Search title image

TRANSACTIONS NEWSLETTER ONLINE

August/September 2000

News Brief

Sacramento Gives Big Boost to Transportation Funding
In early July, Gov. Gray Davis and the California Legislature gave transportation its biggest one-time cash infusion in over a decade, enacting into law a $6.8 billion, five-year spending plan aimed at helping the state's urban areas deal with rapidly worsening traffic congestion. The Governor's Traffic Congestion Relief Program, as it's being called, is a three-bill package (Assembly Bill 2928 and Senate Bill 406, plus the fiscal year 2000-01 state budget) based on the widely publicized transportation plan released by Gov. Davis in April, with some revisions by the Legislature.

The plan includes funding for many of the projects identified in MTC's Bay Area Transportation Blueprint for the 21st Century, forwarded to the governor and the Legislature in March.

Even as California's strong economy continues to overflow state coffers with tax dollars, deciding how to fund the billions in transportation improvements was a challenge. In the end, the governor and the Legislature agreed to a financing plan that relies primarily on the state sales tax on gasoline -- which would be diverted exclusively to transportation purposes for a five-year period.

Specifically, the congestion relief package funds $5.4 billion in specified transportation projects statewide, using $1.5 billion in FY 2000-01 General Fund revenues, $500 million in revenues from the sales tax on gasoline in FY 2000-01, plus an additional $678 million per year, for the next five years, in revenues from the sales tax on gasoline.

Gasoline sales tax revenues over and above $678 million per year (for the next five years) will be divided into three pots: 20 percent will be channeled to the Public Transportation Account to underwrite transit operating costs, 40 percent to Caltrans for capital improvements to the state highway system and major transit lines, and 40 percent to cities and counties for local streets and road maintenance. (Local streets and roads are also slated to receive $400 million of the $2 billion in FY 2000-01 spending.) These additional funds are expected to amount to $1.4 billion over the five-year period, raising the value of the state transportation funding package to $6.8 billion in total.

The Bay Area's share of the $5.4 billion in project funding is approximately $1.7 billion. Of this amount, $1.4 billion -- or 84 percent of the regional total -- will be used to finance public transit improvements. Specific projects earmarked for funding include:

  • Caltrain upgrades and new express service ($127 million);
  • more frequent trains on the Altamont Commuter Express service ($37 million);
  • the proposed BART extension to the South Bay ($725 million);
  • the purchase of 100 new low-emission buses for the Regional Express Bus Program, which will utilize the region's network of high-occupancy-vehicle (HOV) lanes ($40 million);
  • construction of a northbound HOV lane for Interstate 680/Sunol Grade ($60 million);
  • the widening of U.S. Highway 101 and addition of HOV lanes from Petaluma to Novato ($21 million).
The Bay Area's $1.7 billion in project funding is only just shy of the $1.8 billion in funding requests contained in MTC's Blueprint phased implementation plan, although there are key differences between the two plans in terms of project mix and funding levels.

Also, with the exception of the Caltrain upgrade, which is now fully funded, all the projects receiving the state congestion relief funds still require supplemental funding from other sources. With local funding being one important additional revenue source, county-level half-cent transportation sales taxes -- which still face a 2/3 vote hurdle due to the failure of SCA 3 (Burton) -- will likely be crucial components of a full-funding package for many projects.
-- Joe Curley

For more information on the statewide plan or the Bay Area Transportation Blueprint for the 21st Century, click here.

Contents