Budget Deal Is Not A Deal For Transit

UPDATE (23 February 2009): For updated figures on transit funding loss for FY2008-09, read this post.

The big piece of news in California is the long-overdue compromise in the state legislature over how to close the General Fund shortfall, which amounts to $42 billion through June 2010. The budget consists of $15 billion cuts to spending, $12.8 billion in temporary tax increases, and $11.4 billion in borrowing; the Governor may also make $600 million of additional cuts in line-item vetoes. The vote on a budget deal stalled for days, with just a single Republican vote shy of the 2/3 required for passage. Finally, after more than 45 hours, in what is supposedly the longest Senate floor session in the state’s history, Abel Maldonado (R-Santa Maria) supplied the needed vote by extracting substantial concessions. One concession was the elimination of the additional 12 cents to the gas tax; another was the approval of voter measures. If passed, one measure would prohibit legislative pay increases during deficits; another measure would establish an open primary system, in which the top two vote-getters in the primary election would advance to the general election regardless of party.

As we discussed last week, this budget compromise eliminates State Transit Assistance (STA) funds, which transit agencies throughout California rely on for operations money. Here is the breakdown for major Bay Area transit agencies, as detailed by the Metropolitan Transportation Commission. The right column represents the loss for 2008-09; that is, the difference between the remaining $76.1 million STA allocation (which basically represents the first quarter) and the amount that agencies would have received had the budget retained the full $306 million of STA money:

Transit Agency/Operator
AC Transit	($5,410,711)
ACE (Alameda / Santa Clara)	($278,432)
BART	($14,779,223)
Caltrain	($2,813,018)
CCCTA (Contra Costa)	($1,641,454)
ECCTA (Tri Delta Transit)	($900,583)
Golden Gate	($2,246,952)
LAVTA (Wheels)	($638,333)
Marin / Napa / Solano / Sonoma	($3,639,695)
SFMTA (Muni)	($21,483,888)
SamTrans	($3,246,683)
Union City	($215,460)
Vallejo Transit	($416,951)
VTA	($9,148,617)
WestCAT	($354,809)
REGIONAL GRAND TOTAL	($83,006,586)

The regional grand total in the last line of the table reflects the loss of other STA funds not included in the table, including $5.9 million for the Regional Coordination Program (through which the Metropolitan Transportation Commission funds 511 and TransLink), $3.4 million for regional paratransit, and $6.4 million for the Lifeline Transportation Program. These regional programs will take a hit, on top of the transit agencies who will be deprived of an important source of money for operations.

Please note that there is a discrepancy here. The actual text of the budget legislation announces a cut of $153 million from the 2008-09 STA funds (out of $306 million total), which means that the State Controller will disburse funds for the first two quarters, but not the second two quarters. However, MTC has indicated that it would only receive the first quarter’s worth of STA funds, and the figures in the above table are based on that assumption. In that case, the $111,962,885 of STA money that the Bay Area would have received for 2008-09 is reduced to $28,956,299. Given the way the budget has turned out (the Governor apparently did not kill the second quarter of STA funds with a line-item veto), MTC’s reported figures are low. The Bay Area will get more money than this table suggests. Still, notwithstanding this discrepancy over the second quarter of 2008-09 STA funds, the biggest issue is that STA funds for the rest of FY2008-09 and for all of FY2009-10 have been eliminated altogether — and the budget actually suspends further allocations to STA through FY2012-13. This means that there will be a serious shortage of operating funds for transit agencies over the next five years. Transit agencies around the Bay Area are already raising fares, and they may cut service as well. Since the State is withdrawing itself from the business of providing necessary operating funds, additional sources of revenue will need to be tapped. Although the budget compromise with Maldonado removed the 12-cent gas tax increase, climate change impact fees present another potential avenue for generating revenue.