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Home My WebLink AboutMINUTES - 08052008 - C.45 rt'O: BOARD OF SUPERVISORS FROM: JULIA BUEREN, PUBLIC WORKS DIRECTOR; AND '.; Contra DENNIS M. BARRY, AICPs Costa INTERIM DIRECTOR OF CONSERVATION & DEVELOPMENTS :� a County S'`q�ociz�' DATE: AUGUST 5, 2008 SUBJECT: REPORT ON STATE BUDGET CORRESPONDENCE Ole SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS ACCEPT report on recent state budget correspondence from the Chair, as recommended by the Public Works Director and Interim Director of Conservation & Development. FISCAL IMPACT NONE from the recommended action. The County's road maintenance program would suffer if the state diverts gasoline sales tax revenue to cover the budget shortfall as has been done in recent years. BACKGROUND/REASONS FOR RECOMMENDATIONS The California State Association of Counties (CSAC) and our legislative advocate in Sacramento have alerted the County to the possibility that state sales tax revenue from gasoline sales may again be diverted away from transportation uses to help cover the state's budget shortfall. This happened in recent budget years as the legislature struggled to deal with the shortfall. The voters in 2002 passed Proposition 42, which required that revenue from the state sales tax on gasoline be used specifically for transportation purposes. The measure allowed the state to divert the funds to other uses in specific "fiscal emergency" circumstances. After these funds were diverted to cover budget shortfalls in subsequent years, the voters passed Proposition 1A in 2006 which placed limits on the frequency with which such diversions could occur and required that diverted funds must be repaid to the state's transportation fund within three years before another diversion can occur. CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMEND_--- - OF BOARD COMMITTEE APPROVE OTHER SIGNATURE (S): ACTION OF BOARD ON f AmP APPROVED AS RECOMMEN D ._g-OT44tR VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND X UNANIMOUS (ABSENT 12e>r ) CORRECT COPY OF AN ACTION TAKEN AND AYES: NOES: ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. Contact: John Greitzer / (925/335-1201) ATTESTED cc: Department of Conservation & Development JOHN CULLEN, CLERK OF Public Works Department T BOARD OF SUPERVISORS L. Delaney, County Administrator's Office D CO NTY ADMINISTRATOR K. Buss, CSAC M. Watts, California Strategies BY UTY G:\Transportation\Greitzer\Board Order\2008\aug 5 prop 42.doc 67 ,STATE BUDGET CORRESPONDENCE AUGUST 5, 2008 Page 2 BACKGROUND/REASONS FOR RECOMMENDATIONS (Continued) Legislative leaders publicly have said they are not considering another diversion of gasoline sales tax revenue. However, there is indication from CSAC and legislative sources that diversion is indeed being considered in some legislative discussions. Given this information, and given the urgency of the situation, CSAC asked its member counties to send letters to the Governor and legislative delegation opposing another diversion of gasoline sales tax funds away from transportation. As you know, protection of current transportation revenue programs was included in the Board's legislative goals for 2008. The Transportation Water and Infrastructure Committee has been monitoring this issue but was unable to meet subsequent to CSAC's call to action. Due to uncertainty over the legislature's timeline in enacting a budget, staff contacted the Chair of the Board and requested his signature on the letter shown in Exhibit A. The letter opposes the diversion of sales tax funds from gasoline sales and is consistent with the Board's past position on this issue. Should the diversion occur, it would have a significant negative impact on the County's ability to maintain its roads. There also likely would be some impact on major transportation infrastructure projects that are funded in part from the sales tax revenue, particularly the Caldecott Tunnel Fourth Bore Project and the ongoing expansion of State Route 4 in East County. Exhibit B is material received from CSAC on this subject. Although the CSAC material erroneously refers to the "gas tax" in some instances, it is the state sales tax on gasoline that is at issue. The "gas tax" (formally known as the Fuel Excise Tax) is a different tax and has not been the subject of diversion from transportation uses. Staff will keep the Board informed on any potential diversion of funds, through reports to the Transportation, Water and Infrastructure Committee. If diversion appears likely and there is a tight deadline for state budget action that does not permit waiting until the next Committee meeting, staff may bring the issue directly to the Board after consulting with the Chair of the Transportation, Water and Infrastructure Committee. EXHIBIT A The Board of Supervisors C-ontra John Cullen County Administration Building Costa Clerk of the Board 651 Pine Street, Room 106 and Martinez, California 94553 Cou rpt County Administrator Y (925)335-1900 John Gioia, 1s'District o, Gayle B. Uilkema,2otl District f Mary N. Piepho,3rd District 1' Susan A. Bonilla,4`h District Federal D.Glover,51"District August 5, 2008 The Honorable Governor Arnold Schwarzenegger State Capitol Building Sacramento, CA 95814 RE: FY 2008-09 STATE BUDGET—Prop. 42 Transportation Funds Dear Governor Schwarzenegger: As the Chair of the Contra Costa County Board of Supervisors, I urge you to reject any proposals that would suspend Proposition 42, the state sales tax on gasoline, to fill the State's budget void. Apparently, recent budget discussions have included borrowing these funds which are critical to many transportation and transit projects throughout California. We understand the difficulty of negotiating the budget this year. However, borrowing Prop. 42 funds is fiscally irresponsible, an affront to the voters of California, and will cause irreparable harm to our transportation systems. The funds from the state sales tax on gasoline must be repaid in three years with interest. Borrowing these funds will do nothing to fix the structural deficit. It will only provide temporary relief and put the State further into debt. Moreover, seventy-seven percent of voters passed Prop. 1A just two years ago, a clear message that voters do not want the State using transportation funds for other purposes. California has a significant backlog of transportation improvement projects. If Proposition 42 is suspended, many critical projects will be delayed including the 4th bore of the Caldecott Tunnel and expansion of Highway 4 in east Contra Costa County. The borrowing will also impact funding for transit and for local streets and roads. In the 9 Bay Area Counties, the total 25-year local streets and roads shortfall is $17 billion. Suspending Proposition 42 will add to the problem. Again, we fully appreciate the difficulty of addressing this difficult budget. But at a time when our economy and the construction sector is faltering, deferring transportation funds will further destroy this already struggling industry, eliminate thousands of jobs and hamper our economic recovery. Cordially, Federal D. Glover, Chair Contra Costa County Board of Supervisors FDG\JG G:\Transportation\Greitzer\Board Order\2008\aug 5 prop 42 exhibit A.doc cc: Assembly Member Loni Hancock Assembly Member Mark DeSaulnier Assembly Member Guy Houston Senator Tom Torlakson Senator Don Perata Contra Costa County Board of Supervisors Cathy Christian, Nielsen Merksamer