Following a three-month impasse, which culminated in an all-night compromise session and a vote at dawn Thursday, the California Legislature passed a budget package that addresses the state's massive deficit with billions of dollars in new taxes and program cuts, including to transit.

The State Transit Assistance program, the only ongoing source of state funding for day-to-day transit operations, was slashed for the remainder of this year and completely eliminated from the 2009-2010 budget. Statewide, this could mean a total of $536 million hit to public transportation, according to the Orange County (Calif.) Transportation Authority (OCTA), which adds that this action will result in a loss of more than $21 million for the agency through the fiscal year ending June 30.

“Not only is this is a significant short-term loss for OCTA but it demonstrates an utter lack of commitment to public transportation at a time when ridership throughout the state has been on the rise,” said OCTA Chairman Peter Buffa. “Balancing the budget for the next two years presents a daunting challenge for the board of directors.”

Plummeting state sales tax revenue also will result in a $19 million loss for OCTA, all while the agency is facing a more than $40 million shortfall in this year’s $263 million budget.

For their part, OCTA has been bracing for this hit during the months of ongoing state budget negotiations by adding a fare increase of approximately 25 percent in January, making minor cuts to bus services, and implementing a hiring freeze and cutting capital expenses. 

Moving forward, the board is expected to eliminate raises and bonuses for administrative employees beginning July 1. Additional service reductions are anticipated and further cost-cutting measures will be necessary.

OCTA operates 80 bus routes and handled nearly 69 million boardings in 2008.