BILL ANALYSIS Ó
AB 227
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Date of Hearing: May 7, 2015
ASSEMBLY COMMITTEE ON BUDGET
Shirley Weber, Chair
AB 227
(Alejo) - As Amended April 15, 2015
SUBJECT: Transportation funding
SUMMARY: Makes several changes to transportation-related
funding streams and loans.
Specifically, this bill:
1) Eliminates the transfer of weight fee revenues for debt
service related to transportation general obligation bonds.
2) Requires all outstanding loans to the General Fund from
certain transportation special funds be repaid by December
31, 2018.
EXISTING LAW: The 2009-10 budget package included a complicated
fuel swap that allowed the State to use taxes on fuels to
achieve about a $1 billion annual General Fund savings by paying
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General Obligation Bond debts with weight fees instead of
General Fund. As part of this swap, the State replaced the
State sales tax on gasoline with an excise tax that contained a
true-up mechanism to mimic the revenue growth of a sales tax
over time.
Prior to the fuel tax swap, cities and counties received 40
percent of the Proposition 42 portion of the sales tax on
gasoline. In May of 2013, DOF estimated that in 2014-15,
Proposition 42 revenues would be $1.57 billion if the state
still charged a sales tax on gasoline. Based on DOF's estimate,
the cities and counties share of Proposition 42 revenues would
be about $628 million in 2014-15, assuming fuel tax law prior to
the swap.
Under the swap, the state expects to collect about $2.5 billion
in swap excise tax revenues in 2014-15. The first $958 million
of these funds backfilling weight fees used to pay GO debt
service, which saves the equivalent amount of General Fund. The
remaining roughly $1.5 billion is then divided by formula, with
44 percent of the funds going to cities and counties. For
2014-15, the swap excise tax revenue that replaced the
Proposition 42 transfer to cities and counties is projected to
be about $680 million, or roughly $50 million more than locals
would have received if the swap had not been enacted.
FISCAL EFFECT: This bill would result in a General Fund cost of
close to $1 billion annually from the shift of weight fees from
debt service payments.
COMMENTS: This bill would cost close to $1 billion to shift
wait fee revenues from their existing use as debt service
payment. As a result, this bill results in an ongoing General
Fund cost of the equivalent amount. The weight fees would
instead be deposited in the State Highway Account.
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This bill also requires the General Fund repay all loans from
certain transportation special funds by December 31, 2018.
According to a report prepared by Department of Finance as of
December 31, 2014, the State has approximately $575 million on
outstanding debts that would have to repaid to the State Highway
Account, the Motor Vehicle Account, the Motor Vehicle Fuel
Account, the Local Airport Loan Account, and the Public Transit
Account. In this report, Department of Finance projects all of
these loans to be repaid on or before 2016-17.
REGISTERED SUPPORT / OPPOSITION:
Support
American Council of Engineering Companies
Association of Governments- Southern California
Blackburn Consulting
California Asphalt Pavement Association
California Association of Councils of Governments
California State Council of Laborers
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California Transit Association
City/County Association of Governments of San Mateo County
Dimensions 4 Engineering Inc
EFS Engineering, Inc.
HMH Engineers
Holdrege and Kull
Kennedy & Associates
Kimley, Horn
Lane Engineers, Inc.
Lee & Pierce Inc.
Leighton Consulting, Inc.
Leptien, Cronin, Cooper, Morris, & Poore, Inc.
Michael Baker International
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Morton & Pitalo, Inc.
Orange County Transportation Authority
Pace Engineering
Pacific Crest Engineering Inc.
RICK Engineering Company
Robert L. Dewitt and Associates, Inc.
SA Associates
Shannon & Wilson, Inc.
Solano Transportation Authority
Stantec Consulting Services Inc.
Transportation Agency for Monterey County
Transpedia Consulting Engineers
Towill, Inc.
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Valley Transportation Authority
Ventura County Transportation Authority
Whitson Engineers
Yeh and Associates, Inc.
Opposition
None on file
Analysis Prepared by:Christian Griffith/ BUDGET /916-319-2099