State Budget Update

State Budget Hits Public Transit Hard

February 23, 2009
Sacramento lawmakers finally reached agreement on how to close an estimated $42 billion shortfall (through June 2010) in the state’s General Fund. The approved budget, which makes revisions to the current year’s budget and provides funding through FY 2009-10, delivers a major blow to public transit by halving State Transit Assistance (STA) funding for the duration of FY 2008-09 and eliminating it entirely in FY 2009-10.

Whereas the adopted FY 2008-09 budget provided $306 million statewide for STA, the proposed revision would reduce the current year’s amount to $153 million. This cut amounts to a $55 million hit to Bay Area transit operations, including $40 million in revenue-based funds and $15 million in population-based funds. When compounded with declining revenue from other sources, including voter-approved county sales taxes and Transportation Development Act (TDA) funds that are also derived from sales taxes, these STA cuts will likely result in operating shortfalls for most of the region’s transit operators. The cuts will also have a significant impact on MTC’s regional programs currently funded by STA, including the Lifeline Transportation program, TransLink® and 511. For complete details on the proposed cuts to STA by operator, click here.

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