The Assembly-Senate Conference Committee on the FY 2007-08 state budget began its deliberations last Friday, June 1. The members of the conference committee include Senators Denise Ducheny (D, San Diego), Mike Machado (D, Linden) and Dennis Hollingsworth ( R, Murrieta) and Assembly Members Mark Leno (D, SF), John Laird (D, Santa Cruz), and Roger Niello ( R, Sacramento). While the Senate fully rejected the Administration's diversion of $1.3 billion from the Public Transportation Account to the General Fund, the Assembly version of the budget would allow up to $469 million to be diverted for two elements of the Governor's proposal:
- $340 million for debt service on general obligation bonds (for transportation)
- $129 million for transportation services related to the developmentally disabled.
Even with these diversions, the Assembly budget should provide sufficient funding for projects that are scheduled to receive an allocation next year in the State Transportation Improvement Program. In addition, both houses would provide $619 million for State Transit Assistance (STA) funding, resulting in approximatey $218 million for the Bay Area — an increase of $145 million relative to the Governor's May Revise proposal. This results from both houses allowing 50 percent of the "spillover" (a fund source that is triggered when gasoline prices are growing at a faster rate than other goods) to go to STA, as required under current law — though often diverted as part of the annual budget process.
One outstanding conference committee item deals with finding a way to avoid annual fights over the spillover, which is projected to be $827 million next year and growing for at least the next few years. Although the spillover is funded by the sales tax on gasoline, it is not protected by Proposition 1A, which the voters enacted in November 2006 to ensure that the sales tax on gasoline is spent on transportation.