2010-11 Fiscal Year Highlights

The 2010-11 Budget Act authorized $12.5 billion in expenditures and 20,955 personnel years (PY). This was a decrease of $467 million in expenditures and 618 PYs when compared to the enacted 2009-10 Budget.

Of the $12.5 billion authorized in expenditures, approximately $2.2 billion represented Proposition 1A and 1B appropriations. Proposition 1A, passed in 2008, provided funding for both high-speed and intercity rail service. Proposition 1B is the $19.9 billion transportation bond approved by voters in 2006. Also included was a decrease of $77.4 million and 642 personnel year equivalents to the Department’s Capital Outlay Support program for the delivery of capital outlay projects, and a reduction of $7.4 million and 63.7 PYs to the Planning program to remove funding for the development of project initiation documents.

Although the Department experienced significant cuts to the Capital Outlay and Planning programs, there were increases of up to $57.3 million in the Equipment program, $50 million in the Maintenance program, and $100.2 million in the Rail program from the Recovery ActPlease click the link to learn more about how Caltrans has used transportation funds to improve mobility throughout California in the sidebar story. Passed in 2009, the Recovery Act provided $2.6 billion for transportation in the state.

Proposition 22
Passed by the voters in November 2010, Proposition 22 prohibits borrowing, lending or diverting revenues that are dedicated to funding transportation improvement projects and services. Based on its current implementation, Proposition 22 has affected transportation funding as follows:

• Prohibits loans from excise and sales taxes on fuel, but the proposed language eliminates protections for weight fee revenues.
• Protects local transit funding by redirecting 50 percent of the state portion of sales tax on fuels deposited in the Public Transportation Account (PTA) to State Transit Assistance (STA).
• Eliminates any transfers from the PTA to any other fund in the State Treasury.

Weight Fee Swap
The 2011-12 Governor’s Budget brought forward the Weight Fee Swap proposal from the December special session. Weight fees were previously protected by Article XIX of the State Constitution, but lost their protection with the passage of Proposition 22 in November 2010. In March 2011, Assembly Bill 105 authorized transfers of weight fee revenues from the State Highway Account (SHA) to the General Fund (GF) for transportation debt service and loans. This provides most of the GF relief originally planned in the fuel tax swap and preserves GF resources for vital statewide programs. In return, excise tax which would have gone to the GF prior to Proposition 22, will now be transferred to the SHA to fund transportation.

The Governor’s Budget included $1.5 billion in loans and debt service payments which affected the SHA in fiscal year 2010. This included $227 million in GF loans from the SHA, $544 million in debt service from the Motor Vehicle Fuel Account (MVFA), and $736 million in GF loans from the MVFA.

Re-enactment of Fuel Tax Swap
The 2011-12 Governor’s Budget proposed the re-enactment of the fuel tax swap. In March 2011, AB 105, which re-enacted the fuel tax swap, was passed. Re-enactment provided additional funding for the maintenance, rehabilitation and preservation of the State Highway System (SHS). This bill also required all additional increases to the state portion of sales tax on diesel fuel (i.e. 1.87 percent in 2011-12) to be redirected from the PTA to STA. Combined with other existing statutes, STA receives almost 75 percent of the sales tax on diesel revenues, with the PTA retaining the remaining 25 percent. Conversely, funding for mass transportation and rail projects could decrease and current projects may need to be delayed due to a loss of funding specific to these programs.

Federal Funds Management
In Federal fiscal year 2010-11, Caltrans successfully:

• Obligated $3.3 billion from the Federal Highway Trust Fund.
• Requested $491 million to obligate against additional available projects through the August redistribution process.
• Used $208 million in toll credits in lieu of state matching funds, which offered some relief to the already stressed SHA.

Proposition 1B
During state fiscal year 2010-11, a total of $575 million was allocated to fund Proposition 1B bond projects. The December 2010 bond sale yielded $1.29 billion of bond funding for Proposition 1B transportation projects, and $101 million for Positive Train Control projects under the Proposition 1A high-speed rail bond.

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