(December 18, 2008)
Public transportation advocates remain hopeful based on assurances from legislative leaders that appeals to preserve state funding have not fallen on deaf ears. Nevertheless, the actual nuts and bolts of the budget revision package passed today by both houses of the legislature provide little encouragement to transit providers, who have seen state support dwindle to the point of near-complete elimination.

The "revenue neutral" package crafted by Democratic leaders to avoid a two-thirds vote requirement radically reconfigures transportation funding in California, in the process institutionalizing the ongoing raid of Public Transportation Account funds for diversion to the General Fund. By eliminating the sales tax on gasoline, the measure in turn eliminates "spillover" funds - a major source of about $1.5 billion in available transit-dedicated funds that have been re-directed to non-transit purposes over the last two budget cycles.

Diversions from the PTA, which was created through a series of statewide ballot initiatives, have totaled nearly $5 billion this decade, and nearly $3 billion the last two years alone.

Transit advocates claimed some modicum of victory in the fact that the package preserves the State Transit Assistance (STA) Program to the tune of $150 million annually. That allocation represents a 52-percent cut from the amount included in the budget passed in September, yet defies Gov. Arnold Schwarzenegger's call to eliminate the program completely. The STA is the only ongoing source of state funding for transit operations.

"We appreciate that legislative leaders have displayed at least some sympathy for the fact that transit's slice of the budget pie has been cut to the crust," said Joshua W. Shaw, Executive Director of the California Transit Association. "But it's hard to see these measures as anything but a step backwards when it comes to providing transit agencies with the means to meet the demands for their services that have surged to record-breaking levels in the past year."

The plan calls for replacing the state sales tax on gasoline, as well as the state excise taxes on both gasoline and diesel fuels, and substituting a 39-cents-per-gallon fee on gasoline. While the vast majority of the resulting revenues would be allocated for street, road and highway construction, 22 percent of the fund is earmarked for a new "Transportation Stabilization Fund" that would be subject to future legislative allocation - essentially open to negotiation among the legislature, the governor and interested transportation parties.

On the plus side, the reclassification as a "fee" means the funds could not be borrowed or re-directed for other purposes. However, due to Article XIX restrictions, use of the funds for transit purposes would be limited to guideway and rail projectss, leaving day-to-day transit operations needs out of the loop.

By cutting the STA to $150 million, legislators in effect enacted a 92-percent cut in available transit-dedicated funding. Some acknowledged that transit has already borne more than its fair share of the current budget burden, and that the measures passed today emphasize the need to reverse that trend.

"The transportation finance bill comes with Article XIX restrictions and that means no public transit operations - that is a problem, and I commit to working on this problem in the next year," said Sen. Alan Lowenthal (D-Long Beach) during the floor debate. "We need public transit now more than ever, and we do not now have a sustainable funding stream for transit operations." Lowenthal is Chair of the Senate Committee on Transportation.