Streetsblog San Francisco

Photo: Richard Masoner

Rather than comply with the court's ruling, they argued, the Governor was eliminating the voter-established rules that required the state to fund transit operations with the sales tax on gasoline. Nevermind that several of those ballot initiatives passed by more than two-thirds margins and put explicit restrictions on how taxpayer money could or couldn't be used for transportation projects.

Now many of those transit operators are supporting two bills (ABX8 6 and ABX8 9) that would do as the Governor proposed by eliminating the sales tax on gasoline, but would retain the sales tax on diesel. Rather than cry foul, lobbyists for those operators worked with legislators to develop the bills.

California Transit Association (CTA) Communications Director Jeff Wagner said with the legislature and the Governor thwarting the law and the will of the voters for years by raiding the the State Transit Assistance fund (STA), which is fed in part by the sales tax on gasoline (as well as the sales tax on diesel and other sources), and with Supreme Court rulings in the CTA's favor doing little to change the situation, his organization was taking steps to secure some kind of steady state funding for operators.

"Our fundamental position is in opposition to the elimination of the sales tax [on gasoline], but that has long seemed a foregone conclusion," said Wagner. "Given that lay of the land, we've worked with the legislature to get some level of funding for public transit. What this package does give us is the ability for transit to get funding that it isn't currently getting."

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The California State Capitol in Sacramento. Flickr photo: Paraflyer

As volunteers sweep the state gathering the anticipated 1.2 million signatures needed to comfortably qualify the ballot measure, transit agency lobbyists are also campaigning to drum up support from member organizations and advocacy groups concerned with what some have called the Death of Transit.

Proponents of the initiative, formally known as the Local Taxpayer, Public Safety, and Transportation Protection Act of 2010, sought support from TransForm, a transit and smart growth advocacy non-profit that has yet to take a position, at a meeting also attended by representatives of regional transit agencies like Muni, AC Transit, and the Valley Transportation Authority (VTA).

Joshua Shaw, Executive Director of the California Transit Association (CTA) and Amy O'Gorman, Regional Public Affairs Director at the League of California Cities, which represents local elected officials like city councilors, urged TransForm and its member organizations to do everything they can to support the initiative and get the word out, even if they haven't formally taken a position.

"Over the last several years, too many bad decisions have been made in Sacramento, not just in transit, but in local issues in general," said CTA's Shaw. "Just like any other vital local service, transit is a subsidized service and it's up to the state to maintain that function."

According to Shaw and O'Gorman, since 1992, state lawmakers have taken $11.2 billion in locally approved tax measures for the general fund, $5 billion of that coming from transit funding sources in the last ten years alone. Other diversions since 2004 have come from local property taxes and redevelopment agencies - $4 billion, according to O'Gorman, who said infill and smart growth development projects are often funded with this local money.

O'Gorman listed numerous polls that show the public is distrustful of Sacramento even while local tax measures continue to pass with high margins. "As distrust in state government continues to erode, confidence in local government continues to remain high," said O'Gorman. She also said the public doesn't realize that many of the measures they pass have loopholes that state lawmakers continue to abuse.

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Schwarzenegger outlines his budget at a Capitol press conference. Photo: Governor's Press Office

"Once again, the governor offers shell games instead of solutions, and transit riders in California again suffer the consequences," said Joshua Shaw, the Executive Director of the California Transit Association (CTA). "The governor wants to disguise this as some sort of tax relief for families. What about the thousands of families who depend on public transit to get to work or to go out and buy food to put on their tables, the kids who need transit to get to school, or the elderly and disabled persons who rely on transit to access medical services? I guess they don't count."

The budget scheme defies a state Supreme Court ruling that declared the governor's continued raids on public transit funds illegal. Rather than adhere to the ruling, the governor proposes to eliminate the state sales tax on gas and replace it with an excise tax. "Instead of diverting money from the Public Transportation Account (PTA)," the CTA said in a press release, "the proposal would remove the funding stream that is supposed to flow into the PTA in the first place, effectively eliminating state funding for transit."

And according to the governor's budget document, the result is "an overall decrease in taxes on motorists of about five cents per gallon." So, drivers get a break while transit riders get a slap in the face.

"The governor doesn't seem to be able to make the connection between 21st century priorities...and a suitable 21st century approach to funding transportation needs," said Shaw.

Photo: Thomas Hawk

"It continues the trend of legal rulings in our favor," said California Transit Association (CTA) spokesperson Jeff Wagner, though he cautioned that the ruling would not move mountains overnight and the state is still strapped for cash. "For practical purposes, this just serves as a guideline to work out some way the state to restore those funds."

Wagner added that the CTA has developed an internal proposal to go to the Legislature and the Schwarzenegger administration that they hope will guide negotiations. "The end point is impossible to speculate about at this time," he said.

When asked if he believed the state would comply with the ruling, Wagner said they were negotiating in good faith and they expected the state to do the same. "Our understanding from our organization's talks with the Department of Finance, they were very surprised the court ruled in the way it did," he said, explaining that the state's position might have changed dramatically since the Supreme Court's decision against it.

Locally, BART General Manager Dorothy Dugger outlined the CTA's best case scenario in a letter to her Board of Directors [full PDF].

• FY 2009-10 – Good Faith Transit Funding Restoration:
• Allocate 100% of accumulated Spillover funds to a restored STA Program.

• FY 2010-11 – Three Transit Funding Components Restored:

1. Restore PTA base funding (Sales tax on diesel, Prop. 111 sales tax, and Prop. 42 sales tax) to legitimate expenditures, consistent with the lawsuit’s definition of legal public transit expenditures, so there is a predictable and stable STA Program available for transit operations, and some funds are funds.available for state and regional programming priorities, including needed commuter and intercity rail
2. Allocate Spillover funds to both the PTA and to eligible General Fund (GF) relief (within confines of legitimate uses defined in lawsuit), for some period of time. Over time, provide increasingly more Spillover funds back to transit, and increasingly fewer Spillover funds to GF relief. Of the funds allocated to traditional PTA expenditures, ensure some level of STA Program funding.
   
3. Provide a repayment plan, such that the debt owed by the GF from 2007-08 and 2008-09 Spillover diversions is appropriated over some number of years to the PTA, and allocated for legitimate transit expenditures.

Cuts to transit funding could mean longer waits than ever. Photo: Michael Rhodes

At California State Assembly Committee on Transportation meetings this morning and Tuesday, the California Transit Association (CTA) and public transit agency representatives will discuss the challenges that state funding cuts have imposed on transit providers. Today's hearing is at the Los Angeles County Metropolitan Transportation Authority Board Room. The Tuesday hearing takes place in the Sacramento Regional Transit District Board Room.

The CTA especially hopes to alert lawmakers to the reality that future cuts would undermine California's greenhouse gas reduction goals set out in the state's landmark greenhouse gas reduction bills, AB 32 and SB 375 - a disconnect that even some environmentally-conscious lawmakers seem to overlook.

Muni has lost $180 million over three years because of PTA fund raids. Flickr photo: skew-t

"The Supreme Court has affirmed once and for all what we always maintained was true: that it's illegal to shift dedicated state transit funds away from transit agencies and their riders," said Joshua Shaw, Executive Director of the CTA. "This decision validates our position that this practice has been illegal since even before 2007, and that the definition of mass transportation adopted by lawmakers since then to mask these diversions is illegal."

As we've written, the governor has repeatedly raided the Public Transportation Assistance (PTA) fund while in office, to the tune of $1.19 billion in 2007-08 alone, while touting himself as a green governor who's leading the fight against global warming. Had Schwarzenegger not touched the fund, the MTA would have received nearly $180 million over the last three years, BART would have gotten $30 million last year, and AC Transit upwards of $26 million in 2008.

Said MTA Chief Nat Ford: "California has made a strong commitment to be in the forefront of environmental leadership, and properly funding public transportation is crucial to building a sustainable future. The state Supreme Court's decision should help transit agencies like the SFMTA better serve existing customers and make our services more attractive to Californians who are looking for ways to make healthier, more environmentally-friendly transportation choices."

The CTA, in partnership with other transit agencies, said it now hopes to work with the Schwarzenegger administration and the Legislature to restore the funds.

"We're very hopeful that the high court's decision will now enable us to work with lawmakers to restore these funds and help us to meet the ever-increasing demands for transit services in California," said Michael Burns, the general manager of the Santa Clara Valley Transportation Authority.

H.D. Palmer, a spokesperson for the governor's Department of Finance, said he was disappointed with the ruling but that it is the end of the legal road. He said the issue will go back to the lower court to "determine a remedy" and added "there will be no hard and fast ruling." Palmer said it will likely mean "we'll have to figure out how to come up with an additional billion dollars in budget solutions by the end of the year." 

It's unclear how soon transit agencies could see the funds replenished. The CTA's Shaw was quoted in the Mercury News as saying it's possible the repayment could be spread out over several years.

Mock funeral for transit today in Oakland. Photos: Matthew Roth

Transit advocates, transit riders, politicians, and religious figures mourned the continual underfunding of transit operations by staging a mock funeral for public transit above the 12th Street/Oakland BART station today. The event was tied to a national campaign led by Transit Riders for Public Transportation (TRPT), the Transportation Equity Network and Transportation for America to pressure Congress to provide funding for transit operations.

"Operating funds are desperately needed," said Rev. Scott Denman, Rector at St. John's Episcopal of Oakland and President of Genesis, which helped organize the Oakland event with Public Advocates, Urban Habitat, TransForm, CALPIRG, and BOSS. "It's time to understand and remember the grief that is in our communities because of what is happening to transit, the impact that transit cuts are having on our poor, the impact that it's having on our economy, the impact it's having on our environment."

As the recession deepens, public transit operators struggle with declining public funding and revenues, a situation that has led to fare increases (SFMTA, BART, AC Transit and East Contra Costa County buses) and expected increases (VTA, SamTrans, Caltrain) throughout the Bay area. According to press material from Public Advocates, operating deficits this year exceed $350 million regionally.

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Photo: Trinity County California Republican Party

According to the California Transit Association, the governor wasn't finished.  An unexpected budget surplus created a lifeline for transit, and Schwarzenegger was there with the scissors to cut it. The revised budget proposal diverts another $336 million in transit-dedicated "spillover" revenue to instead cover transit bond debt service, which is by law a General Fund obligation.

Flickr photo: pbo31

“The latest budget shell game only reinforced what we have long known to be true, that serious reform of the budget process is long overdue,” said Joshua Shaw, the CTA's Executive Director. “We’re hopeful that the formation of this commission and the work it undertakes can be a vital step in that direction.”

From the press release:

The Association's report calls for the commission to support continuation and strengthening of the transportation funding mechanisms first put into place by the state in 1971 through the Transportation Development Act, to modernize and standardize the existing TDA revenue stream, and to restore stability and predictability to other sources of state transit funding that have been put in place since the TDA was enacted.

The recommendations also urge constitutional protections to strengthen the intent of voters when they passed 1990's Proposition 116, which established the Public Transportation Account as a trust fund whose revenues were dedicated to "transportation planning and mass transportation purposes," and to clarify voters' intent in defining mass transportation purposes as "only those such as state, regional and local bus and rail passenger service open to the general public."

As we've noted many times, this year's elimination of the State Transit Assistance (STA) fund has really hurt public transit agencies up and down the state with fare hikes and service cuts on the table everywhere just as ridership is increasing.

In a recent interview with Streetsblog San Francisco, MTA Executive Director Nat Ford said he's been working with other public transit agencies on restructuring their strategies.

"We have a lot of work ahead of us," said Ford. "The state transit assistance fund was a mandate from the voters to be part of the state budget not for it to be raided and divvied up at a time when the citizens need transit more than they've ever needed it for their transportation needs."