| Budgeting and Appropriations | Annual budget; fiscal year begins July 1. Transportation programs receive state funding from several dedicated revenue sources. The Legislature can make some changes to the mix of transportation programs that are funded, but within various formulas, requirements and restrictions on funding certain programs or the uses of certain revenues. |
| Bonding or Pay-as-You-Go | California mostly uses pay-as-you-go, but voters have approved several general obligation bonds over the years, including $20 billion for transportation in 2006 and $10 billion for rail and transit in 2008. |
| State-Level Funding Provided for DOT Budgets | FY |
| Allocation of Federal Transportation Funds to the DOT | Federal transportation funds flow directly to Caltrans, but Caltrans needs a budget appropriation in order to have the authority to spend the funds. Appropriation authority is given in the budget under broad categories (e.g., support, local assistance, capital outlay and others). |
| Allocation of State Transportation Funds to the DOT | As with federal funds, state transportation funds essentially flow directly to Caltrans, but authority to spend the funds is given in the budget under broad categories. The governor and Legislature typically include some more specific budget bill language each year regarding the use of some funds. |
| Traditional State Funding and Finance for Highways | Excise tax on fuel; truck weight fees; interest income; general obligation bonds. Toll revenues generally go to local transportation agencies or private entities, not the state, but are used to fund some work on highways and bridges. |
| State Funding and Finance for Other Modes | Transit and rail: Sales tax on diesel; general obligation bonds; locally implemented general sales tax; weight fees; interest income; excise tax on fuel. Most diesel sales taxes are deposited into a trust fund that can be used only for transit; these also are used to subsidize Amtrak passenger service. Aviation: Excise tax on aviation fuel; excise tax on jet fuel. |
| Innovative Transportation Funding and Finance | GARVEE bonds; Build America Bonds; federal credit assistance (TIFIA); state infrastructure bank (federally capitalized); PPPs (authorized in statute, used for at least two projects); design-build (authorized in statute, used as a component of at least 10 projects); advance construction. Traffic camera fees are used only at the local level and fee revenues are not dedicated to transportation uses. Developer impact fees also are collected only at the local level, and in some cases are dedicated to transportation. |
| Dedicated/Restricted State Funds and Revenues | Restrictions are tied to both revenue sources and accounts. Many complex restrictions on the use of transportation revenues appear in the constitution, statute and case law. The constitution restricts the use of fuel excise tax revenues to public streets and highways and fixed guideway mass transit projects (Cal. Const. art. XIX §2). The constitution also dedicates the use of vehicle-related fees and taxes to the same purposes as fuel taxes, as well as to the administration and enforcement of laws regulating use, operation or registration of vehicles-including traffic and vehicle laws-and mitigation of the environmental effects of motor vehicle operation (Cal. Const, art. XIX §3). The constitution also dedicates to certain transportation purposes the use of the Highway Users Tax Account (trust fund) (Cal. Const, art. XIX §2); the Public Transportation Account (trust fund) (Cal. Const, art. XlXa); and the multimodal Transportation Investment Fund (trust fund) (Cal. Const. art. XIXb). The constitution, as amended by Proposition 22 (2010), prohibits the state from borrowing most fuel tax revenues or funds in the accounts listed above. Proposition 22 also restricts the states ability to use fuel tax revenues to pay debt service on transportation bonds. Other special accounts exist for aeronautics, bicycle, pedestrian and other purposes. Excise taxes and truck weight fees can be used mainly for highways and local roads. General obligation bonds are restricted as described in the ballot measures needed to authorize them. |
| DOT Authorized to Retain Surplus Funds | Yes and no, depending on the type of appropriation. Support appropriations expire after one year. The budget bill specifies how long Caltrans has to encumber and then liquidate capital appropriations. Caltrans cannot spend appropriations for which the budget authority has expired and the designated project has been de-obligated unless additional authority is granted in the state budget act. Unspent dedicated transportation funds remain in state transportation accounts and are available for future transportation purposes. |
| Legislative Approval Required to Move Funds Between Projects | No legislative approval is required. However, approval within the executive branch is required for certain changes. Specifically, for capital allocations and project development work performed by an agency other than Caltrans, the California Transportation Commission is required to deprogram funds on one project and reprogram them on another. For support allocations for project development work performed by Caltrans, the department has authority to move funds between projects without any approval. |
| Transportation Funding Allocations through Local Aid | State and federal funds are allocated to local agencies based on existing formulas, such as the federal STP formula, and other formulas related to population, lane miles, snow removal needs, etc. The Legislature must annually approve appropriation of these funds. |