Debt fremont help relief

After two years of frozen transportation projects, Bay Area drivers and transit riders can expect that improvements will be erased completely, following release of Gov. Arnold Schwarzenegger's first transportation budget.

Friday's proposal would suspend Proposition 42 for the second consecutive year. In 2002, nearly 70 percent of California voters said they wanted sales tax on gas to pay for transportation improvements. The Schwarzenegger budget diverts $1.3 billion of that money to paying down loans to balance the state's bleeding general fundshortfall. It won't come back.

Other proposals in the $7.4 billion transportation budget were just as austere.

A law authorizing a $10 billion November state bond vote to build the first leg of a high-speed bullet train system between the Bay Area and Los Angeles should be repealed, the administration proposed.

A program to pay for 141 traffic-easing projects would be nixed under the new budget. The hit list includes extending BART to San Jose, building a fourth bore of the Caldecott Tunnel, establishing express Caltrain service on the Peninsula and easing the Sunol Grade commute with a new carpool lane.

But Schwarzenegger proposed eliminating only 338 positions in a Caltrans bureaucracy 21,000 strong, even though his auditors found the state's largest agency spent faster than the growth of inflation and population, and despite his calls in the State of the State speech for radical reform.

Schwarzenegger's proposal accelerates the custom of dipping into transportation funds to fill the state's empty coffers, paying for anything from prisons to health care to schools.

Sacramento's finance wizards plan to float a bond, backed by $800 million of promised federal transportation money, and use the money to balance the budget.

Unlike past years, the general fund loans leave the account that pays for transportation improvements bone dry.

Under the current proposal, the State Transportation Improvement Program, or STIP, will have $416 million in it. That's one-tenth the investment in 1996. Canceling past loans and borrowing more is expected to deplete the fund, Bay Area transportation finance experts agreed, meaning the region and the counties will have to scratch projects.

"It's a shell game. That's what Gov. Gray Davis used to do, and it's what got him fired by the California public," said San Mateo County Supervisor Mike Nevin. "I expect the budget will change significantly by June and if it doesn't, God help us all."

One of Nevin's pet projects, electrifying Caltrain, would take a double-hit. First, it's one of those 141 slated for elimination. And, the statewide $10 billion bullet-train bond would earmark nearly $1 billion for feeder rail projects, including improvements to Peninsula tracks. Schwarzenegger's finance team said California couldn't afford the extra debt and called for a repeal of the law authorizing a public vote.

"Notwithstanding the merits of providing high-speed rail ... it would be premature to move forward with addition(al) general fund debt of this magnitude at this time," the budget document stated, alluding to a $15 billion debt relief bond on the March statewide ballot.

Nevin and California High Speed Rail Authority board member Rod Diridon agreed, hinting that delaying the bullet train bond may be a boon. Transportation officials disagree about whether the proposal, if enacted, would kill the ambitious project.

"As I interpret it, the governor feels high-speed rail has merit, but the debt is too heavy," Diridon said. He suggested the bond go on the 2006 ballot, giving rail planners more time to polish lagging, expensive environmental and engineering reports.

Later this month, the state rail authority will release an environmental study that has already cost more than $20 million on the biggest project in U.S. history, Diridon said, noting that he will tap Congress for money to finish the work. He said tens of millions of dollars was a "conservative" estimate to finish the prep work.

"If the governor kills the bond, he kills the bullet train," said Assemblyman John Dutra, D-Fremont, who chairs the transportation committee. He vowed to oppose further erosion of transportation funding and suggested a quarter-cent sales tax would solve the problem.

"There's an awful lot of financial manipulation. It's not necessary, and it devastates our region," Dutra said, particularly critical of gutting BART-to-San Jose and other projects.

"These projects were selected outside the normal transportation planning process," the budget document said, referring to Davis' policy of hand-picking them. "To the degree these projects are the highest priority local or state projects, it is anticipated that funding will be sought through the STIP or other funding sources."

The problem, said Randy Rentschler, political director for the Metropolitan Transportation Commission, is that there is just not enough in the STIP. By formula, each county gets an annual allotment of STIP money to spend on improvements as it sees fit.

"It would take Santa Clara County 25 years to come up with its STIP money for BART," Rentschler said.

And Schwarzenegger's promise in the budget to tap Washington, D.C., for money offers little relief, meaning the Bay Area will increasingly have to take care of its own problems through such measures as local sales taxes and a March vote to raise bridge tolls.

"It's like a three-legged stool, with federal, state and local funds. These local votes matter more and more. Today, the state leg looks really weak and the feds are teetering," Rentschler said.

Congress has been slow to renew a federal transportation spending bill and current proposals are short of many expectations.

Dennis Fay, executive director of the Alameda County Congestion Management Agency, said locally supported projects would get first claim on whatever state money is available. He named a people mover connecting BART to Oakland International Airport, widening the chronically backed-up Interstate 238 in Hayward and the I-880/ Mission Boulevard interchange in Fremont.

Contact Sean Holstege at sholstege@angnewspapers.com

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