CalACT | California Association for Coordinated Transportation
Representing Small, Rural, & Specialized Transportation Providers Statewide
Legislative Alert!
Governor's Budget Proposes to Eliminate Gas Tax that Supports Transit
Governor Schwarzenegger’s 2010-11 Budget proposes to Eliminate the Sales Tax on Fuel, which will result in the loss of approximately $1.2 billion in Public Transportation Account funds and $1.4 billion in Prop 42 revenue. This proposal removes only the state’s share of the sales tax; local sales taxes would still apply. Repealing the sales tax on fuel abolishes the funding source for all public transit funding, as well as eliminating the ability to fund transit capital projects in the STIP. This proposal also circumvents the Constitutional protections enacted by Prop 42 to ensure a reliable flow of transportation funds.
To backfill the lost Prop 42 funds for the STIP and local streets and roads allocation, the Governor proposes to increase the per gallon excise tax by 10.8 cents, for a total state excise tax of 28.8 cents per gallon. Excise tax revenue may only be used for project consistent with Article 19 of the Constitution. This restricts the use of these funds for highway projects and exclusive public mass transit guide ways. Excise tax revenue cannot be used for the maintenance and operating costs of public transit passenger facilities, vehicles, equipment, and service.
The Governor intends to include this proposal in the Special Session that he called last week. The Legislature has the next 45 days to consider this and other budget proposals. If approved, the repeal of the sales tax on fuel would be effective July 1, 2009. Therefore, we are urging you to CALL YOUR LEGISLATORS TODAY TO VOTE AGAINST THE ELIMINATION OF THE SALES TAX!
Read more about the Governor's proposed budget a CapitolWeekly.net (.pdf)
