California LAO: Transit to take biggest state funding hit from driving reduction

By Debra Kahn

09/18/2020 07:42 PM EDT

As if things weren’t bad enough for California transit agencies, they are expected to get hit hardest by cuts in fuel tax revenue and vehicle registration fees during the pandemic, according to a new analysis from the Legislative Analyst’s Office.

Background: The state budget passed in June assumes revenue from the state’s excise and sales taxes on gasoline and diesel and vehicle registration fees will be 10 percent lower than originally projected for fiscal year 2020-21. But overall revenue for transportation spending is projected to be level with 2019-20, as most of the $1.2 billion difference will be made up by annual inflation-tied increases in the fees.

That should leave funding levels largely steady compared to last year for most of the state’s transportation programs, including highway maintenance and replacement and increasing the capacity of local roads.

But because state funding for transit agencies comes primarily from the sales tax on diesel fuel, which has dropped in price and in consumption, the LAO expects transit agencies to see a 39 percent reduction in funding compared to 2019-20 levels. They’re expected to receive $414 million, a $265 million cut from this year.

Upshot: The funding cuts add to the woes faced by transit agencies whose ridership has plummeted during the pandemic.

The California Transit Association is pushing for agencies to receive $3.1 billion in emergency federal funding, out of $32 billion sought by transit agencies nationwide.

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