AgdaPkt 2006-03-27 - Laserfiche WebLink

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6-28 Page 1 March 27, 2006 Subject Resolution supporting placement of a proposed constitutional amendment on the November 2006 statewide ballot to ensure 2002 Proposition 42 gasoline tax revenues are used exclusively for their intended state and local transportation purposes, and to reinforce the requirement to reimburse local governments for such funds previously diverted by the state. Recommendation Adopt the resolution supporting placement of the proposed constitutional amendment on the November 2006 statewide ballot. Background In March 2002, California voters overwhelmingly passed Proposition 42, by a two-thirds margin. That proposition dedicated the existing state sales tax on gasoline to fund transportation projects such as congestion relief, road repairs, transit, and safety improvements. On. February 11,2002 the City Council adopted a resolution supporting' Proposition 42. - Proposition 42 included a provision that allowed the legislature and govemorto divert those funds to non-transportation expenses in the event of state fiscal emergencies. That "loophole" in Proposition 42 has been abused repeatedly. Two out of the last three budget years, the $ales tax on gasoline has been diverted to fund non-transportation state expenditures in the State General Fund. In Redwood City's case, the amount of sales tax diverted is approximately $470,000 - funds which would have been used for local transportation-related projects. Overall, nearly $2.5 billion in gas tax revenues has been diverted to non-transportation expenses since 2002. As a result, state and local agencies have had to delay or stop many critical safety improvements, congestion relief projects, road repairs, and other pressing transportation needs. California has the worst roads in the nation, according to a recent report by the Road Information Program. Thirty-percent of the state's overpasses and bridges are structurally deficient or functionally obsolete, and approximately half of California's urban freeways are considered congested. This transportation crisis continues to threaten the state and local economies and the safety and quality of life of every Californian. Proposition 42 funds were intended by the voters to address this crisis.