State Budget Update

State Budget Update Forecasts Higher State Transit Assistance Funding

May 24, 2011
Governor Brown’s May Revision of the FY 2011-12 State Budget includes revised estimates of the cost and revenue for all state-funded programs. According to the Department of Finance, the State Transit Assistance Program, which provides flexible funding that may be used for transit capital or operating expenses, is now forecast to provide $416 million statewide, up from $330 million in January. This increase is a result of higher diesel sales tax revenue, which comprises the sole source of revenue for STA.

Based on this funding level, the San Francisco Bay Area would receive approximately $150 million for local transit operators and regional transit coordination efforts, as shown here. Given the volatility of diesel fuel prices, the final amount will certainly change. Furthermore, STA funding is based on the actual revenue generated so transit operators will not know their final STA amount for FY 2011-12 until after the fiscal year ends.

Until a final state budget is adopted, there is still some risk that the Legislature could divert a portion of the sales tax on diesel fuel to eliminate the remaining $10 billion shortfall in the General Fund. In the worst case scenario, STA funding could be reduced by up to 41 percent.

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