California lawmakers met their June 15 deadline Thursday and passed a state budget bill that includes provisions to bail out transit agencies facing a “fiscal cliff” with federal COVID-19 aid running out — and ensures state lawmakers will get their paychecks.
Now the question is whether Gov. Gavin Newsom, whose $306.5 billion proposed total budget unveiled in May didn’t include a transit bailout, will sign on. Lawmakers are optimistic something can be negotiated over the next few weeks before the new fiscal year begins in July.
“I say in the next 12 days transportation will stay there,” said Sen. Dave Cortese, a Democrat representing San Jose.
Newsom’s office had no response Thursday. But on Monday, a day after lawmakers in the Senate and Assembly reached accord over their budget bill, the governor’s office said “we recognize the role transit plays in the state and have welcomed conversations with the Legislature on the subject.”
“Although the state faces a multibillion-dollar budget deficit, the governor’s team is steadily working with the legislature and remains optimistic that a deal can be reached to provide support for transit statewide,” Newsom’s office said in a statement Monday.
The governor’s office added that “accountability will be a critical part of any deal, and local transportation officials must thoroughly assess their operations and take steps to reform and stabilize their programs in the long run while continuing to meet the needs of their ridership in the near-term.”
This year’s budget is a stark reversal from a year ago, when California was enjoying an unprecedented $97.5 billion surplus. By January, the state was facing a projected $22.3 billion deficit, and by May that had ballooned to $31.5 billion, forcing Newsom and fellow Democrats who control the legislature to dial back the spending.
Transit agencies have laid out a host of doomsday cuts they’d have to make if ridership and revenues don’t improve. BART earlier this month said without the state money, the transit agency will have to run trains only once an hour, cut service on weekends and after 9 p.m. on weeknights, reduce service to San Francisco International and Oakland International airports, close stations and even shut down some lines.
BART’s board last week adopted a $5.1 billion two-year budget with a $93 million deficit in 2025 that also calls for raising fares 11% over two years. The agency said late Monday that it is hopeful the funding will help address the $93 million budget deficit, although details of how much money BART might receive and how those funds will be distributed have yet to be determined.
AC Transit has said numerous local bus lines would have to be reduced or discontinued. The San Francisco Municipal Transportation Agency said it would cut back to pandemic-era service levels with frequency reductions starting on bus lines 2, 6 and 21.
Sen. Scott Wiener, a San Francisco Democrat, has led a group of 35 lawmakers and 19 members of the state’s congressional delegation in supporting a transit bailout, arguing the vital public service shouldn’t suffer because of a pandemic beyond the agencies’ control.
The legislative budget deal for transit restores $2 billion in transportation infrastructure funding that was on the chopping block if revenues are as low as Newsom’s budget office expects. That money would be available for transit operations at local transportation authorities’ discretion.
The deal also would allow local transit agencies to prop up their operating budgets over the next three years by diverting $1.1 billion in cap-and-trade funds that are supposed to be used for zero-emission buses to reduce carbon dioxide emissions by 2040.
Wiener’s office said Thursday that although the governor has yet to signal approval, response has been more about small details so they were optimistic something could be worked out that would ease transit agencies immediate woes. Wiener’s office noted that the approved budget bill still would only provide about half the operations money transit agencies need.
Cortese said the budget bill approved Thursday restores the Transit and Intercity Rail Capital Program funding which the governor had reduced by $2 billion. That money will provide for the long-planned BART extension to downtown San Jose, and also will provide money that can help fund transit operations.
Cortese said lawmakers have been in intense negotiations with the governor’s representatives, and he expected those to continue over the next 12 days to reach an agreement. He said the governor has an extensive package of infrastructure funding priorities of his own — water projects, electric power grid improvements, plants for processing lithium, a key rechargeable battery ingredient — that will be a bargaining chip.
While there’s been no agreement on the give and take yet, one thing lawmakers and the governor’s office do agree on is reaching accord before July, Cortese said.
“There’s legislative meetings going on daily on this,” Cortese said. “This transportation money we’re talking about is a pretty doable bargain for exchange because we haven’t signed off on his infrastructure package.”
