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8A P'�,tp{��^ q Page 5 �'JI�F�iFE`-+ �r�� t�� + ec es • a+ eaet n • �ss • w ma • i maese • • tareee • mFagap • m eos� • oe To help answer those questions,the League estimates are avai(able at has provided a breakdown of the funds that wifl www.caiiforniaci�n�nee.com, under the "Trans- ifTi,�"iai.i i.tty t`iLUU�'c,'tS- S€3�CI�Ca��7� ��'O�'3. �� fr�m 'r10f:�f{OCl" S°.^.fIQCI. 2002,and Propositinns 1A and 1B from 2005. Proposition 1A Proposition 42 Prop. 1 A was pas.sed in Novemb.er 2Q�6 as a Prop.42 dedicates a por#ion of the sales tax constifutional amendment to protect Prop. 42 or�gasoline to transportation purposes, including revenues from being"borrowed"by the state. the State i'ransportation lmprovement Pmgram Prop. 1 A does rrotpreverrt th��state from borrow- (STIP), public transit,designated-traf�c cc�r►gestiarr itjg-tff�reese€urrds-en##i�efy;ba�i#dass pat restric4io�s relief projects and city s#re�t�and county on when and how often the funds can be bor- roaas. Prap. 42 was suspended for fiscaE years rowed and must be paid back. Speci#icalty, Prop. 2003-04 and 2004-Q5, mear�ing the funds it gener- 1A includes the following: ated did not flow to transportation programs, but were borrowed by the state. • The Governor must declare that the state --fa�es aseyere.fiscal,hardship,and#he Legislature In 2005-06 and 200�-07, Pro�.42 was fulfy must enact a statute authorizing the borrowing by funded.Additianally, Gov. 5chwarzenegger has a two-thirds vote.At the same time,the Legisla- proposed full funding of Prop. 42 in his 2007-OS ture must pass a bill spectfying that they will repay state budget proposal. -tFte Foan withinfierestwithirr three-years. • Th�state-can borrow�tF�e ft�nds-no more � Itis�irr�ortant to note that while the Govemor than fin+ice in 10 years, and must repay a pr'sor loan has proposed to fully fund Prnp.42 in his J�nuary before borrowing a subsequent time,��-Additionaily, budget proposal, cities and counties will not the stafe cannot borrow funds in twa consecutive receive any of these funtls for local streets and years. roads in FY 2007-08. FY 2007-08 is the second of • Any Frop.42 transportation funds that two F'rop.42 "gap"years for locai agencie$- _ _ ..��ce borrowed.by-the.state but not�epaid as.of years where cities and Countie�,are scheduled to �Wx� ,��7r must t�e repa.id.within.a 14 y.ear . receive no funding under the origina(r'rop.42 �riod(no fater than June 30,2016�with a pay- fGnding formul�(found in Reuenue&Tax.ation i-,��f no less than one-tenth �er ysar of the total Code 7104}. � - -amount owed. ��1t1 fff-these funds were repaid in A�gust 2fl06;ttowever,fihis daes-no#-et�ren#!y- This was part of the trade-aff in 20Q2,where apply to cities and counties.} laca!agencies recei�ed funding in FY 2000-01, while transpor�ation programs d�d not:� Las�ye�r praposition 1 B was the frsi"�ap"year, hov,rever, cit��s-�±ve - Prop.42 repayment funds in August 2006 for Prop.1 B was also passed in November 2006 rnonies borrowed by the state in fiscal years 2003- and containsalmosf$20 billion for various trans- 04 and 2004-05. portation projects in Cali#nrnia. Of ihis amount, cit9es and counties will each receive$1 biAion for Looking ahead, in FY 2008-09, cities arrc! local sfreet and road improvement projects, of counties wiil again rECeive Prop.42 fur�ds.i�- -_�}��-��,��g�;s�g�aranfieed a=�irtimum--of approp�iated in the state bu�get(according to the $40fl,OQa. (City by city allocation estirnates are originai Prop.42 funding formula)at higher levels available at www.�aliforniacityfinance.cam, in the than earlier years. Specifically, cities are currently ��Transportation"section, under"Prop. 1 B.") scheduled to receive an estimated$314 million in FY 2008=09{over$9 per capita). City by city Cantinued an Page 6 Visit the League's Officiat Website••www.cacifies.org PRIOR[TY F4CUS - PAGE 5 February 2, 20d7 • Issue#5