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TRANSACTIONS NEWSLETTER ONLINE

February 2002

Legislative Mission 2002: Defend and Maintain

As the 2002 legislative season gets under way, the political climate includes a mix of hope for long-term transportation funding solutions and concerns about near-term threats to existing funding sources.

The long-term funding would come from Proposition 42, which would permanently dedicate the existing state sales tax on gasoline to transportation purposes. If passed by a majority of voters in the March elections, the measure would extend the two-year-old Traffic Congestion Relief Program, which otherwise would expire in 2007-08.

Meanwhile, with the state of California facing a $12 billion-plus budget deficit, MTC has put protection of existing transportation funding at the top of its 2002 legislative agenda. But the job won't be easy. The governor's proposed budget for fiscal 2002-03 calls for once again using loans from the State Highway Account and the Traffic Congestion Relief Program to help balance the budget.

"It's important that we find a way to balance the budget without delaying needed highway and transit improvements," said Randy Rentschler, manager of Legislation and Public Affairs for MTC.

MTC will support legislation that would repeal a recent Board of Equalization ruling that expands the definition of "farm to market" and exempts more vehicles from the state sales tax on diesel fuel. The ruling is expected to result in a $50 million annual reduction in Public Transportation Account revenues. This would translate into a $9.5 million yearly cut in funding for Bay Area transit operators at a time when most are already strapped for cash and the region is working to boost transit ridership.
-- John Goodwin

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