Following the New Year's Eve preview, Friday's official release of the Governor's proposed 2009-10 state budget contained little in the way of surprises - or good news, from a transit funding perspective. As promised, the plan seeks to completely eliminate the State Transit Assistance (STA) Program, the only ongoing source of state funding for day-to-day transit operations. The Administration's latest proposed revision of the current year's budget seeks to cut $153 million from the $306 million that was allocated to the STA in the 2008-09 budget that was adopted in September. This is essentially the same amount of STA funding included in the latest budget package passed by the Legislature (which the Governor vetoed on Wednesday). The Controller has already issued $76 million worth of checks for the 1st quarter of 08-09. Consequently, since no plan on the table contains any more than $150 million for the STA, only $74 million would remain for disbursement once the revised Budget Act is signed. In addition, estimated revenues from spillover have dropped to $1 billion, down from the $1.4 billion level estimated in the September budget, and are predicted to drop to a total of $90 million next year due to a steep decline in gas prices. The Governor still proposes to divert all future spillover (if any materializes) to the Mass Transportation Fund to pay for G.O. Bond debt service and home-to-school transportation. Last week's veto of the Democratic-crafted plan passed on December 18 was blamed in part on the Governor's reluctance to confront legal challenges by Republicans and various anti-tax groups (a lawsuit was filed contending that the plan was unconstitutional, but the Court of Appeals rejected the suit because the plan was vetoed). Nevertheless, Democrats continue to fine tune the proposal to address the Governor's desire for relaxation of environmental and labor regulations in the interest of "economic stimulus." Association members can view our latest Funding Update for a full analysis of the Governor's proposal.