California’s History of Transportation: From the Stagecoach to Rail to a Regional Planning Infrastructure

In the history of California transportation, the year 1865 was a pivotal one. Timothy Guy Phelps led a group of business investors in creating the San Francisco to San Jose Railroad Company, California’s first major railroad company. Phelps, a former state Assembly member who had emigrated from New York at the outset of the Gold Rush in 1849, had a vision of connecting Northern and Southern California by rail.

Just two years earlier, work got underway on what was at the time the greatest technological project in the country’s history—the Transcontinental Railroad, which terminated in Sacramento. Up to that point the only real way to travel across the country was by stagecoach, which cost $1,000 (about $22,000 today) for a grueling, grubby, supremely uncomfortable and perilous journey that could take as long as six months.

The Transcontinental Railroad would cut the trip down to under a week, with far cushier accommodations and a pleasantly smoother ride, all for the relatively affordable price of $150 ($3,500 circa 2022).

Phelps’s vision was to do something similar for in-state California transportation. But in 1868, Phelps and his partners sold their nascent company to Leland Stanford, who had recently served as California’s eighth governor and who was already a railroad tycoon in a partnership with three other powerful businessmen known as “The Associates”—popularly referred to as the “Big Four.”

The next year, the Big Four merged their Central Pacific Railroad with the company they’d purchased from Phelps to form the Southern Pacific Railroad. On Sept. 5, 1876, the first train from San Francisco arrived in Los Angeles. The era of mass transportation in California, an innovation that would help shape the state over decades and up to the present day, was underway.

The Rule of the Railroads

Connecting the entire country by railroad changed the face of American life, but arguably, no state was affected as profoundly as California—for both good and ill. As one writer put it, railroads were simultaneously “imperious instruments of economic warfare, and the essence of progress.” 

California became part of the still-nascent United States in 1850, but in practical terms, the state remained isolated from the rest of the country and largely self-contained. Railroad transportation changed that. And while California was integrated into the political life of the U.S., its own political life quickly came to be dominated by the company that held an absolute monopoly over railroads in the state.

The Southern Pacific Railroad monopoly extended well beyond railroads. With total control over the state’s only effective means of transportation, the company controlled whole industries as well as local, county and state governments. It earned the appellation “The Octopus” from novelist Frank Norris because its tentacles extended everywhere.

The Automobile Gives Rise to Transportation Politics

Rail became a primary mode of local transportation, linking disparate regions of the state. Cable cars started running in San Francisco in 1873, and the San Francisco Municipal Railway began running in 1912. But thanks to an innovation coming out of Detroit, rail was already on its way to being supplanted as the preferred way for America to get around, both in cities and elsewhere. In 1913, Henry Ford’s new company began manufacturing mass-produced automobiles.

By the middle of the 20th century, the automobile was not only the dominant means of California transportation, it was reshaping the American landscape. Coupled with “white flight” from urban areas and federal housing policies that encouraged development of single-family homes, the prevalence of cars and the burgeoning highway system on which they traveled produced the phenomenon known as “suburbanization.” The sprawling residential communities, almost exclusively populated by white residents, were suddenly springing up miles away from urban centers, connected to cities and to each other by seemingly endless ribbons of asphalt.

By 1956, California had 2,000 miles of highway that was designated as “interstate.” When President Dwight D. Eisenhower signed the Federal-Aid Highway Act of 1956, the state received an infusion of federal funds to continue building its highway system. That meant more suburban sprawl and racial segregation between cities and the newly developed suburbs.

It also meant degradation of urban centers, as freeway developments often tore through neighborhoods, dividing and even eradicating urban, largely Black communities. As highway construction exploded, so did opposition to new development. Through the late 1950s and 1960s, new highway projects in San Francisco, Berkeley, Oakland, Los Angeles, Sacramento, San Diego, and Orange County were curtailed or shelved due to local protests. The anti-highway movement was linked closely to the civil rights movement, with activists pressing for equal access to transportation systems.

The Advent of Long-Term Transportation Planning

The 1960s and 1970s were also a kind of golden age of transportation planning, with government stepping in at both the federal and state levels to create new entities to take charge of the long-term transportation outlook.

Eisenhower’s Federal Highway Act, also signed in 1956, kickstarted the interstate highway system—an idea that had been pushed at the federal level since President Franklin Roosevelt proposed it in the late 1930s. Under an earlier version from 1938, the Bureau of Public Roads produced a report outlining plans for a network of six interstate roads—three going north-south, three east-west—totaling about 27,000 miles.

A revised version in 1945 expanded the proposed amount of roadway to roughly 37,000 miles, but it wasn’t until the 1956 law that Congress actually allocated funds, totaling about 90 percent of the projected cost, or $24.8 billion (about $256 billion in 2022 cash). Labeled The Greatest Public Works Project in History, the proposed interstate system would cover more than 40,000 miles and take 13 years to construct.

The highway system revolutionized domestic travel at least as completely as the Transcontinental Railroad had a century earlier. Prior to the highway system, Americans who wanted to travel long distances by car were confined to a few narrow, often poorly paved (if paved at all) roads. The most famous, memorialized in song,  was Route 66, stretching from Chicago to Los Angeles. A cross country drive could take two weeks or more.

As interstate highway construction moved along at a breakneck pace, controversies about how and where to build in heavily populated areas, as well as a brewing financial shortfall, made one thing clear: Highway construction needed better planning at the regional and local levels if the system of interconnected roads tying together all 48 continental United States was going to work. 

The Federal Highway Act of 1962, signed by President John F. Kennedy on Oct. 23, of that year (at the height of the Cuban Missile Crisis, proving once again that presidents can tackle more than one problem at a time), addressed the lack of transportation planning by mandating that in order to obtain federal funds for highway and other transportation projects, states must create a process for managing and planning how their transportation systems would develop years into the future.

The “3C” Planning Process

The bill signed by Kennedy did not require states to set up permanent organizations dedicated to transportation planning, but it did create a requirement that came to be known as “3C.” States, to qualify for federal funds, must show that they have set up “a continuing comprehensive transportation planning process carried on cooperatively by States and local communities.”

Urban planning entities were not a new concept, however. In 1922, civic leaders in the New York metropolitan area created the Regional Planning Association, which produced the first volume of its work, the Regional Plan of New York and Its Environs, in 1929. The Regional Plan was a landmark in urban planning, for the first time proposing a comprehensive structure for roadways, railroads and other urban amenities such as parks, industrial centers and residential developments over the entire, sprawling landscape in and around New York City. Previous efforts focused only on individual municipalities.

The city of Chicago had initiated a far-reaching urban planning process even earlier, in 1909. And by 1945, the city of Atlanta along with DeKalb and Fulton counties created the Metropolitan Planning Commission, the first publicly run multi-county planning agency in U.S. history.

It wasn’t until 1973, under President Richard Nixon, that Congress passed a new version of the Federal Highway Act formalizing the 3C “continuing, comprehensive, cooperative” planning process by requiring that states create Metropolitan Planning Organizations (MPOs) for all population centers of at least 50,000 people.

The new legislation conditioned federal transportation aid on the creation of MPOs, and for the first time designated federal funds—specifically, one-half of one percent of all federal transportation funds—specifically for purposes of planning.

Today, according to the Institute for Local Government, California has 18 MPOs handling the transportation planning process for territory that encompasses 98 percent of the state’s population.

California Steps In With New Transportation Laws

California was somewhat ahead of the game when it came to transportation planning. By the early 1960s, California had become effectively the capital of “car culture,” and the legislature responded to anti-highway controversies by giving local governments more control over transit, and more funds to develop rapid transit systems. The Collier-Unruh Local Transportation Act of 1963 allowed counties to assess a new in-lieu tax (a type of property tax paid instead of a vehicle license fee) of one-half-cent, with its revenue dedicated to local California transportation systems. The San Francisco Bay Area’s BART system was built largely with those funds.

And then in 1971—two years before the 1973 federal creation of MPOs—the legislature passed if not the most consequential California transportation law in its history then certainly one of them—SB 325, aka the Mills-Alquist-Deddeh Act, more popularly titled as the Transit Transportation Development Act, or TDA. Shepherded by senate President Pro Tempore Jim Mills of San Diego, the bill set up a rather complicated new tax scheme to fund transit at the local level.

The Act established seven Regional Transportation Planning Agencies (RPTA) in counties with large rural areas. They included the Santa Cruz Regional Transportation Commission and the Transportation Agency of Monterey County, as well as planning agencies in El Dorado, Nevada, and Placer counties, and the Tahoe region.

The RPTAs, along with County Transportation Commissions created by the new law in larger counties, are responsible for administering the funds raised by the taxes under SB 325.

The new law lowered the state sales tax from 4 percent to 3.75 percent. (As of 2022, California’s base sales tax rate is 6 percent.) At the same time, SB 325 allowed counties to raise local taxes from 1 percent to 1.25. The extra quarter-percent would be earmarked from transportation and placed into a Local Transportation Fund, giving counties local control over transit funds while maintaining the overall tax rate at a steady level.

At the same time, SB 325 took the unprecedented step of taxing gasoline. Previously, California exempted motor vehicle fuel from the state sales tax. But under the tax formula devised by Mills, the 3.75 percent sales tax now applied at the pumps as well. The money went into the state’s general fund to make up for the lost revenue from the quarter-percent reduction. Inevitably there would be “spillover,” that is, revenue that exceeded what the state required to cover the deficit from the sales tax reduction.

The spillover went into the State Transit Assistance fund for mass transit projects. The Local Transportation Fund would be administered by county governments and distributed based on population in the various regions of each county.

The landmark law almost never happened. Gov. Ronald Reagan, who generally opposed raising taxes or creating new government agencies (though it should be noted, he presided over what were at the time the largest tax increases in state history), fully intended to veto the bill. But with some dogged political maneuvering, Mills was able to recruit the support of numerous business leaders, persuading Reagan to okay SB 325.

RPTAs: Giving Rural California a Voice in State Policy

As the name would imply, the primary function of each RPTA is planning. The agencies are required to update their long-term transportation plan every four years. The same requirement applies to MPOs. Along with the 18 MPOs, there are currently 26 RTPAs in California, for a total of 44 transportation planning bodies covering the state.

RPTAs guarantee that rural and smaller suburban areas get a voice in formulating California transportation policy. They also chase down funding for improvements and new projects in the regional transportation system. Local transit projects that state transportation officials may not fully understand have a better chance of approval after going through a local process with an RPTA.

“RTPAs play an important role in Caltrans’ overall planning efforts,” former California Department of Transportation official Garth Hopkins told the site RuralTransportation.org. “The state realizes that even at the District level, a local agency will be better informed about their needs and priorities.”