Transit Agencies Upset by Governor Schwarzenegger’s Plan to Divert Funds

Despite California Governor Arnold Schwarzenegger's pledge to be a good steward of his state's environment, the governor is expected to release a budget proposal this week that would gut transit funding and contravene both a state Supreme Court ruling and numerous public referendums mandating secure transit funding, a slap in the face to a proven green transportation strategy, say transit operators.

As reported recently in the LA Times, to close a looming $20.7 billion budget deficit, Schwarzenegger is expected to release a plan this Friday to eliminate the state's gas tax, which has specific mandates to provide funding for transit, and replace it with an excise tax that would not have transit funding requirements. The net effect would be 5 cents less per gallon at the pump and continued decimation of state funding for transit operators.

"It’s what we feared," said California Transit Association (CTA) spokesperson Jeff Wagner. "This proposal circumvents both the law and the will of the voters. The court ruled they had to stop doing it, so what do they do? They change the laws that were in place. Time and again, transit has been the piggy bank they’ve gone to to fill in the gaps in the other stuff. It’s shortsighted and it’s in blatant contravention of the voters’ will."

"[The proposal] will likely reduce revenues and everyone agrees that the last thing we need to do right now is reduce revenues," said Stuart Cohen, Executive Director of TransForm, a non-profit supporting transit and smart growth. "We’re seeing service cuts and fare hikes that are larger than we’ve ever seen. Many agencies have already depleted their reserves dealing with cuts over the past two years. I don’t think these agencies can take another year of it."

Wagner and the CTA were tempered in their reaction to the victory in court last year, saying they assumed the governor could come up with a scheme to continue taking money from transit to plug the general fund hole. "We knew that our lawsuit victory would provide us with some reprieve, but we were cautious. We knew that it wasn’t beneath this administration."

Asked how the governor can profess a strong environmental record and still gut transit funding, Wagner offered: "I imagine he’s someone that has seldom had to rely on [transit]. There’s a real disconnect between this guy that’s obviously trying to hang his hat on his environmental record. At the same time he’s crowing about that, he’s eviscerating the funding for one primary program we have to reach those goals."

H.D. Palmer, Deputy Director for External Affairs at the California Department of Finance, would not comment on the governor's plan, saying it would be premature to discuss the details before the Governor presents them to the legislature this Friday. When asked how the governor's continued use of transit funds for general fund deficits would affect his environmental record, Palmer refused to speculate, saying only that to close the budget gap, his department is committed to "looking at every option to save money."

The reaction from local transit agencies was predictably unfavorable.

"The governor is trying to do an end run around the California Supreme Court, which recently ruled the state's last money grab of transit funding was illegal," said BART spokesperson Linton Johnson, whose agency would have received over $30 million last year without the diversions. "It's a shame he's resorted to this, but sadly not surprising."

The San Francisco MTA, which lost out on $152 million of state funding over the past three years, could be forced to make further service cuts or consider fare hikes if the governor's plan is adopted. "Better transit service is one of the best ways to improve our environment, so if the state of California wants to reduce greenhouse gas emissions then it should re-consider the elimination of transit funding," said the MTA's Judson True.

Rather than bring another lawsuit to prevent raids, the CTA has joined with the League of California Cities and the California Alliance for Jobs to get a ballot initiative in this November's election that would put a larger firewall around transit funding. The Protect Local measure, if passed, would prevent "the state from taking or borrowing local taxpayer funds dedicated to public safety, emergency response, transportation and other vital local government services," according to the official website.

A press conference announcing the ballot initiative campaign will be held in Santa Rosa this Thursday, January 7th, and the campaign hopes to collect more than 1 million signatures in five months.

"A robust public transportation system is just as important a part of a vibrant community as a healthy police force or good schools. It’s a community resource," said the CTA's Wagner.

Added BART's Johnson, "It's more important than ever for voters to consider the proposition we expect to be on this November's ballot. This initiative will help to put an end to the budget chicanery that has resulted in nearly $3.5 billion of transit funding
 diverted in just the last three years."

The advocates, however, have not taken a position on the initiative. "There is a major concern about the impact locking down these funds would have on health and services," said TransForm's Cohen. "Our groups are doing our due diligence to figure out all the impacts before we take a position."

Added Cohen, "The best solution is using the success of transportation initiatives at the ballot box to grow the pie and find climate impact fees that dedicate the revenues for public transit. Ideally we’d be growing the pie, not just guaranteeing a slice of it for transportation."