Public transit would take $1-billion hit in proposed state budget

State officials are still announcing details of the proposed state budget to close a $19.9-billion deficit in the current and next year’s budget. Here’s what the L.A. Times is reporting about the budget’s impact on public transportation:

One of the proposed budget’s biggest losers is public transit — and its riders. Through a complex gas tax swap, which would simultaneously eliminate the sales tax on gas and raise the per-gallon excise tax, roughly $1 billion would be siphoned off from bus and rail funds.

The shift would gut Proposition 42, a voter-approved measure that determines how gas tax money is currently split. Mass transit, which now receives 20% of the taxes, would be cut out of the equation. Drivers would pay slightly less at the pump.

UPDATE: In an attempt to explain the above proposed swap, state officials said that consumers would see a five cent reduction in the taxes they pay at the pump.

UPDATE #2: Here’s how the Sacramento Bee explains the budget’s plan for transportation funding:

The state’s current 6 percent sales tax on a gallon of gasoline would be dropped, and replaced by a 10.8-cent increase in per-gallon excise taxes. Administration officials estimate the overall impact would be a 6-cent-per-gallon reduction in gas prices. The seemingly arcane switch would allow the state to legally cut the money it must currently pay to local governments for transportation programs, and to schools. That’s because the sales tax revenues from gasoline are part of voter-approved formulas that determine how much the transportation and schools get from the state.

Categories: Policy & Funding

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  1. […] Gas Tax Follies Posted January 10, 2010 Filed under: transportation | Tags: California, gas tax, transportation | In California, the governor has proposed a bewildering solution to help fix the massive budget shortfall for the state. One of the issues that constantly plagues budgeting in California is that much of the state’s spending is fixed by voter approved initiatives, meaning that officials have very little flexibility to shift money between priorities or adjust overall spending. But, as always, there’s tricks. (from: The Sacramento Bee via The Source) […]