SOURCE: League of California Cities

League of California Cities

January 08, 2010 19:45 ET

League of California Cities: Governor's Budget Raids Transit Funding and Threatens Stability of Other Vital State and Local Government Transportation Funds

SACRAMENTO, CA--(Marketwire - January 8, 2010) - The budget released today by Gov. Arnold Schwarzenegger eliminates most funding ($1.5 billion) for transit agencies across California and destabilizes other critical transportation funding sources by proposing to remove the sales tax on gasoline in exchange for additional excise taxes through a complicated tax swap scheme.

"This is just the kind of Byzantine proposal that we've seen from the state over and over again in recent years that erodes voter confidence in state government," said Chris McKenzie, League of California Cities executive director. "Destabilizing local infrastructure funding in this way puts California on the wrong track to reinvigorate the economy."

As recently as 2006, voters went to the ballot box and supported the protection of gas tax revenues for all transportation purposes including transit. Recent court decisions have also clarified that prior legislative attempts to raid transit dollars were illegal. Public transit is a vital component of California's transportation system and for many residents it is their only mode of transportation.

Cities remain greatly concerned that transportation funds that are proposed to be allocated to local governments from the additional excise tax would be more vulnerable to future legislative raids. Just last year, the Governor proposed taking almost $1 billion of transportation excise taxes from local governments to fund state budget obligations. This proposal was narrowly defeated in the final hours.

The League of California Cities continues to review all aspects of the Governor's budget proposal for additional impacts on cities.

Contact Information

  • Contact:
    Eva Spiegel
    (916) 658-8228
    Cell: (530) 400-9068