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Federal Funding Sources
Federal funds are estimated to provide about $23.4 billion to California through 2009. The 2006-07 federal allocation is $3.247 billion. Additional funds have been granted for local assistance, bringing the total amount to approximately $4.6 billion.
§ The federal transportation act was reauthorized through 2008-09 as the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU).
§ Funds are appropriated to California out of the federal Highway Trust Fund, and are allocated according to federal formulas based on the state’s contribution from federal excise taxes on gasoline and diesel fuels in addition to excise and sales taxes on tires, trucks, trailers, and heavy commercial vehicles.
- Federal tax per gallon of gasoline: 18.4 cents
- Federal tax per gallon of diesel fuel: 24.4 cents
§ Under the minimum guarantees, in 2006 California will receive 90.5 percent return on its gas tax contributions to the federal Highway Trust Funds. The state’s minimum guarantee will increase to 91.5 percent in 2007 and 92 percent in 2008. State and local agencies can also apply for discretionary grants in addition to that allocation.
§ Federal funds constitute about 23.4% of the state’s annual transportation funding.
§ The federal transportation program typically is a six-year program; California’s share of funding has grown by approximately 40 percent in each of its last two renewals:
- Under ISTEA, the Intermodal Surface Transportation Efficiency Act of 1991, California received approximately $10 billion in federal highway transportation funds and approximately $3.1 billion in transit assistance.
- TEA-21, the Transportation Equity Act for the 21st Century enacted in 1998, provided California with approximately $14.4 billion in federal highway funds and $3.8 billion in federal transit funds.
[Sources for this section: LAO, Public Policy Institute, Caltrans]
Local Funding Sources
Local funds are the largest single source for transportation funding in California. They account for nearly half of all revenues for transportation capital projects and operations in California.
Local option transportation sales taxes
§ Optional local sales taxes typically are one-quarter to one-half percent on all taxable goods and services sold in individual counties that have passed dedicated sales tax measures for transportation purposes.
§ Revenues from these taxes are estimated to total $2.874 billion a year.
§ Counties began asking voters to approve these local measures in the mid-1980s. Passage at that time required only a simple majority. Subsequent state initiatives and court decisions now require two-thirds approval for passage of these measures.
§ 19 California counties representing more than 85% of the state’s population currently have local option sales tax measures in effect.
§ Since 2000, 15 counties have approved local transportation sales taxes – new measures or renewals of measures that were expiring. In that same time, 15 measures have failed to garner two-thirds of the local vote.
[Sources for this section: LAO, Self-Help Counties Coalition]
State sales tax on gasoline
§ In addition to dedicated, local transportation sales taxes (on all taxable goods), under Proposition 42, some of the state’s 5% portion of the (statewide average) 7.9% sales tax on gasoline goes to cities, counties, and transit districts for local improvement projects. The state allocated $136 million to cities and $136 million to counties in fiscal year 2005-06, and has budgeted $223 million for cities and $223 million for counties in 2006-07. [Governor’s Budget]
Other sources: Other local funds come from local general funds, local bond proceeds, developer fees, fines and forfeitures, and other road taxes.
Part 2: Money is allocated to the transportation programs through a variety of special funds, each with its own purposes and restructions including overlapping and comingled funding. Continue reading here.
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