July, 2008

Borrowing Gas Tax Funds:
California Faces $15 Billion Budget Deficit

from Kevin Pedrotti, Legislative Advocate for the Golden State Builders Exchanges

California faces a $15 billion budget deficit and state legislative leaders have proposed closing the gap with a $9.7 billion tax hike on business and "the rich."

In addition, we have heard credible rumors from key legislative staff that a Big 4 budget deal may be coming together fairly soon that includes, among other things, taking Prop. 42 funds to close the budget gap.  We believe that this could easily turn into a real and credible threat and want to act immediately to head off a Prop. 42 raid. 

We recommend you contact your local legislator and ask them to tell their leadership that they are opposed to raiding transportation funds to balance the budget.

Here are some Talking Points:

■  Borrowing gas tax funds that must be repaid in three years is no way to fix a structural deficit.  It only papers over the problem, plunges the state further into debt and increases costs to the state. 

■  Raiding transportation and transit funding breaks faith with 77% of voters who passed Prop. 1A in 2006. With Prop. 42 in 2002 and again with Prop. 1A in 2006, California voters have made it abundantly clear that they do not want the state raiding funds intended for transportation and transit improvements.

■  Cutting transportation and transit funding now will mean the death of many high priority projects. The longer we wait on these transportation projects, the more costly they become. 

■  Raiding transportation and transit funds will eliminate thousands of jobs and stall economic growth at the worst possible time.  Raiding transportation funds will further destroy an already struggling industry and severely hamper any hope of an economic recovery.

Again, we fully appreciate the difficulty of addressing this difficult budget. But we believe raiding transportation funds is no solution at all.

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