The Legislature and the Governor have come to an agreement on the 2023-24 state budget, including for major transit funding and the accountability framework. But the Legislature has yet to take action on key components of the Governor's infrastructure streamlining proposal.
By Arianna Smith
Managing Editor
Transit California
When it comes to California state budget actions, only one thing is certain: There’s always something more.
In the last week of June 2023, Governor Gavin Newsom, Senate President pro Tempore Toni Atkins (D-San Diego), Assembly Speaker Anthony Rendon (D- Lakewood), and legislative Budget Chairs from the Senate and Assembly collectively announced that they had reached an agreement to pass the 2023-24 California state budget.
On the same day, and as part of the overall budget agreement, the Legislature passed two bills that contained the transit-related funding and mechanisms for accessing those funds. As detailed in the Association’s Funding Update, the first measure, AB 102 (Ting) (colloquially referred to as the "Budget Bill Jr."), restores $2 billion in General Fund support for the Transit and Intercity Rail Capital Program (TIRCP) and commits $1.1 billion in new and previously appropriated transit funding for the newly created Zero Emission Transit Capital Program. The second measure, SB 125 (Committee on Budget and Fiscal Review (the "Transportation Trailer Bill") implements new transit accountability and reform requirements on regions and their transit agencies to access funding and extends statutory relief measures for transit agencies; it also creates a new state-level Transit Transformation Task Force at the California State Transportation Agency (CalSTA). For these bills to take effect, the Governor must sign them no later than July 9. Unlike regular policy bills, and like the main budget bill, the Budget Bill Jr., and trailer bill take effect immediately upon the Governor’s signature.
Governor Newsom said of the budget agreement, “In the face of continued global economic uncertainty, this budget increases our fiscal discipline by growing our budget reserves to a record $38 billion, while preserving historic investments . . . We’ve attached new accountability measures for transit and homelessness investments. And we are accelerating our global leadership on climate by fast-tracking the clean energy projects that will create cleaner air for generations to come.”
Senate President pro Tempore Atkins agreed: “The final budget we passed today is fiscally responsible, protects our reserves, and avoids cuts to core programs – all without increasing taxes on the middle class.” She added that the budget agreement “addresses the immediate needs of transit agencies.”
“This is a budget for the future,” said outgoing Assembly Speaker Rendon. “I want to thank the hard work of our Budget Committee members, our Senate partners, the Governor and the dedicated staff who worked countless hours to achieve this result.”
Senate Budget Committee Chair Nancy Skinner (D-Berkeley) heralded the budget’s acknowledgement that public service providers continue to face challenges as a result of the pandemic, saying, “I am particularly proud that the 2023 budget strengthens California's nation-leading efforts to combat climate change and expands much-needed funding” for “public transit and other essential services still suffering from pandemic-related impacts.”
Although budget action has now been taken on transit funding and the transit accountability framework, several Association-supported transit-related proposals that were joined to the budget in the budget agreement remained pending in additional bills. These proposals were still awaiting final legislative votes at the time this article went to print. The Governor announced these Association-supported policies in May at a press conference in Stanislaus County as part of a broad infrastructure streamlining package for which the Association and its members provided critical insights. Association Executive Director Michael Pimentel attended the press conference to affirm the Association’s public support for the package. These proposals were first introduced by the Newsom Administration as trailer bills, but as part of the budget agreement, were later introduced as policy bills.
One such bill is SB 149 (Caballero and Becker), which incorporates the Governor’s proposals for judicial streamlining for the California Environmental Quality Act (CEQA). As currently written, the bill allows up to 10 state transit projects and 10 local transit projects to undergo an expedited judicial review process, limiting litigation – including appeals – to 270 days. The policy is modeled after SB 7 (Atkins), a 2021 law that only applies to certain large projects related to housing, clean energy, and manufacturing. Only transit projects that are certified by the California State Transportation Agency and support the California Transportation Agency’s Climate Action Plan for Transportation Infrastructure Framework would be eligible to be included in the list of SB 149’s 20 projects.
SB 149 also includes administrative reforms to reduce transit project delays related to litigation by specifying procedures related to the preparation of the public record for judicial review of challenges under CEQA. Transit agencies whose projects are selected to use this streamlined judicial process must prepare the administrative record at the same time as the administrative approval process.
According to Association advocate Matt Robinson, SB 149 “helps condense that timeline and therefore get things through faster.” However, he cautioned that “[w]e are not going to know the full benefit until we use it in practice.”
A Department of Finance (DOF) fact sheet stated that the policy changes in SB 149 “would accelerate critical state and local infrastructure projects that advance safety, rehabilitate the state’s aging transportation infrastructure, or address the impacts of climate change.”
Also of potential interest to Association members are certain provisions of SB 146 (Gonzalez and Friedman), another bill still awaiting consideration by the Legislature. The measure would extend an existing sunset from 2025 to 2033 which authorizes California’s Secretary of Transportation to assume responsibilities of the US Secretary of Transportation under the federal National Environmental Policy Act of 1969 (NEPA). Further, the bill would expand the Secretary’s responsibilities under NEPA and other federal environmental laws to railroad, local public transportation, or multimodal projects implemented by local or regional agencies, subject to a state-federal memorandum of understanding.
DOF explained the need for extending and expanding this authorization, stating that the “[t]ermination of NEPA authority [in 2025] will delay environmental documents and increase costs for local projects like the Los Angeles Union Station (Link US) project, and the Altamont Corridor Express (ACE) rail projects. The amount of delay would vary – from one year for smaller environmental documents, to more than two years for larger environmental documents.” DOF continued, “Delays also result in tens of millions of dollars of higher costs for projects” because of inflation. For example, with inflation currently around 5 percent, a one-year delay to a $100 million project adds costs of $5 million. A two-year delay of a $1 billion project at 3 percent inflation would add costs of $61 million.”
Of the infrastructure package proposals, including those policies contained in SB 146 and SB 149, Governor Newsom said, “The only way to achieve California’s world-leading climate goals is to build, build, build – faster. This proposal is the most ambitious effort to cut red tape and streamline regulations in half a century. It’s time to make the most out of taxpayer dollars and deliver results while creating hundreds of thousands of good jobs. Not since the Pat Brown era have we had the opportunity to invest in and rebuild this state to create the clean future Californians deserve.”
The Legislature may consider and take a vote on SB 146 and SB 149 along with the other remaining trailer bills on any date before September 14. Under most circumstances, the Governor must sign these measures within 12 days of their passage by the Legislature, upon which they will immediately become law.
The Association's staff, member agencies, legislative champions, and Administration partners all successfully joined together to secure funds and to lead the way with forward-facing transit policy throughout the 2023-24 budget negotiations. The Association will continue to play a critical role in any additional budget actions through the remainder of the legislative session.