BILL ANALYSIS �
AB 2652
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Date of Hearing: April 28, 2014
ASSEMBLY COMMITTEE ON BUDGET
Skinner, Nancy, Chair
AB 2652 (Linder) - As Amended: March 28, 2014
SUBJECT : General Fund Revenues
SUMMARY : Appropriates any revenues above the Governor's
January 10th forecast to the repayment of transportation loans,
for Proposition 98 funding requirements and for deposit in the
Budget Stabilization Account. Specifically, this bill :
1) Requires the Department of Finance to calculate any
increase between the General Fund revenues projected in the
January 10th Governor's Budget for 2013-14 and 2014-15
fiscal year revenues.
2) Appropriates these General Fund revenues for the
following purposes:
a. First, to meet the Proposition 98 Guarantee
funding levels
b. Next the funding would be split:
i. 50 percent of the remaining funds
would be deposited in the Budget Stabilization
Account.
ii. Up to 50 percent of the remaining
funds, not to exceed $2.5 billion would be
appropriated to repay outstanding loans to
transportation special funds.
1. Any loans that would be
repaid to State Highway Account, the
Transportation Congestion Relief Fund, and
the Highway Users Tax Account would be
appropriated for local streets and roads.
2. Any remaining funds would
be transferred to the Budget Stabilization
Account.
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EXISTING LAW Government Code Section 13308 includes a
requirement for the Governor to submit a revision to the budget
on or before May 14th of each year, which includes all proposed
adjustments to the Governor's Budget that are necessary to
reflect updated estimates of state funding required pursuant to
Section 8 of Article XVI of the California Constitution, or to
reflect caseload enrollment or population changes.
FISCAL EFFECT : If this bill was in effect and current revenue
trends continue, this bill could result in hundreds of millions
to several billion of revenue being deposited into the Budget
Stabilization Account. It would also result in the early
repayment of up to $42.6 millions of dollars in transportation
special fund loans made to the General Fund. In addition, $817
million of loans could be repaid to the Transportation Debt
Service Fund, which would offset future debt service costs.
COMMENTS : This bill dedicates any additional revenues above
the Governor's January 10 budget forecast for 2013-14 and
2014-15 to repay transportation loans and for deposit in the
Budget Stabilization Account, net of any Proposition 98
guarantee obligation.
In the March 2014 Finance Bulletin, the Department of Finance
reported that revenues were $965 million above the levels
projected in the 2014-15 budget. The Governor will issue
officially revised revenue forecasts on or before May 14, 2014.
This bill defines transportation debt using a table in a
Caltrans report from December of 2013, which summarizes loans of
transportation funds. This list identifies approximately $1.5
billion in General Fund loans, including $817 million in
outstanding loans derived from weight fee revenues. Since the
2010 Gas Tax swap, weight fees are used to repay General
Obligation Bonds, these repaying these loans will be General
Fund neutral and thus they are not included in the Governor's
"Wall of Debt." This bill may require these funds be repaid to
the Transportation Debt Service Fund, where they would
eventually be used to offset borrowing costs or could be
borrowed again for immediate General Fund savings.
The Governor's 2014-15 proposed budget includes provisions that
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would repay $450.1 million in loans related to transportation
purposes. Of this amount, $338 million is Highway User's Tax
Account and $100 million is State Highway Account funding and
$12.1 million is from four smaller loans. This bill would
dedicate towards local streets and roads, rather than the
statewide purposes outlined in the Governor's Budget, which
include $27 million for State highway maintenance, $110 million
for State Highway Operation and Protection Program (SHOPP_
Capital Payment Projects and $100 million for SHOPP Traffic
Management System.
According to the Department of Finance's January 31st report
"Outstanding Budgetary Loans Made to the General Fund As of
December 31, 2014," the remaining outstanding transportation
special fund loans total $42.6 million: $29.1 million from the
Public Transit Account, $7.5 million from Local Airport Loan
Account, and $6 million from the Motor Vehicle Fuel Account.
Because the amount of outstanding debt, as identified by the
criteria set forth in this bill, is only $42.6 million, this
bill would effectively dedicate most additional revenues in the
May Revision to the Budget Stabilization Account..
Under the provisions of this bill, any additional revenues that
were recognized in the May Revision would be appropriated. This
would constrain the ability of the Legislature to weigh the
value and priority of building a large Rainy Day Fund against
other possible uses of these funds, including paying off other
outstanding debts and liabilities or making programmatic
investments.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Christian Griffith / BUDGET / (916)
319-2099
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