Local Transportation Funding Remains In Jeopardy
By Paul McIntosh, Executive Director
pmcintosh@counties.org
Unfortunately, more than $2 billion in county and city transportation revenue remains very much in play in the budget debate. A significant amount of this loss is from the local portion of the gas tax or Highway User Tax Account (HUTA). The HUTA proposal is not a loan or suspension, but an outright takeaway, which is contained in budget trailer bills SB 72 and AB 190 (identical bills).
The duration of the take is for two years, and is equal to nearly $1.7 billion shared equally between counties and cities. CSAC and the League of California Cities adamantly oppose this action that will result in significant job losses to both the public and private sector and will compromise our ability to meet critical public safety needs. No action has been taken on these bills yet.
The remaining transportation revenue in jeopardy is the local portion of Proposition 42 or the sales tax on gasoline. For cash management purposes, the Department of Finance has included the deferral of two quarters of county and city Proposition 42 revenues totaling $288 million. SB 74 and AB 192 (identical bills) contain the language to trigger this loan, which is scheduled to be paid back in May of 2010.
Most alarming about this loan is that the approach contained in the budget trailer bill does not follow constitutional provisions put into law by the passage of Proposition 1A in 2006 to provide further protections for Proposition 42 revenues. Legal opinions are being sought to determine whether this approach is constitutional as it appears to avoid triggering these protections, which includes: a required payback in three fiscal years with interest, payback before borrowing again, and limiting borrowing to twice in ten years. This would be an alarming precedent for both Proposition 42 and county and city discretionary revenues which share the same constitutional protections passed by voters in 2006 and 2004, respectively.
PRINTER-FRIENDLY VERSION
|
