State budget update: Lawsuit threatens home-to-school transportation

Analysis frrm CSBA’s Governmental Relations Department

The ink is barely dry on the state budget for 2007-08 and the spending plan is already being challenged. As expected, the California Transit Association filed a lawsuit in Sacramento County Superior Court Sept. 6 seeking an injunction to stop a $1.3 billion shift from the Public Transportation Account to the state general fund for other transportation-related programs—including $99 million for the Home-to-School Transportation Program.

The Public Transportation Account is funded, in part, by the sales tax on diesel fuel and gasoline, and it has a large balance because of high gas prices. Gov. Arnold Schwarzenegger’s administration believes that the shift is legal because it is being used for other transportation-related programs.

The shift has evolved since January, when the governor first proposed using money from the Public Transportation Account to offset general fund spending for other transportation projects. The original proposal included shifting funding for the Home-to-School Transportation Program entirely to the Public Transportation Account and rebenching Proposition 98 down by $627 million.

However, CSBA and the Education Coalition opposed this manipulation of Proposition 98. The governor’s May Revision scaled back the proposal, maintaining funding for home-to-school transportation within Proposition 98 and using Public Transportation Account funds instead to reimburse the state general fund.

The final budget used multiple one-time sources to fund home-to-school transportation, including $99 million from the Public Transportation Account. If the injunction against the use of these funds is granted, this will create a hole for school transportation funding that will need to be addressed.