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California Proposition 2, Loans of Transportation-Related Revenues (1998)

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This article is about a 1998 ballot proposition in California. For other measures with a similar title, see Proposition 2.
California Proposition 2 was on the November 3, 1998 ballot in California as a legislatively-referred constitutional amendment, where it was approved.

Proposition 2 allows loans to California's General Fund from transportation funds only if the loan is repaid in the same budget year. Under the terms of Proposition 2, the governor is allowed to extend the one-year loan period by declaring a monetary emergency or if the General Fund has dropped from the year before.[1]

Election results

Proposition 2
Approveda Yes 5,521,372 75.39%

Of voters who cast a vote in this election, 1,297,305 or 15.05% did not cast a vote on Proposition 2.

Constitutional changes

California Constitution

Proposition 2 made these changes to the California Constitution. It:

Text of measure


The ballot title was:

Transportation: Funding. Legislative Constitutional Amendment.


The official ballot summary said:

  • Requires loans of transportation related revenues to the General Fund be repaid the same fiscal year, or within three fiscal years if the Governor declares an emergency significantly impacting the General Fund or General Fund revenues are less than the previous fiscal year's adjusted revenues.
  • Allows loans of certain transportation related revenues to local entities conditioned upon repayment, with interest, within four years.
  • Designates local transportation funds as trust funds and prohibits abolition of all such funds created by law.
  • Restricts allocations from local transportation funds to designated purposes relating to local transportation.
Proposition 2.PNG

Fiscal impact

The California Legislative Analyst's Office provided an estimate of net state and local government fiscal impact for Proposition 2. That estimate was:

"It is unlikely that this measure would have any fiscal impact on state and local governments."

Campaign spending


Supporters of Proposition 2 spent $198,150. The top contributors to pass the measure were:

  • Granite Construction Inc.: $25,000
  • Kiewit Construction Group, Inc.: $25,000
  • A. Teichert & Son, Inc.: $15,000
  • CalMat: $15,000
  • E.L. Yeager Construction Co. Inc.: $10,000
  • EUCA / 1-3: $10,000
  • DeSilva Gates Construction: $10,000
  • Griffith Company: $10,000
  • Peterson: $10,000
  • Transportation Project Calif. 98: $6,000


No campaign spending against Proposition 2 was reported to the California Secretary of State.

Implications in 2009

In 2009, the law firm of Nielsen, Merksamer, Parrinello, Mueller & Naylor argued that Proposition 2, along with Proposition 5 from 1974, would make it unconstitutional for the state government to divert gas tax money from municipalities to the state's general fund.[2]

In a statement accompanying the Nielsen, Merksamer analysis as it was released to the press and members of the California State Legislature, Judith Mitchel of the League of California Cities said, "As a lawyer and an elected official who has taken an oath to defend the constitution of the state of California, it is pretty obvious that it is illegal to steal local gas tax funds when the voters have twice restricted such raids."[2]

Path to the ballot

Proposition 2 was referred to the ballot through ACA 30 (Proposition 2).

Votes in legislature to refer to ballot
Chamber Ayes Noes
Assembly 71 2
Senate 32 1

See also

External links