Legislative Analyst's Office, August 2000

Spending Plan

Chapter 3

Part 3

Expenditure Highlights


The 2000-01 budget provides a total of $9.6 billion for transportation related to infrastructure and mobility. This amount includes two main components, each discussed in detail below.

Traffic Congestion Relief Program

The Legislature established the Traffic Congestion Relief Program by trailer legislation (Chapters 91 and 92 [AB 2928, Torlakson and SB 406, Ortiz]) in order to provide a total of about $7 billion in new funds for transportation over six years. (This amount does not include the transfer of about $270 million in existing transportation revenues from the SHA to the Public Transportation Account [PTA] which is part of the package.) Figure 13 summarizes the program's funding levels and sources as well as how funds are allocated. Specifically:

Figure 13
Traffic Congestion Relief Program
Funding Levels and Uses
(In Millions)
2000-01 Annually
2001-02 Through 2005-06
Six-Year Total
Fund Sources and Levels
General Fund $1,500 -- $1,500
Sales tax on gasolinea 500 $976 5,380
State Highway Account transfer to PTA 45 45 270
Totals $2,045 $1,021 $7,150
Fund Allocations
Traffic Congestion Relief Plan $1,600 $678 $4,990
Local streets and roads 400 119 996
STIPb -- 119 596
Public Transportation Account 45 105 568
Totals $2,045 $1,021 $7,150
a State portion of sales tax on gasoline which was formerly deposited into the General Fund. Approximately $1 billion after transfers to Public Transportation Account (PTA) are netted out.
b State Transportation Improvement Program.
Totals may not add due to rounding.

Majority of Program Funds Transit Projects. Figure 14 shows the allocation of funds under the Traffic Congestion Relief Program. Of the total funding provided by the program, 55 percent is specified for transit projects (including bus, rail, and ferry projects), while 45 percent is specified for highway projects, including 28 percent for general purpose highway projects, such as interchange improvements or lane expansions, and 17 percent for the construction of carpool lanes. When compared to the original plan proposed by the administration, the final adopted program provides 64 percent more funding for highway-related improvements (approximately $2.2 billion in comparison to $1.3 billion).

Transit Funding Designated Mainly for Rail Projects. In total, the program allocated approximately $2.7 billion to fund specific transit projects. Most of these funds are designated for specific rail projects, accounting for about 40 percent of total program funding. A significant portion of the rail project funding (about 40 percent) is for one project--the extension of BART to San Jose. The total amount of funding specified for this project is $760 million, with an estimated total cost of $4 billion.

Program Funds Less Than One-Third of Total Cost of Projects. The program provides total state funds of $4.9 billion for specified projects with an estimated total cost of about $17.2 billion. In most cases, funds provided under the program will finance only a portion of the specified project's total cost, with the remainder of the cost to be provided from other state, federal, or local sources. According to Caltrans, an additional $1.9 billion in other funds--including STIP, federal, and local funds--have been committed to projects identified in the program, bringing the current funding shortfall to approximately $10.4 billion.

Governor's Vetoes. The Governor eliminated funding for ten specific projects and reduced funding for three projects that were added by the Legislature, for a total reduction of $93.8 million.

California Department of Transportation

To implement the state's ongoing transportation program, the budget provides about $6.7 billion for departmental support, capital outlay, and local assistance. The budget also includes an estimated $894 million in reimbursements, bringing the total new resources available for expenditure to approximately $7.6 billion.

Caltrans Support Budget Increased by 20 Percent Above 1999-00 Level. The budget provides almost $2 billion for support of all programs within Caltrans, a 20 percent increase over the 1999-00 level. Half of these funds are for the capital outlay support program, which includes the design, engineering, and environmental review of highway projects. The second largest support category is for the highway maintenance program, for which the budget appropriates $768 million, a 3 percent increase above the 1999-00 level.

For 2000-01, the capital outlay support program is budgeted for 12,930 personnel-year equivalents (PYEs), which includes expenditures for state staff positions, as well as overtime work and work to be performed by private consultants. This staffing level represents an increase of approximately 15 percent relative to 1999-00, including an 8 percent increase in estimated expenditures for state staff and almost twice as much funding for work to be performed by private consultants--an increase from 592 to 1,159 PYEs.

The vast majority of capital outlay support resources are provided to handle ongoing workload related to the STIP and the State Highway Operation and Protection Program (SHOPP). Approximately $120 million is allocated in the 2000-01 budget for staff support to work on projects included in the Traffic Congestion Relief Program discussed above.

The other major Caltrans support expenditures are as follows:

With respect to capital outlay, the budget provides $3.3 billion from state special funds, federal funds, and reimbursements for projects contained in the STIP and SHOPP, the retrofit soundwall program, and for seismic retrofit to Caltrans office buildings.

In addition, the budget provides approximately $1.5 billion in state and federal funds for local assistance in the highway, mass transportation, aeronautics, and planning programs. These funds are allocated to local transportation agencies for projects off the state highway system, including transit capital improvements and rehabilitation of local streets and roads.

Governor's Vetoes. The Governor vetoed the following items:

Other Transportation Programs

In addition to funding the Traffic Congestion Relief Program and Caltrans' ongoing programs, the budget includes funding for the following:

High-Speed Rail Authority. The budget provides $5 million in General Fund revenues to initiate program environmental impact assessment work for the proposed statewide high-speed rail system.

San Francisco Bay Area Water Transit Authority. The budget, as enacted by the Legislature, included $14 million in General Fund revenues for the authority to begin planning and design work for a regional ferry transit service. The Governor, however, objected to the use of the General Fund for this purpose (preferring funds from the PTA) and vetoed $12 million. The remaining $2 million, as part of the Traffic Congestion Relief Program, is designated for commencing ferry service from Treasure Island.

California Highway Patrol (CHP). The budget, as enacted by the Legislature, provided $997.6 million for support of CHP activities, an increase of 8.7 percent over the 1999-00 level. In addition to funding ongoing patrol services, the budget included:


The 2000-01 budget, as adopted by the Legislature, provides a total of $6.2 billion for resources programs, of which $1.5 billion is from the General Fund and $2.5 billion is from bond funds. The remaining $2.2 billion are special funds, federal funds, and reimbursements. This total amount is an increase of about $2.6 billion over estimated 1999-00 expenditures. This increase largely results from the appropriation of Propositions 12 and 13 (park and water) bond funds approved by voters in March 2000. Significant features include:

The budget package also includes legislation--Chapter 113, Statutes of 2000 (SB 1647, O'Connell)--creating a Natural Heritage Preservation Tax Credit. This program will provide tax credits of 55 percent of fair market value to persons who donate qualifying property to state, local, or nonprofit organizations. The measure provides a total of $100 million in tax credits, anticipated to be made available over three years.

Environmental Protection

The 2000-01 budget, as adopted by the Legislature, provided about $1.5 billion for environmental protection programs, including about $1 billion for the support of various environmental protection agencies and $504 million for local assistance. This amount is an increase of about $540 million, or 54 percent, over estimated 1999-00 expenditures. Significant features include:

The Governor vetoed or reduced legislative augmentations totaling $44.3 million. In addition to the vetoes and reductions noted above (totaling $15.5 million), these include:

In addition, the Legislature approved an environmental protection trailer bill--Chapter 144, Statutes of 2000 (AB 2872, Shelley)--that establishes parameters for a study of indoor air quality in portable classrooms and the development of child-focused cancer risk guidelines; earmarks $5 million to pay cleanup costs of fire safety agencies that own or operate underground tanks; creates an account to deposit funds for the new brownfield redevelopment program; makes a number of changes to the locally implemented hazardous waste and material program known as the "CUPA" program to improve consistency in program implementation and state oversight; and establishes a comprehensive coastal resources monitoring and assessment program for fish and shellfish.

Capital Outlay

The budget package includes $4 billion for capital outlay (excluding highways and transit), as shown in Figure 15 (see page 56). This includes $1.2 billion for local capital outlay projects. About 63 percent of total funding is from bonds--primarily for resources and higher education. The majority of General Fund spending is in three areas--resources, corrections, and higher education.

Figure 15
2000-01 Capital Outlay Programs
Appropriations by Department and Fund Type
(In Millions)
Department Bondsa General Special Federal Total
Judicial Council -- $6.0 -- -- $6.0
Emergency Services -- 31.4 -- -- 31.4
Justice -- 31.7 -- -- 31.7
State and Consumer Services
California Science Center -- $3.1 -- -- $3.1
Franchise Tax Board -- 0.1 -- -- 0.1
General Services $25.4 38.4 $6.3 -- 70.1
Transportation -- -- $9.7 -- $9.7
Highway Patrol -- -- 7.4 -- 7.4
Motor Vehicles -- -- 18.1 -- 18.1
Conservation Corps -- $1.3 -- -- $1.3
Conservation (local assistance) $5.0 3.6 -- -- 8.6
Tahoe Conservancy 6.4 6.1 $4.9 -- 17.4
Forestry and Fire Protectionb 2.7 20.5 2.0 -- 25.2
Fish and Gameb 0.6 13.9 1.1 $0.1 15.7
Wildlife Conservation Board 244.7 115.0 20.8 -- 380.5
Boating and Waterwaysb -- 10.2 61.5 2.4 74.1
Coastal Commission (local assistance) -- 1.2 0.4 -- 1.6
Coastal Conservancy 186.9 52.7 7.1 2.0 248.7
Parks and Recreationb 713.4 85.7 15.8 -- 814.9
Santa Monica Mountains Conservancy 24.0 0.3 -- -- 24.3
Waste Management Board (local assistance) 2.6 0.5 5.0 1.5 9.6
Coachella Valley Mountains Conservancy 4.9 -- -- -- 4.9
Water Resourcesb 23.5 62.7 375.5 -- 461.7
Health and Social Services
Health Services -- $5.9 -- -- $5.9
Mental Health -- 8.4 -- -- 8.4
Employment Development -- -- -- $4.1 4.1
Rehabilitation -- 0.3 -- -- 0.3
Corrections -- $98.6 -- -- $98.6
Youth Authority -- 25.1 -- -- 25.1
Education -- $7.8 -- -- $7.8
State Library -- 0.3 -- -- 0.3
University of California $812.7 133.7 -- -- 946.4
California State University 153.4 22.0 -- -- 175.4
California Community Colleges 304.3 -- -- -- 304.3
General Government
Office of Criminal Justice Planning (local assistance) -- $96.0 -- -- $96.0
Arts Council (local assistance) -- 26.7 -- -- 26.7
Food and Agriculture -- 1.4 $0.6 -- 2.0
Military -- 2.0 -- $0.1 2.1
Veterans' Home of California $0.7 4.7 -- -- 5.4
Unallocated -- 2.0 -- -- 2.0
Totals $2,511.2 $919.3 $536.2 $10.2 $3,976.9
a General oligation bonds except for the University of California which includes $600 million in lease-payment bonds.
b Includes state capital outlay and local assistance projects.

State Capital Outlay. Some of the major state capital outlay projects and programs funded in the budget package include:

Local Assistance Capital Outlay. The budget package also funds many local assistance capital outlay projects including 438 parks, natural resources, and community facilities projects, financed from both the General Fund ($156 million) and Propositions 12 and 13 bonds from the March 2000 ballot ($518 million). The budget also includes $367 million in bond funds under Proposition 12 for grants to local governments based on the measure's population formulas.

Governor's Vetoes. Figure 15 reflects the amounts included in the budget package after the Governor vetoed a total of $747 million ($698 million general obligation bonds and $49 million General Fund). Nearly all of this reduction was in the area of resources where the Governor vetoed $438 million in local assistance projects and $300 million in state projects. In local assistance, 90 percent of the amount vetoed was for local parks and recreation projects while for state projects, over 80 percent of the vetoes involved projects for the Department of Parks and Recreation ($117 million) and the Wildlife Conservation Board ($132 million).

Other Major Provisions


The Legislature approved $575 million from the General Fund in the Department of Housing and Community Development's (HCD) budget for spending on various new and expanded housing programs. The Governor vetoed $75 million from the multifamily housing program, bringing total HCD augmentations to $500 million (see Figure 16). The new programs include:

Figure 16
Housing Package
(In Millions)

2000-01 Budget

Local Government Incentives
Jobs-Housing Balance Improvement $110.0
Home Ownership
CalHome $40.0
Mobilehome ownership 10.0
Homebuyer's Downpayment Assistance 50.0
Farmworker Housing
Base program 32.0
Manufactured housing 3.0
Unhealthy and unsafe units 3.0
Health services demonstration 5.0
Multifamily Housing
Base program $177.0
Downtown Rebound
Project loans 22.6
Planning grants to local governments 2.4
Emergency Housing Assistance Program
Operating grants $10.0
Capital grants 25.0
Other Programs
Code Enforcement Incentives $5.0
Interregional Partnership Pilot 5.0
Total $500.0

Local Government

The budget sets aside $200 million on a one-time basis from the General Fund for use by the Conference Committee on AB 1396 (Villaraigosa) for implementing a local government finance reform proposal. In addition, the budget includes substantial funding for local governments in a number of program areas. For instance, the Traffic Congestion Relief Program provides $400 million in 2000-01 for local streets and road funding. In the criminal justice area, local governments will receive new funding for the Citizens' Option for Public Safety (COPS) program, law enforcement technology, and juvenile justice programs.

Employee Compensation

The budget includes $80.4 million ($50.4 million General Fund) to fund additional compensation for state civil service employees. This amount includes:

In addition, under current memoranda of understanding (which expire June 30, 2001), state employees will receive a 4 percent salary increase effective September 1, 2000. The cost of this increase--around $300 million ($150 million General Fund)--is included in each state department's budget. Negotiations for new memoranda will begin during 2000-01.

Smog Check Program

The budget includes $114 million from special funds to continue the Smog Check Program in the Department of Consumer Affairs, Bureau of Automotive Repair. In an attempt to increase participation in the High Polluter Repair and Removal Program, $47 million of this amount will go towards reducing vehicle owners' copayments for vehicle repair and increasing state payments for vehicle repairs and vehicle buyback. Figure 17 summarizes these changes.

Figure 17
Changes in Smog Check Consumer
Assistance Programs
Program 1999-00 2000-01
Vehicle owner copayments:
Income-Eligible Repair Assistancea $75 $20
Test-Only Repair Assistanceb 250 100
Maximum state payments:
Income-Eligible and Test Only Repair Assistance 450 500
Vehicle Retirement (buyback) 450 1,000
a Income at or below 185 percent of federal poverty level.
b Vehicle must be directed to test-only station. No income qualifications.

Department of Food and Agriculture

The budget increases General Fund support for pest exclusion activities at both the state and local levels. The major increases from the prior year include:

Trade and Commerce Agency

The budget provides additional General Fund support for several new and existing programs within the Trade and Commerce Agency. The budget includes subsidies for film permit payments made to governments and biomass facilities that generate electricity from agricultural waste. In addition, additional reserve funds are provided for guaranteeing loans to small businesses.

Filming Permits. The budget allocates $15.3 million for a new program to subsidize the film industry for permit payments made to local, state, and federal governments. Only actual costs incurred by the permitting entity can be reimbursed. The program is intended to encourage television and film productions to film in California.

Biomass Facilities. The budget provides $10 million for an incentive payment program to subsidize biomass facilities that convert agricultural waste into electricity. Under this new program--created by Chapter 144, Statutes of 2000 (AB 2872, Shelley)--grants will be awarded to air quality management districts. The districts will then make incentive payments to the biomass facilities at a rate of $10 per ton of agricultural waste used to generate electricity.

Small Business Loan Guarantees. The budget provides an additional $8 million in reserve funds for the existing Small Business Loan Guarantee Program to increase the number of financial development corporations (FDCs) that provide loan guarantees. Currently, eight FDCs guarantee loans to companies that are otherwise unable to secure bank loans. The additional funds will add two new FDCs. The program has statutory authority to guarantee loans to a maximum 4-to-1 loan-to-reserve ratio.

Department of Managed Care

The Legislature approved a budget of $37.8 million from special funds (assessments levied on HMOs) for the new Department of Managed Care. The department's basic function is to regulate HMOs and medical provider groups. The budgeted funding level includes $6.5 million for the following legislative augmentations:

The Legislature also created a separate line item for OPA to reflect its independence from the department and to facilitate legislative oversight. The OPA will focus on health care consumer trends and issues. The budget provides $988,000 for OPA.

The Governor vetoed $3.8 million by (1) deleting the $560,000 for temporary help and consultants for OPA, (2) reducing consumer education and outreach by $3 million, and (3) reducing the HMO report card by $250,000.

Department of Insurance

The budget includes $16.5 million from special funds and 114 positions to implement Chapter 884, Statutes of 1999 (SB 940, Speier) and Chapter 885, Statutes of 1999 (AB 1050, Wright). These measures authorized an increase in the auto insurance policy fee of up to 80 cents to: (1) combat organized crime rings involved in fraudulent auto accident claims, (2) eliminate a backlog of consumer complaints regarding auto insurance, and (3) improve consumer service activities. This funding includes $4.8 million in local assistance for auto fraud activities performed by district attorneys in conjunction with the department.


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