By Jaeson D. White
Copyright © 2002 by University of the McGeorge School of Law
JD, McGeorge School of Law, University of the Pacific
to be conferred May 2003
B.A., Public Administration, California State University Chico, 1992
I. Executive Summary
II. The Law
III. Changes Proposed by Proposition 51
IV. Drafting Issues
V. Constitutional Analysis
VI. Public Policy Consideration
VII. Conclusion
I. Executive Summary
California's transportation infrastructure has failed to keep up with the growth of the state. More and more Californians are finding themselves stuck on congested freeways because the state's highway system is inadequate, and public transportation does not always provide a viable option. Californians pay a variety of transportation related fees and taxes, but little of this revenue is specifically designated for transportation purposes. The majority of the revenue is spent on non-transportation programs at the discretion of the Legislature.
Proposition 51, the Traffic Congestion Relief and Safe School Bus Act, proposes to allocate thirty (30) percent of the state's share of the sales tax on motor vehicles for transportation purposes. Based current budget figures, Proposition 51 would divert approximately $870 million per year from the state's General Fund to the specified transportation programs. Implementation of Proposition 51 could cause public policy concerns regarding the allocation of revenue to specified transportation programs and projects.
California's traffic congestion crisis has been caused by a failure of the state's infrastructure to keep up with the population growth. Surface Transportation Policy Project: Highway Supply vs. Traffic Demand http://www.transact.org/Ca/congestion3.html (last accessed June 12, 2002). From 1984 to 1997, California's population has grown by twenty-eight percent. Id. However, California's federal interstates grew in lane miles by five percent, other highways grew by twenty-six percent, and principal arterial streets increased by thirteen percent. Id.
California uses a variety of funding mechanisms to provide revenue for transportation related projects. Revenue for transportation programs are generated from state fuel taxes (gas taxes), truck weight fees, general sales taxes, bridge tolls, and federal funds. These revenues are placed in various funds, and allocated to transportation projects based upon an assortment of statutory requirements.
Article XIX of the California Constitution governs the use of motor vehicle sales taxes. Revenue collected from fees and taxes imposed upon vehicles or their use shall be used for administration and enforcement of traffic and vehicle laws. Cal. Const. Art. XIX § 2(a). Money can also be use to mitigate the environmental effects of motor vehicles, and for the research, planning, construction, improvement, maintenance, and operation of public roadways. Id.
Currently, general sales taxes collected on new and used motor vehicle sales and leases are deposited in the state's General Fund. It is estimated that approximately $2.5 - $3 billion is generated from these taxes. Committee Analysis of AB 321, Assembly Committee on Transportation (April 16, 2001). The General Fund is used at the discretion of the Legislature to fund the various functions of the state government.
The State Transportation Improvement Program (hereinafter STIP) establishes a procedure that the California Transportation Commission follows to allocate transportation funding to the Department of Transportation and local transportation planning agencies. Under the STIP, local and regional transportation planning agencies develop proposed projects to be funded by the STIP. Cal. Govt. Code §§ 14526 and 14527 (West Supp. 2002). These projects are then presented to the California Transportation Commission through the Department of Transportation to be adopted and funded by the STIP, or rejected. Cal. Govt. Code § 14529.
The Traffic Congestion Relief Program (hereinafter TCRP) was created by 2000 Stat. Ch. 91 (AB 2928). The TCRP appropriated $1.5 billion from the General Fund and $500 million from gasoline sales tax revenues to fund 141 transportation projects chosen by Governor Davis. Floor Analysis of AB 2928, Assembly Committee on Rules (June 16, 2000).
The only transportation program that the TCRP interrelates with is the Transportation Investment Fund. The interaction between these two programs is limited to a shift in revenues from the Transportation Investment Fund to the TCRP. Id. The purpose of the transfer of revenues is to keep the TRCP continuously funded.
The Transportation Investment Fund (hereinafter TIF) uses gasoline sales tax revenues to fund transportation projects. The TIF was created by a five-year (July 1, 2001 to June 30, 2006) transfer of the state's share of gasoline sales tax revenues from the General Fund to the TIF. Floor Analysis of AB 2928, Assembly Committee on Rules (June 16, 2000). Revenue in the TIF is appropriated quarterly and used to fund the transportation projects in the TCRP. Id. After the TCRP projects are funded, any remaining funds in the TIF are distributed as follows: forty (40) percent to the Department of Transportation for STIP projects; forty (40) percent to cities and counties for local roadways; and twenty (20) percent to the Public Transportation Account for transit and rail purposes. Id.
The shift in the state's share of gasoline sales tax revenues from the General Fund to the TIF was made permanent by a constitutional amendment in March 2002. This permanency was the result of the voters approving Proposition 42, which created Article XIXB in the California Constitution.
The Legislature created the Safe Routes to School Program with 1999 Stat. Ch. 663 (AB 1475). The Safe Routes to School Program is codified in Section 2333.5 of the Streets and Highways Code. This section requires the Department of Transportation to make grants available to local governments for construction of bicycle and pedestrian and traffic calming projects. Chapter 663 established the Safe Routes to School Program for a period of three years. However, the Safe Routes to School Program was extended by an additional three years to 2005 by 2001 Stat. Ch. 600 (SB 10).
The revenue for the Safe Routes to School Program comes from the federal government. California receives approximately $60 million from the federal Hazard Elimination/Safety Program (hereinafter HES). Committee Analysis of AB 1475, Floor Analysis (September 9, 1999). The Safe Routes to School Program allocates one-third (approximately $30 million annually) of the states HES funds to traffic related projects designed to improve safety around school areas. Id.
The Bicycle Transportation Account currently receives $600,000 monthly from motor fuel license taxes. This account is used to fund bicycle transportation projects. Beginning on July 1, 2006, the amount of revenue deposited in this account will be statutorily reduced to approximately $416,000 monthly. Cal. Sts. & High. Code § 2106 (West Supp. 2002).
III. Changes Proposed by Proposition 51
The Traffic Congestion Relief and Safe School Bus Act was originally introduced in the Legislature as AB 321 (Vargas). However, AB 321 was never heard by the Legislature, and the author eventually amended the bill to deal with an unrelated topic. Legislative History of AB 321, http://www.leginfo.ca.gov/bilinfo.html (last accessed on June 14, 2002). The only difference between Proposition 51 and AB 321 is that Proposition 51 would transfer only thirty (30) percent of the state's share of the sales tax on new and used motor vehicle sales and leases to the Traffic Congestion Relief and Safe School Bus Fund, instead of one-hundred (100) percent as proposed by AB 321. Planning and Conservation League: General Fund Aspects of the Traffic Congestion Relief and Safe School Bus Act, http://www.pcl.org/transportation/general%fund.html (accessed on May 22, 2002).
If passed by the voters, the Traffic Congestion Relief and Safe School Bus Act would allocate thirty (30) percent of the state's share of the sales tax on new and used motor vehicles sales and leases to the newly created Traffic Congestion and Safe School Bus Trust Fund. This revenue would be divided among a multitude of transportation related projects. Proposition 51 would also change provisions of current law relating to transportation issues. California Secretary of State, California Official Voter Information Guide, Analysis of Prop. 51, Transportation. Distribution of Existing Motor Vehicle Sales and Use Tax. Analysis by the Legislative Analyst http://voterguide.ss.ca.gov/propositions2.asp?id=323&sID=2 (accessed on October 17, 2002)
Proposition 51 would add the Traffic Congestion Relief and Safe School Bus Trust Fund (hereinafter "Fund") to the State Treasury. The Fund would be established by permanently allocating thirty (30) percent of all state sales taxes collected from the sale or lease of new and used motor vehicles. Id. The Fund would be divided into the following programs:
The Congestion Bottleneck Account would be established using sixteen (16) percent of the Fund. Proposition 51 requires specified amounts to be allocated to fourteen (14) projects designed to reduce traffic congestion. The remainder would be placed in the TCRF to be distributed by the California Transportation Commission in a manner consistent with the Traffic Congestion Relief Program. California Secretary of State, California Official Voter Information Guide, Analysis of Prop. 51, Transportation. Distribution of Existing Motor Vehicle Sales and Use Tax. Text of Proposed Law, Section 2 (b)(1).
http://voterguide.ss.ca.gov/propositions2.asp?id=323&sID=4 (accessed on October 17, 2002)
The Transit Capital Account would be used for projects to construct or improve light and commuter rail lines and facilities. This account would be established by seventeen (17) percent of the Fund. Proposition 51 would require seven (7) projects be funded first, and the remainder to be allocated to the California Transportation Commission. The California Transportation Commission would distribute the remainder under the STIP. Id. at Section 2(b)(3).
Three (3) percent of the Fund would be used to establish the Transit Oriented Development Account. This account would be distributed by the existing Business, Transportation and Housing Agency to regional transportation planning agencies for developing public use facilities associated with rail and bus stations. Id. at Section 2(b)(13).
The Transit Service Expansion and Enhancements Account would be created using sixteen (16) percent of the Fund. The State Controller, as prescribed, would allocate this account directly to transit operators. Transit operators could use these funds for bus, light rail, and commuter rail operations, transit equipment and facility improvement, maintenance, rehabilitation, and passenger security. Id. at Section 2(b)(2).
The Senior and Disabled Transportation Account would be allocated two (2) percent of the Fund. This account would be distributed by the State Controller to transportation planning agencies to provide transportation for seniors and people with disabilities. Id. at Section 2(b)(4).
Four (4) percent of the Fund would be used to establish the Rail Grade Separations Account. Proposition 51 specifies two (2) projects to be funded, and the remainder to be distributed by the California Transportation Commission based upon a priority list established by the Public Utilities Commission. The revenues in this account would be used to improve roadways where they intersect with railroads to improve the traffic flow at grade separations. The California Transportation Commission would rely on the priority list from the Public Utilities Commission because the Public Utilities Commission is responsible for overseeing railroad operations in California. Id. at Section 2(b)(5).
Proposition 51 would establish three (3) accounts to improve bicycle/pedestrian infrastructure and safety. The Bicycle Efficiency Account would allocate two (2) percent of the Fund to the Department of Transportation for bicycle projects. One (1) percent of the Fund would be used for the Pedestrian Account. This account would be allocated to the Department of Transportation for pedestrian safety projects. The Bicycle and Pedestrian Safety Law Enforcement Account would be allocated one (1) percent of the Fund. Two-thirds of this account would be distributed to the Office of Criminal Justice and Planning for grants to local and state law enforcement agencies. The remaining third of the account would be allocated to the State Department of Education for grants to local school districts. Id. at Section 2(b)(9).
The Safe and Clean School Bus Account would be funded with eight (8) percent of the Fund. This revenue would be distributed by the State Department of Education as grants to local school districts for purchasing or leasing new school buses. The first priority of this account would be to replace more than 1,000 school buses that do not meet the 1977 federal school bus safety standards. After accomplishing the first priority, the funds would be used to replace school buses that fail to meet 1986 school bus pollution control standards. The Act does not appear to place any particular requirements on the type of school bus that has to be purchased other than it must meet federal safety and pollution standards. Id. at Section 2(b)(15).
Two (2) percent of the Fund would be used to establish the Rural Transportation Account. This account would be distributed by the State Controller directly to transit operators in counties with a population of less than two hundred and fifty thousand (250,000). Id. at Section 2(b)(12).
The Traffic Safety Improvement Account would use five (5) percent of the Fund. This account would be allocated by the California Transportation Commission to the Department of Transportation for projects that reduce traffic related fatalities and injuries. Id. at Section 2(b)(16).
The Passenger Rail Improvement, Safety, and Modernization Account would use four (4) percent of the Fund. This account would be allocated to the State Controller to distribute. The funds would be used to rehabilitate or modernize tracks utilized for public passenger rail transit, signals, structures, facilities, and rolling stock. Id. at Section 2(b)(17).
Four (4) percent of the Fund would be used to establish the Intercity and Commuter Rail Capital and Operations Account. This account would be allocated to the California Transportation Commission to be distributed to public agencies operating commuter rail services. The funds could be used to construct new rail lines or improve existing rail lines. A public agency could also use the funds to maintain or improve rail station facilities to increase accessibility for motor vehicles, pedestrians, and bicyclists. Id.
The Transportation Water Quality Account would be allocated two (2) percent of the Fund. This account would be distributed to the State Water Resources Control Board. These funds would be used to mitigate the effect of transportation systems have on water quality. It could be used to fund the acquisition, clean-up and protection of wetlands to protect those damaged by water runoff from roadways. Id. at Section 2(b)(5).
Three (3) percent of the Fund would be used to create the Air Quality Account, which would be managed by the Air Resources Board. These funds could be used to purchase alternative fuel transit buses as a means to reduce pollution. Id. at Section 2(b)(7).
The Transportation Impacts Mitigation Trust Fund would be established by using ten (10) percent of the Fund. Proposition 51 designates seventeen (17) projects that have to be funded first. The remainder of the account would be distributed by the Resources Agency by the specified formula. This fund would be used to mitigate the effect of the transportation infrastructure has on wildlife and the environment. Id. at Section 7.
Proposition 51 contains a provision that would allow for a reduction in the amount of revenue transferred from the General Fund to the Traffic Congestion Relief and Safe School Bus Trust Fund when the Governor determines that aggregate amount in the General Fund is less than the previous fiscal year. California Secretary of State, California Official Voter Information Guide, Analysis of Prop. 51, Transportation. Distribution of Existing Motor Vehicle Sales and Use Tax. Analysis by the Legislative Analyst http://voterguide.ss.ca.gov/propositions2.asp?id=323&sID=2 (accessed on October 17, 2002).
However, Proposition 51 also provides that should the reduction provision become operative, certain accounts would receive replacement funds when they become available. These replacement funds would be used to bring the accounts back to a full allocation of revenue, as if the reduction had not taken place. The accounts that would receive the replacement funds are: the Congestion Bottleneck Account; the Transit Capital Account; the Rail Grade Separations Account; the Transportation Impacts Mitigation Trust Fund; and the Intercity and Commuter Rail Capital and Operations Account. Id.
In 1988, the voters approved Proposition 98. Proposition 98 amended the California Constitution to protect the funding levels of California's schools. EdSource Online: Primer on Proposition 98, http://www.edsource.org/pub_edfct_prop98.cfm (accessed on June 16, 2002). Proposition 98 uses a complicated formula based partially upon the amount of revenue in the General Fund to establish the allocation of funds to schools. Id.
Proposition 51 would protect school funding by allowing the revenue allocated to the Traffic Congestion Relief and Safe School Bus Trust Fund from the General Fund to be considered in the formula for determining school funding. Proposition 51 accomplishes this by express language amending section 41202 of the Education Code. There is no current provision of the Education Code to protect school funding in this manner. Proposition 51 is the first attempt at recalculating the formula for determining school funding, so it allows the Legislature to amend this provision to ensure that Proposition 98 funds are protected.
The Safe Routes to School Program is due to sunset on January 1, 2005, pursuant to 2001 Stats. Ch. 600 (SB 10). Proposition 51 would repeal the sunset date, and make the Safe Routes to School Program permanent.
Proposition 51 would add two (2) projects to be funded by the Traffic Congestion Relief Fund. First, CalTrain would be extended from its present northern terminal to the Transbay Terminal in San Francisco. The second project would extend the Blue Line rail service from Pasadena to Claremont.
Proposition 51 would permanently set the monthly allocation to the Bicycle Transportation Account at $600,000. Proposition 51 accomplishes this by amending Section 2106 of the Streets and Highways Code.
Proposition 51 contains a severability clause. This clause allows provisions of Proposition 51 that are subsequently held to be invalid to be severed from the valid provisions. If a provision of Proposition 51 is deemed to be invalid, the court will look at three criteria to determine if the provision can be properly severed from the initiative. Gerken v. Fair Political Practices Comm'n, 6 Cal. 4th 707 (1993). In order to sever the invalid provision from the entire initiative, the provision must be grammatically, functionally, and volitionally separable. Id. Proposition 51 contains an abundance of provisions, so it would be difficult at best to make a determination as to whether or not any of the provisions could be properly severed from the initiative.
Although the initiative contains a complex variety of provisions, Proposition 51 appears to be fairly well drafted.
Proposition 51 does not appear to raise a federal Constitutional issue.
Provisions of Proposition 51 address various transportation topics such as traffic congestion, rail projects, school bus projects, and environmental impact issues, as well as formulas for calculating Proposition 98 funds. The California Constitution requires an initiative measure to embrace only one subject, or it cannot be submitted to the voters. Cal. Const. Art. II § 8(d). The California Supreme Court, however, has ruled "an initiative measure does not violate the single-subject requirement if all of its parts are reasonably germane to each other and to the general purpose or object of the initiative." Raven v. Deukmejian, 52 Cal. 3d 336, 346 (1990).
If one were to view Proposition 51 broadly as an initiative to improve California's transportation infrastructure, then the subjects are all reasonably related. Additionally, all of the programs and projects are allowed by California's Constitution, Article XIX, as being within the purview of transportation.
The Proposition 98 funding protection mechanism may not fall within the broad category of transportation that Proposition 51 encompasses. However, Proposition 51 addresses two school related transportation projects, Safe Routes to School and Safe/Clean School Buses. These two provisions may be enough to make the Proposition 98 funding protection not so attenuated from the broad transportation category; thereby not violating the single-subject rule.
VI. Public Policy Consideration
California faces a $23.6 billion budget short fall for the 2002-2003 fiscal year. Legislative Analyst Office, Overview of the 2002-03 May Revision (May 16, 2002). The General Fund, which is used to support the majority of the state's functions, will bear the brunt of this short fall. Id. Proposition 51 removes an estimated $870 million from the General Fund to be used exclusively for transportation related projects. Removing funds from the General Fund for the projects proposed by Proposition 51 would surely have a negative fiscal impact on other state provided programs such as Medi-Cal, social services, payments to local governments, and criminal justice programs.
The proponents of Proposition 51 believe that it will not have a significant impact on the General Fund. Planning and Conservation League: General Fund Aspects of the Traffic Congestion Relief and Safe School Bus Act (Nov. 16, 2001). The Act would only account for one percent of the overall state budget, and funding the Act could be suspended if the General Fund cannot sufficiently cover the expenditures of the Act. Id. Because of the suspension mechanisms and the small percentage that the Act represents of the overall state budget, the proponents believe that Proposition is "fiscally prudent." Id.
California's budget process defies a simple concise definition. Department of Finance, California's Budget Process, http://www.dof.ca.gov/fisa/bag/process.htm (accessed on June 16, 2002). Due to the size, complexity, and dynamics of the budget process, it is difficult to establish and maintain an orderly process. Id. For this reason, critics have questioned the knowledge of the voter to make budget decisions for the state through the initiative process. Kenneth P. Miller, Constraining Populism: The Real Challenge of Initiative Reform, 41 Santa Clara L. Rev 1037, 1053 (2001).
Proposition 51 would require thirty (30) percent of the state's share of sales tax revenue derived from new and used motor vehicle sales and leases to be allocated in a specific manner for various transportation projects. California currently has numerous transportation funding accounts, for example the Traffic Congestion Relief Fund, Transportation Investment Fund, State Transportation Improvement Program, Bicycle Transportation Account. As indicated in the Proposed Changes by Proposition 51 section, Proposition 51 would affect a number of current accounts and programs. To make an informed decision on Proposition 51, the voter needs to understand how these transportation programs and accounts interact with one another.
If passed, Proposition 51 would allow the Governor to suspend funding the Fund if there is a short fall in the General Fund. However, when the General Fund balance is restored or grows, the loss of revenue to the Fund would have to be restored to make up for the prior deficiencies. While this provision may appear to be fiscally prudent at first blush, it further limits the ability of the Legislature to decide where to allocate the state's financial resources. This limitation would be caused by the necessity of the Legislature to restore revenue to the Fund instead of to other programs such as Medi-Cal, social services, or criminal justice. These other programs would not have their funding restored because there is no statutory or constitutional provision to do so.
Proposition 51 would provide for forty-four (44) new transportation projects to be funded. The remaining revenue in the Fund would be distributed using various means. Proposition 51 appears to take the Fund and distribute it over a vast number of programs and projects. The proponents of Proposition 51 believe that the public wants to know what programs are being funded and built. Planning and Conservation League: Questions and Answers, http:www.pcl.org/transportation/questions.html (accessed on May 22, 2002). The goal of Proposition 51 is to improve California's transportation infrastructure, and the only way to guarantee that this goal is accomplished is to address the transportation system as a whole. Id. The voter needs to decide whether or not these specific projects merit funding, and if this is a proper method by which to provide funding to transportation programs.
Proposition 51 proposes to allocate thirty (30) percent of the state's share of sales taxes from new and used motor vehicle sales and leases for a myriad of transportation purposes. While Proposition 51 does not have any constitutional issues or fatal drafting flaws, it will require the people to make some public policy choices regarding the allocation of the state's financial resources. These choices will take on more significance in the face of a $23.6 billion budget short fall.
