Budget, California, Transit Funding

Governor Will Veto Gas Tax Swap Legislation

Governor Schwarzenegger has indicated he will veto the legislative measures that would have executed the gas tax swap mechanism, while restoring some of the funding that transit agencies lost when the State zeroed out State Transit Assistance (STA) funds.  Agencies throughout California had previously relied on STA to fund transit operations.  The Legislature made a good effort to produce a revenue neutral compromise that would have partially funded a critical transit need that the State abandoned this fiscal year, while maintaining the Governor’s basic swap mechanism.  But the Governor, in his typically warped approach for addressing California’s budget crisis, refused to sign the legislation into law because the Legislature’s version of the tax swap did not reduce the tax burden felt by drivers at the pump.

I unfortunately do not have any time right now to to provide a more detailed post, but I did want to at least alert readers to this development.  There were flaws with the legislation, and the transit funding scheme passed by the Legislature would not have restored to transit nearly the amount of money that the State has taken away.  But pragmatically, the proposed state assistance, while diminished from prior years, would have eased the widening budget deficits of transit agencies.  As we discussed previously, even the $36 million that the San Francisco MTA would have received through the end of next fiscal year (and $31.4 million in the following fiscal year) would have been more than enough to offset the money that the MTA expected to save with the 10% system-wide service cut that is planned to go into effect starting May 1.  The Governor’s denial of that funding means transit advocates must continue to push the MTA Board to pursue measures that will realize savings and increase revenues, ideally without the declaration of fiscal emergency that would pave the way for further service cuts and  fare increases.  The bill would have provided about $13 million for AC Transit and $15 million for VTA through the next fiscal year. The bill would have also provided about $26 million to BART through the next fiscal year, and almost as much in the following fiscal year, which would have helped that agency weather a projected deficit of more than $60 million over the next four years.  Instead, it looks like transit agencies throughout California will have to continue on as they have this year, with the STA zeroed out.



3 thoughts on “Governor Will Veto Gas Tax Swap Legislation

  1. So there is still some STA money coming?

    Posted by Evan | 17 March 2010, 9:23 am
  2. If the gas tax swap is off the table, doesn’t that meet the state must start funding transit based on the court ruling? And what is the immediate impact of the court ruling? Will there be funds coming this year to reduce agencies’ budget deficits? Lots to figure out as we pursue our advocacy strategies.

    Posted by Daniel | 17 March 2010, 12:49 pm


  1. Pingback: About Face: Governor Signs Gas Tax Swap Legislation, After All « Transbay Blog - 22 March 2010

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