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Friday, May 26, 2006
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VOLUME 106
Issue 17
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Proposition 42 and the State Budget
by James Keene, Executive Director
jkeene@counties.org
Due to the state’s strong revenue performance, transportation is expected to receive the full funding from Proposition 42 for the second year in a row. The value of this revenue stream for the next fiscal year is estimated at $1.4 billion. The state freeway system and transit will benefit from these funds as follows: $678 million to the Traffic Congestion Relief Projects (TCRP), $582 million to the State Transportation Improvement Program (STIP), and $146 million to the Public Transportation Account. Cities and counties will not receive revenues for local streets and roads from Proposition 42 funds attributed to 2006-07 and 2007-08 since we received funds from the state in 2001-02 and 2002-03, even though no funds were provided to transportation in those years due to fiscal constraints.
Cities and counties remain dependent upon approval of the Governor’s May Revise proposal for early payback of $920 million, which would partially repay the loan that was made from the 2004-05 suspension of Proposition 42. The Governor has proposed the following allocation: $430 million to the TCRP, $245 million to the STIP, and $245 million to cities and counties.
However, the early payback will be going to the Budget Conference Committee expected to begin work as soon as May 31.
The Senate Budget Subcommittee No. 4 voted to reduce the early payback by half from $920 million to $460 million. The committee proposed to allocate the repayment as follows: $205 million for the TCRP, $127.5 for local streets and roads and $127.5 for the STIP. The Assembly Budget Subcommittee No. 5 voted in favor of the early payback at the $920 million level, but made some suggested changes to reduce the TCRP allocation and include a payment to transit as follows: $308 million for TCRP, $245 million for STIP, $245 million for local streets and roads and $122 million for transit. Assembly Member and Chair of the Budget Subcommittee Pedro Nava, Assembly Member Lois Wolk and Assembly Member John Benoit should be applauded for their support in this effort.
As the Joint Budget Conference Committee begins work next week, CSAC, the League of California Cities, and the Regional Council of Rural Counties remain committed to advocating for this early payback and the full funding of the local streets and roads piece in particular, since there will be no allocation for that purpose next year without this early repayment.
Overall, the full funding of Proposition 42 and this early payback are critical to keep projects going next year as we transition into what is hopefully a historic re-investment in the state’s transportation infrastructure dependent upon the successful passage of the Proposition 42 permanent fix and the bonds both appearing on the November ballot as Propositions 1A and 1B respectively.
PRINTER-FRIENDLY VERSION
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Published by
The LEGISLATIVE BULLETIN is published weekly during the State Legislative Session by the California State Association of Counties, 1100 K Street, Suite 101, Sacramento, CA 95814.
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