Transportation Funds
Initiative Constitutional Amendment.

THE QUESTION

Should the California Constitution be amended to prohibit motor vehicle fuel sales taxes that are earmarked for transportation purposes from being retained in the state’s General Fund?

THE SITUATION

The state of California collects motor vehicle fuel taxes and motor vehicle fees to support its transportation programs. In fiscal year 2007-08, revenues from these sources are expected to total about $9 billion. Historically, these revenues have amounted to nearly half of the total cost to maintain, operate, and improve the state’s highways, streets and roads, passenger rail, and transit systems.

During times of fiscal crisis, the state has borrowed revenue from fuel sales taxes and used them for non-transportation purposes by retaining those revenues in the General Fund. Propositions 42 and 1A, approved by California voters in 2002 and 2006, respectively, required that fuel sales taxes be used for transportation purposes only, and limited the state’s ability to borrow those revenues. Generally, the state Constitution now allows only short-term borrowing of these dedicated revenues by the General Fund for cash flow purposes, and requires full repayment, with interest, to the state’s transportation fund within specified timeframes.

In addition, under certain conditions the state’s General Fund may borrow, for up to three fiscal years, Article XIX revenues (from excise taxes on motor vehicle fuel, truck weight fees, driver license fees, and vehicle registration fees) that are usually dedicated to transportation purposes.

THE PROPOSAL

Proposition 91 would amend the state Constitution to:

• prohibit gasoline sales tax revenue that is earmarked for the Transportation Investment Fund (TIF) from being retained in the General Fund;
• require full repayment of vehicle fuel taxes which were borrowed by the General Fund in fiscal years 2003-04 and 2004-05 by June 30, 2017, which is a year later than the current repayment deadline; and
• eliminate the state’s authority to loan Article XIX revenues to the General Fund for multiple years, allowing only loans for short-term cash flow purposes within a fiscal year.

FISCAL EFFECT

According to the California Legislative Analyst’s Office, Proposition 91 would increase the stability and predictability of state funding for highways, streets, and roads. However, it may decrease stability of funding for public transit by removing current restrictions on borrowing fuel tax revenues designated for public transit purposes, and by possibly allowing state borrowing of local transportation funds.

WHAT A YES OR NO VOTE MEANS

A YES vote means that the California Constitution will be amended to restrict the state General Fund’s ability to borrow fuel sales tax revenues from transportation funds, and eliminate its ability to borrow specified transportation funds over multiple years.

A NO vote means that the state’s General Fund would still be able to borrow fuel sales tax revenue from transportation funds, and continue to be able to borrow specified transportation funds for up to three years.

SUPPORTERS SAY

Editor’s Note: The original authors of this measure now oppose it and are urging a “No” vote on Proposition 91. (See Opponents Say, below.)

Other supporters of this measure say:

• Proposition 91 will completely close the Proposition 42 loophole that has been exploited by the Legislature and the Governor.
• Closing the loophole will send a firm message that these funds are off limits for anything other than the purposes the voters intended.

OPPONENTS SAY

Editor’s Note: No official argument against Proposition 91 was submitted to the Secretary of State; however, the measure’s original authors now express the following arguments in opposition.

• Since voters passed Proposition 1A in 2006, Proposition 91 is no longer needed.
• Vote NO on Proposition 91, since Proposition 1A already stopped the politicians from taking our gas tax dollars to use for non-transportation purposes.

FOR MORE INFORMATION

PRO  (213) 388-2364, Southern California Transit Advocates, www.yeson91.net

CON  (916) 446-5508, Transportation California, www.transportationca.com

For more information from the League of Women Voters and others, see Smart Voter on Proposition 91.

The League of Women Voters of California is a nonpartisan organization committed to informed and active citizen participation in government. All citizens, men and women, of voting age are welcomed to join. The League has two roles, citizen education and advocacy. Our election services are carried out by the League of Women Voters of California Education Fund (LWVCEF) and exclude all advocacy.