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After months of budget hearings and discussions with stakeholders, including the Association, the Legislature introduced two identical bills reflecting the Senate and Assembly's two-party agreement on the FY 2023-24 budget bills. These bills, SB 101 (Skinner) and AB 101 (Ting), propose significant funding for transit capital and operations above the Governor's proposed FY 2023-24 budget.
These bills would restore $2 billion in General Fund support to the Transit and Intercity Rail Capital Program (TIRCP), returning General Fund investment in the program to $4 billion total for FY 2023-24 and FY 2024-25. As specified in the FY 2022-23 budget, this funding would flow to regions on a population-based formula for investment in transit and rail capital projects; however, regions would receive new flexibility to direct up to 100% of this funding to meet the operational needs of agencies in their jurisdiction.
These bills would also appropriate $811 million in new and previously appropriated transit funding for the newly created Zero-Emission Transit Capital Program. This funding would flow through a yet-to-be-determined formula. While the funds allocated for the Zero-Emission Transit Capital Program are proposed for capital projects, these funds will also be flexible and may be applied to operations.
Please see the following detailed breakdown of the sources of Zero-Emission Transit Capital Program funding:
- $331 million - Allocated from the Greenhouse Gas Reduction Fund (GGRF)
- Zeroes out the Governor's proposed GGRF funding for zero-emission buses and infrastructure, which would be administered by the California Air Resources Board (CARB) and California Energy Commission (CEC), for FY 2022-23 through FY 2025-26, and shifts this funding to the Zero-Emission Transit Capital Program ($111 million).
- Includes new GF investment for the Zero-Emission Transit Capital Program ($220 million).
- $280 million - Allocated from the Public Transportation Account (PTA)
- Zeroes out the previously appropriated PTA funding for Zero-Emission Rail and Transit Demonstrations Projects, administered by the California State Transportation Agency (CalSTA), and shifts this funding to the Zero-Emission Transit Capital Program ($280 million).
- $200 million - Allocated from the General Fund
- Zeroes out the previously appropriated General Fund support for Zero-Emission Rail and Transit Demonstrations Projects, administered CalSTA, and shifts this funding to the Zero-Emission Transit Capital Program ($100 million).
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- Zeroes out previously appropriated General Fund support for zero-emission buses and infrastructure, administered by CARB and CEC, for FY 2022-23 through FY 2025-26, and shifts this funding to the Zero-Emission Transit Capital Program ($100 million).
- $300 million - Proposed for Investment in Future Years
- No funding source has been identified at this time.
The Association's Transit Operations Funding Subcommittee reviewed the details of the Legislature's FY 2023-24 budget earlier today. As a body, the subcommittee acknowledged that this plan makes progress toward our goal of addressing the operations funding needs of agencies statewide but may force trade-offs between capital and operational investments. As we continue to evaluate the budget, we will continue to fight for additional resources to make further progress on addressing our industry's operations funding needs and to limit trade-offs between capital and operations.
In response to the Legislature's FY 2023-24 budget, Executive Director Michael Pimentel issued the following statement, which reflected the subcommittee's feedback:
"The Legislature has listened to our calls for support to address the most urgent funding needs of California's transit agencies. Today, as agencies recover from the pandemic and reform their operations to regain riders and build for the future, funding from the State of California, as identified in the Legislature's plan, will be crucial to keeping millions of Californians across the state moving - to their jobs, school, grocery stores, and loved ones.
"The Legislature's plan restores the $2 billion transit capital commitment included in the 2022 budget agreement and provides $1.1 billion in flexible funding to prevent service cuts and job losses at agencies statewide. While we continue to review the plan and observe that the funding will not address the full near-term funding need of California's transit agencies, we believe the plan represents real, measurable progress toward saving our systems. We are thankful for legislative champions like Senate President pro Tempore Toni Atkins (D-San Diego), Assembly Speaker Anthony Rendon (D-Lakewood), Assembly Budget Committee Chair Phil Ting (D-San Francisco), Senate Budget Committee Chair Nancy Skinner (D-Berkeley), and Senator Scott Wiener (D-San Francisco) who have worked tirelessly to prevent cuts and protect progress at one of the most pivotal points in our collective history.
"In the weeks ahead, we look forward to continuing to work with the Legislature and Administration to finalize a budget that preserves our public transportation network, supports the growth and expansion of our systems to meet the needs of generations to come, and that continues to support our industry's transition to zero-emission technologies. We remain committed to working with the Legislature and the Administration in the months and years ahead to further support California's transit agencies and to address the full balance of their near-term and long-term needs. With the release of the Legislature's plan, it's clear that leaders from across California - from state legislators and members of Congress to environmental, labor, social justice, business, and transportation organizations - all agree - we must save public transit."
We expect the Senate and Assembly to pass the above budget bills on Thursday, June 15 to meet the constitutional deadline. However, the houses will continue negotiations with the Governor's Administration on the final budget agreement, which will be sent as a follow up to SB/AB 101. In years past, these have come in the form of "budget bills jr.," as well as in budget trailer bills.
Part and parcel to a final deal on transit funding are necessary accountability measures. These are still being negotiated between the three parties and could take several weeks to finalize (we believe these will come in the form of trailer bill before the Legislature breaks for summer recess). We understand accountability measures will need to be followed to access flexible operations funding.
The Legislature and Administration are considering the Association's Accountability and Reform Framework, along with our proposed statutory relief measures. Though, at the very least, we anticipate it will include the following provisions as they were included in the Assembly and Senate Budget Plans:
- Extends provision that temporarily holds harmless transit operators that receive state funding and whose ridership levels have been impacted by COVID-19.
- Extends provisions that temporarily eliminate financial penalties for noncompliance with transit funding efficiency measures in the Transportation Development Act and the State Transit Assistance Program.
- Incorporates the provisions of AB 761 (Friedman and Gonzalez) to create a task force to examine the ways to improve transit and increase ridership in the long term, including reforming the Transportation Development Act.
We hope to have more details in the days ahead.
To read more, see the Senate Budget Plan.
For questions about this Funding Update, please contact Executive Director Michael Pimentel
(michael@caltransit.org).
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