Governor Schwarzenegger, satisfied with actions by the Legislature, signed ABX8 6 and ABX8 9, the two-bill package that will bring significant change to how transportation is funded.  Proposition 42 is no more.  The repeal of the sales tax on gas, and thus Proposition 42, will be replaced by an equivalent amount of increase in the per gallon gas tax. 

Just before the end of the deadline for action on the two-bill package,  the Legislature responded to the Governor’s request to address two issues.  One was to fix a technical problem related to railroads and other diesel users to ensure they would not end up paying more due to the changes in gallon versus sales tax rates on diesel.  The second was to provide tax reductions as part of the Governor’s job package, which included a $200 million homebuyers’ tax credit and tax exemption on the purchase of clean technology to spur investment in manufacturing solar, renewable energy, fuel cells and zero emission vehicles

CSAC supported the Legislature’s alternative tax swap, which will partially restore transit funding, hold harmless local streets and roads funding,  increase funding for the state highway system, and provide about $1 billion in State General Fund relief into the future. 

It has been suggested that this change in law will execute a divorce of transportation funding from the State’s General Fund and the State’s continued budget battles.  We can only hope that this is the case if we are to provide a well-planned and efficient transportation system for the traveling public and business in California.  Many remain anxious about this claim since the one negative that remains with this swap is that significant State Constitutional protections over transportation funding were lost.