The Assembly Budget Subcommittee #5 acted to reinstate about $318 million of the State Transit Assistance Program funds originally proposed to be cut by the Governor. That would bring the 2008-09 STA Program up to $623.7 million. Language was also adopted stating legislative intent to maintain that level of funding on an ongoing basis. The Assembly subcommittee, however, did not restore any funding to the transit capital program managed as part of the State Transportation Improvement Program (STIP).

Senate Budget Action

The Senate Budget Subcommittee #4 also took action to restoring $317 million back to the Public Transportation Account (PTA) to match the funding level in the Assembly.

The Senate, however, chose a different course and restored the State Transit Assistance (STA) Program to $494 million (an amount minus $129 million, as compared to the Assembly action that included $623.7 of STA funds). The $129 million was dedicated to transit capital projects in the STIP. Neither the Governor nor the Assembly proposed any funds for transit capital STIP projects in this year's budget.

Even if the Assembly and Senate numbers hold, transit accounts are still on track to suffer a $1.1 billion diversion of transit funds to the General Fund.

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May 15, 2008
The Administration’s May Revise of the FY 2008-09 state budget calls for shifting approximately $1.4 billion in public transit funds to the General Fund in an effort to balance the state General Fund.

If imposed, these cuts to public transit would be on top of a $1.3 billion diversion of state funds to the General Fund in the prior fiscal year, for a total loss over the two-year period of approximately $2.7 billion of transit dollars badly needed for service and other improvements. These tax dollars are derived from the sales tax on motor vehicle fuel, the exact same tax that voters overwhelmingly approved — twice — to direct to transportation (Proposition 42 in 2002 and Proposition 1A in 2006).

Click here for more more details of the budget transfer and the affected Bay Area transit agencies.

Gas Excise Tax Revenue – Effect on State Highway Projects

Under the May Revise of the Administration’s budget, funding for the State Highway Operation and Protection Program (SHOPP) would be $100 million less than initially proposed due to further declines in projections for gasoline excise tax (per-gallon) revenues, primarily because gasoline usage year over year also is down. Total excise tax revenues are projected to be $225 million lower in 2008-09 than previously calculated. However, $125 million in funding identified in prior years is proposed to backfill the revenue loss, reducing the total hit to the SHOPP program to $100 million. Total funding for the SHOPP will be approximately $2.5 billion in 2008-09.

High Speed Rail Funding

The May Revision includes $10 million from the Public Transportation Account to sustain current engineering and project management work and mobilize contract resources for all corridors of California’s proposed High Speed Rail system prior to the November bond election. The May Revision also proposes to appropriate $8.2 million from Proposition 116 for additional environmental studies and engineering work on the Fresno-to-Sacramento segment.

Governor's Full Budget Summary

Main Legislative Update page