As in most states, California originally created gasoline taxes to pay for highways. But the ever-hungry transit lobby effectively stole some of that money by convincing the state legislature to divert some gas taxes and most Diesel taxes to transit.
Of course, no amount of money is ever enough for the passenger rail lobby, so they conceived the idea of the state selling nearly $10 billion of bonds — with no particular source of revenue to repay those bonds — to fund high-speed rail and rail transit improvements in cities on the high-speed rail route. Of course, this was sold to voters as being essentially cost-free — because measures that require a tax increase must get approval from two thirds of voters instead of just half.
Now, of course, California is projecting a budget deficit of something like $42 billion, mainly due to various special interest groups convincing the legislature or voters to fund their “must-have” programs, like high-speed rail, without finding any revenues to pay for those programs.
To balance the budget, Governor Schwartzenegger has essentially proposed to take the money the transit lobby stole from highways and spend it on other things like school buses. His budget would reduce funding for state transit assistance by 75 percent from $1.37 billion in 2009 to $350 million in 2010.
Naturally, the transit lobby is outraged at this “theft” of its funds. Just desserts, as far as the Antiplanner is concerned.
As the state legislative analyst observes, funding for most state transportation programs is “unstable.” That’s what happens when you rely on stealing taxes from other program.