As bonds dominate budget talk, transportation groups prepare ballot initiative campaign to protect highway revenues

The new year is shaping up as a banner one for state transportation
projects. Gov. Schwarzenegger and Democratic legislative leaders have
introduced a series of bond proposals aimed at securing billions for state
infrastructure projects. Meanwhile, a coalition of transportation advocates,
builders, labor unions and local governments are trying to build a firewall
around Proposition 42 to prevent the state from using gas tax money for
anything but roads and highways. Their options include a November ballot
initiative to protect the money.

Earlier this week, the Assembly Transportation Committee approved three
different constitutional amendments, each with a different version of a
so-called “Prop. 42 fix.” In the Senate, Caucus Chairman Tom Torlakson,
D-Antioch, has his own amendment which would prevent the state from
borrowing against Prop. 42 revenues.

Meanwhile, the California Alliance for Jobs, a group of construction
companies and union workers, is beginning to gather signatures on a ballot
measure that would build a wall around Prop. 42 money. The head of the
alliance, Jim Earp, says while his group is open to a legislative solution,

they are going ahead with the signature gathering process in hopes of
qualifying their measure for the November ballot.

Proposition 42 was passed overwhelmingly by voters in 2002, with nearly 70
percent of the vote, despite opposition from the California Teachers
Association. The measure reallocated part of the per-gallon tax on gasoline, and
stipulated that the money be used specifically for roads and highways. But
2005-06 was the first budget year in which all of the money in the
Proposition 42 account has actually been used for transportation. In past
years, some or all of the money has been siphoned into the general fund to
pay for other government programs.

Gov. Schwarzenegger has not formally endorsed a specific proposal to protect
Proposition 42 this year, though he did put a mechanism to wall off the
money in last year’s Proposition 76, the so-called Live Within Our Means
act. That measure was defeated by voters, along with the governor’s three
other special election initiatives.

Though Schwarzenegger has not signed off on a specific proposal, Assemblyman
George Plescia says the language in his ACA 4 is likely to receive the
backing of the administration. “I talked to the governor’s office, and they
said this is exactly what they want,” Plescia said. “The other two
[Assembly] proposals leave loopholes that would still allow the Legislature
to raid the Prop. 42 funds.”

While ACA 4 would effectively eliminate the Legislature’s ability to raid
Prop. 42 money for other general fund purposes, two other proposed measures
would provide similar protections for transportation revenues. But unlike
Plescia’s measure, both ACA 9 and ACA 11, authored by Assemblyman Russ Bogh
and Assembly Transportation Chairwoman Jenny Oropeza, D-Long Beach,
respectively, would provide some wiggle room.

Oropeza’s measure would allow the general fund to borrow money from the
transportation account no more than two years per decade, and only when the
governor declares a fiscal emergency. All loans must be paid back to the
account, with interest, within one year. The measure would, in some ways,
expand the state’s ability to borrow transportation dollars. Currently, only
the general fund can borrow from Prop 42 accounts, but Oropeza’s measure
would allow other special funds to borrow the money in certain situations.

Bogh’s ACA 9 would only allow a suspension of Prop. 42 if 80 percent of each
Legislative house gives its approval. Currently, a 2/3 majority is needed to
suspend the measure.

All three measures were passed by the Assembly Transportation Committee
Monday, where they will likely become part of the larger infrastructure
debate, says Oropeza. “All of them are going to go to [the Appropriations
Committee], and it will probably be a part of the discussion of all of these
transportation policies,” she said.

Any constitutional amendment to protect Prop. 42 would, by necessity, be a
stand-alone measure on either the June or November ballot. But legislators
and other interested parties all say there is a very real political link
between the Prop. 42 fix and the bond discussions between the Legislature
and the governor.

“To me, [the Prop. 42 protection] and the bonds are connected, politically,
even though they can’t be explicitly linked in the same piece of
legislation,” Earp said.

But just in case those talks falll apart, Earp and his coalition are taking
a page out of the governor’s playbook, gathering signatures for a ballot
initiative in November on their own. “We know how this works,” he said. And
while he refused to say how much his group was willing to spend on a ballot
measure, he said, “I’ve got the commitments and the money from our members
to get this thing well down field. Our basic position is, we would be more
than happy to work with the Legislature, but we’re prepared to go another

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