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1/12/2004



Rail News: Rail Industry Trends

California governor proposes shifting transportation-intended gas tax funds in FY2005


California transportation funding could be scarce in fiscal-year 2005 as state officials attempt to reduce the state’s multi-billion-dollar budget deficit.

Late last week, Gov. Arnold Schwarzenegger released his proposed FY2005 budget, which includes a proposal to return all available Proposition 42 gasoline sales tax revenue — about $1.2 billion — to the general fund.

Approved by California voters in March 2002, Proposition 42 dedicates gasoline sales-tax revenue to the Transit Congestion Relief Plan, designed to improve mobility, reduce congestion and maintain public transportation systems.

However, if the governor’s proposal is approved, it would mark the second time in two years that Proposition 42 funds were not used toward intended projects, according to a statement by California Transit Association.

"Calling for this large of a diversion of Proposition 42 funds sends a conflicting message about commitment to solving the state’s transportation problems, fostering economic development and improving the quality of life for all Californians," said Joshua Shaw, the association’s executive director. "Transit agencies across California will now be forced to balance their budgets on the backs of the riding public."



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