Calif. Supreme Court: Shifting transit funds illegal

Posted on October 2, 2009

On Wednesday, the State Supreme Court of California rejected the Schwarzenegger Administration’s appeal of a lower court ruling that annual raids on transit funding are illegal.


By declining to accept the petition for review filed by state officials, the high court upheld the ruling of the Third District Court of Appeal that recent funding diversions violated a series of statutory and constitutional amendments enacted by voters via four statewide initiatives dating back to 1990.


“By denying the state’s appeal, the Supreme Court has affirmed once and for all what we always maintained was true: that it’s illegal to shift dedicated state transit funds away from transit agencies and their riders,” said Joshua Shaw, executive director of the California Transit Association and lead plaintiff in the case. “This decision validates our position that this practice has been illegal since even before 2007, and that the definition of mass transportation adopted by

lawmakers since then to mask these diversions is illegal.”


Public transit officials now hope to work with the Administration and Legislature to restore those funds taken since the Association filed the initial lawsuit in October, 2007, on the heels of the 2007-08 state budget package that raided $1.19 billion from the Public Transportation Account (PTA). Since that agreement, more than $3 billion in transit funding has been re-routed to fill

holes in the General Fund.


Another key component of the appellate court’s decision was its definition of “mass transportation purposes” specified by the initiatives. The court denied the state’s contention that the definition permitted the transfer of funds for home-to-school bus service, transport of disabled persons to regional centers funded by the Department of Developmental Services, repayment of Proposition 42 loans, payment of Proposition 116 bond debt service, and payment of the General Fund’s obligation to fund bond debt service for non-transit general obligation bonds. These are all programs historically supported only by General Fund revenues; thus, when the budget writers diverted transit dollars to these programs, they hoped to achieve General Fund “savings.”


By skirting the intention of the initiatives, budget crafters diverted more than $5 billion of transit funding this decade – nearly $3.5 billion in the last three budget cycles alone. Transit funding took an additional critical blow when the budget agreement enacted in February of this year eliminated the State Transit Assistance program.


On Thursday, Nathaniel P. Ford Sr., Executive Director/CEO of the San Francisco Municipal Transportation Agency (SFMTA) issued the following statement regarding the California Supreme Court’s decision:


“California has made a strong commitment to be in the forefront of environmental leadership, and properly funding public transportation is crucial to building a sustainable future. The state Supreme Court’s decision should help transit agencies like the SFMTA better serve existing customers and make our services more attractive to Californians who are looking for ways to make healthier, more environmentally-friendly transportation choices.”

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