Keep California's Working Families Moving
California's transit agencies are facing a critical moment, and working families' access to transportation is in danger. The pandemic has created an operations funding deficit for transit agencies, totaling at least $6 billion over the next five years. With supplemental federal funding about to end, we are calling on California to step in with a significant investment of $5.15 billion over the next five years to support our essential transit systems.
If we allow severe cuts to transportation budgets and do not provide new transit operations funding, California’s most vulnerable communities will suffer the most. This will disproportionately affect families and those who rely on public transit.
The result will be painful service cuts, which will push many commuters back into their cars and increase traffic and carbon emissions – a step backward in our fight against climate change.
"Saving transit in California is key to an equitable recovery.” CalMatters
Despite the challenges posed by the pandemic, California's transit agencies are adapting and innovating to attract more riders. They have implemented various strategies, including rider-focused schedules, enhancing the cleanliness and safety of transit vehicles and stations, providing real-time travel information, and offering targeted fare-free programs. However, these efforts may not be enough, and will require additional funding, to achieve a full recovery in the short term.
It's crucial that we don't go backward. Instead, California needs to support public transit agencies to maintain and improve service for those who rely on them and to help the state meet its long-term environmental and equity objectives. We need to keep working families moving and avoid jeopardizing our public transportation.
Join us in our call to Save California Transit. Let's move forward together to create a stronger, more equitable, and sustainable transportation network for all Californians.
Our Funding Request
To address California transit agencies’ near-term funding needs, the California Transit Association requests that the State of California provide $5.15 billion from Fiscal Years 2023-24 to 2027-28 for transit operations from a collection of state funding sources that have historically supported transit capital and operations. This funding request was developed by the Association’s Transit Operations Funding Subcommittee, comprised of agencies and organizations from across California.
Specifically, we request the following:
- An Additional Appropriation of Revenue from Sales Tax on Diesel Fuel ($1.35B from FY 2023-24 through FY 2027-28): Under current law, California transit agencies receive approximately 80% of revenue generated by the state sales tax on diesel fuel. In usual years, the remaining balance of revenue flows to the state’s General Fund. However, AB 194 (Committee on Budget) [Chapter 55, Statutes of 2022], last year’s taxation budget trailer bill, paused collection of the portion of the sales tax on diesel fuel that generates the remaining balance of revenue through October 1, 2023.
We request that the State of California direct the full balance of revenue generated by the state sales tax on diesel fuel to transit operations for the next five years – from FY 2023-24 through FY 2027-28 once collection of that portion of the sales tax on diesel fuel resumes. This element of our request would provide transit agencies with approximately $213 million in FY 2023-24 and approximately $284 million annually from FY 2024-25 to FY 2027-28 for operations.
- An Additional Appropriation of Unallocated Cap and Trade Revenue ($2.5B from FY 2023-24 through FY 2027-28): In its report to the Senate Budget Subcommittee No. 2, entitled “Cap-and-Trade Spending Overview,” the Legislative Analyst’s Office identified $800 million in unallocated (or “discretionary”) Cap and Trade revenue in FY 2022-23 and FY 2023-24 above the Governor’s proposed FY 2023-24 budget, which includes a significant investment of Cap and Trade revenue in zero-emission vehicles and AB 617 communities.
We request that the State of California provide $500 million in discretionary Cap and Trade revenue annually to transit agencies for operations for the next five years – from FY 2023-24 through FY 2027-28.
- The Conversion of Transit Capital Funding to Transit Operations Funding ($300M in FYs 2026-27, 2027-28): Under current law, the Transit and Intercity Rail Capital Program receives $650 million annually for distribution as competitive grant for transformative transit capital projects through the Transit and Intercity Rail Capital Program. These funds have been encumbered through the end of FY 2025-26 under previously approved multi-year grant awards through the Transit and Intercity Rail Capital Program.
We request that the State of California convert $300 million of the $1.3 billion that will be available in FYs 2026-27 and 2027-28 from capital funding to operations funding. In this process, we urge the State to ensure that all projects that previously received a multi-year commitment of funds see those commitments upheld.
- Maintenance of $4 Billion General Fund Investment in Transit, Flexibility to Use this Transit Capital Funding for Transit Operations (Up to $1B in FYs 2023-24 through FY 2027-28): The adopted FY 2022-23 budget commits $4 billion in General Fund revenue in FYs 2023-24 and 2024-25 for transit capital projects, to be distributed to regions via a population-based formula. The Governor’s proposed FY 2023-24 budget proposes to reduce that commitment by $2 billion.
We urge the State of California to maintain its original $4 billion commitment for FYs 2023-24 and 2024-25. However, we request that the State grant regions the authority to “flex” up to 25% of their share of funding in these years for transit operations. This element would preserve at least 75% of this funding for building transformative capital projects, as originally directed by the FY 2022-23 budget.