltrans and regional agencies and adopted by the CTC every two years:

• The State Highway Operation and Protection Program (SHOPP): Includes schedule and cost-estimates for all highway rehabilitation projects, as well as projects to improve safety and operations.

• The State Transportation Improvement Program (STIP): Includes schedule and cost estimates for projects that add capacity, such as expanding a freeway or adding an additional train.

• Current law requires that highway funds first be spent to preserve the highway system before being used to expand it. This requires that the SHOPP is fully funded before determining the availability of funds for the STIP.


The "SHOPP" Primarily Funds Highway Pavement Repairs

1998 Through 2002

• The State Highway Operation and Protection Program (SHOPP) primarily funds rehabilitation projects including roadway (pavement) and roadside (landscape and other nonpavement facilities) rehabilitation.

• For the four-year period from 1998-2002, about $3.4 billion is programmed for SHOPP projects. About 72 percent of the SHOPP expenditures will be for pavement rehabilitation.

• The SHOPP is based on a ten-year plan (updated every two years) that projects state highway rehabilitation needs.

• The SHOPP projects are selected by Caltrans based on statewide need, rather than a geographic formula, such as percentage of population or highway lane miles.

Most STIP Funds Used for Highway Projects

1998 Through 2004

The current 1998 STIP contains almost $8.5 billion worth of projects over a six-year period (1998-99 through 200304), including projects that were incorporated from earlier STIP cycles. The 2000 STIP, the first four-year STIP under current law, covers the period 2000-01 through 2003-04 and will be adopted in the summer 2000.

Funding for STIP projects is scheduled in four discrete categories: engineering and design (known as capital outlay support), environmental review, right-of-way acquisition, and construction.

For the 1998 STIP, 70 percent of funds are spent on highways, 16 percent on transit, and 10 percent on local roads. The remaining 4 percent (other) consists primarily of projects that are designed to improve air quality, such as constructing carpool lanes or converting transit fleets to clean fuel.

SHOPP and STIP Expenditures by County
(In Millions)
SHOPP (1998-2002) STIP (1998-2004)
Alameda $121 $212
Alpine 0 23
Amador 31 --a
Butte 34 27
Calaveras 15 --a
Colusa 15 7
Contra Costa 22 120
Del Norte 25 7
El Dorado 52 16
Fresno 93 91
Glenn 17 11
Humboldt 71 39
Imperial 34 46
Inyo 24 46
Kern 116 152
Kings 41 25
Lake 24 14
Lassen 47 24
Los Angeles 491 1,056
Madera 27 15
Marin 15 39
Mariposa 2 6
Mendocino 70 26
Merced 63 30
Modoc 0 13
Mono 33 39
Monterey 36 85
Napa 30 20
Nevada 80 14
Placer 69 32
Plumas 26 13
Riverside 127 193
Sacramento 68 125
San Benito 15 10
Orange 122 280
San Bernardino 245 314
San Diego 130 405
San Francisco 40 75
San Joaquin 74 84
San Luis Obispo 67 75
San Mateo 36 86
Santa Barbara 39 78
Santa Clara 53 163
Santa Cruz 9 35
Shasta 74 42
Sierra 0 7
Siskiyou 67 27
Solano 72 42
Sonoma 48 70
Stanislaus 26 57
Sutter 8 12
Tahoe RPA NA 9
Tehama 56 18
Trinity 16 20
Tulare 61 80
Tuolumne 1 12
Ventura 79 108
Yolo 9 25
Yuba 5 9
Subtotals $3,271 $4,704
Interregional Program NA 1,478
Reserves 79 --
Totals $3,350 $6,182
a Shared among Alpine, Amador, and Calaveras Counties.

• While STIP funds are distributed according to a formula based on population and highway lane miles, SHOPP funds are distributed according to need.

• As a result, some counties receive substantially more STIP funds than SHOPP funds, such as San Diego and Los Angeles Counties, while the reverse is true for other counties, such as Nevada and Siskiyou.


From Planning to Construction: How a Project Gets Built

Long-Term Transportation Planning

• The first step to solving transportation problems occurs at the transportation planning phase.

• State and federal law require that every region with a population of 50,000 or more prepare and regularly update a 20-year Regional Transportation Plan (RTP). This plan

identifies the transportation needs of the region based on projections of growth and travel demand, coupled with projections of estimated funding levels.

• Any project that is expected to have a negative air quality impact must be included in the RTP. This ensures that the project's air quality impact is accounted for in the evaluation of a region's ability to meet state and federal air quality standards.

• The RTP must be approved by the Federal Highway Administration (FHWA), the Federal Transit Administration, and must be consistent with the State Implementation Plan (SIP) for air quality conformity with the federal Clean Air Act before a project is eligible for federal funding.

Secure Funding for Project

• Once a project has been included in the RTP, its sponsor (such as a city, county, or transit agency) must secure funding for the project from any combination of state, federal, local, or private fund sources.

• For projects built with state funds, funding is secured when a project is programmed in the STIP; for projects built with federal funds, but no state funds, projects must be included in the federal equivalent, known as the Federal Transportation Improvement Program (FTIP).

Environmental Review

• Before extensive design or construction can begin, FHWA, Caltrans, or local agencies are responsible for ensuring that the project complies with state and federal environmental laws. The two major laws affecting transportation projects are the California Environmental Quality Act (CEQA) and the National Environmental Protection Act (NEPA). These laws require that various alternatives be examined in order to meet the purpose and need of the project while minimizing the project's negative environmental impact.

• Typically, environmental review is the longest and most unpredictable phase of the project delivery process. The review can include:

• Technical studies which in some cases can only be conducted at a particular time of the year in order to evaluate the potential impact.

• Project evaluation and permit approval by as many as 15 to 20 agencies on certain projects.

• Public hearings which may result in requests to review new alternatives or eliminate the project altogether.


Due to restrictions in the State Constitution, almost all state highway projects funded with state funds are designed by Caltrans. For state highway projects funded without state funds—such as those funded with only local and federal revenues—design may be performed by local transportation agency staff or local agencies may contract out to the private sector.

• Although preliminary design must be done in order to conduct environmental review, final design work is not completed until the project has received environmental approval by the various state and federal agencies.


• Once rights-of-way have been purchased and design completed, Caltrans or local agencies advertise the project for construction by the private sector.

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