California Proposition 116, Bonds for Passenger and Commuter Rail (1990)
Proposition 116 authorized a bond of $1.99 billion for passenger and commuter rail administered through the Public Transportation Account (PTA). The PTA account had been created by the Transportation Development Act of 1971. Proposition 116 also "stated that certain revenues from gasoline sales taxes must be placed in the PTA for transportation planning and mass transportation purposes."
Text of measure
Proposition 116 was described as, "Authorizes general obligation bond issue of $1,990,000.000 to provide funds principally for passenger and commuter rail systems, with limited funds available for public mass transit guideways, paratransit vehicles, bicycle and ferry facilities, and railroad technology museum. Allocates certain amounts to specified state and local entities through a grant program administered by the California Transportation Commission. Program will require some matching funds from local entities. Appropriates money from state General Fund to pay off bonds."
The fiscal estimate provided by the California Legislative Analyst's Office said:
- "Direct Costs of Paying Off the Bonds. For these types of bonds, the state typically makes principal and interest payments from the state's General Fund over a period of about 20 years. If all of the bonds authorized by this measure are sold at an interest rate of 7.5 percent, the cost would be about $3.6 billion to pay off both the principal ($2 billion) and interest ($1.6 billion). The average payment for principal and interest would be about $180 million per year."
Lawsuit over diversion of funds
In 2005, the State of California stopped depositing transportation-earmarked funds into the PTA.
The California Transit Association (CTA) filed a lawsuit on October 10, 2007, seeking to halt the diversions in 2007 and to have funds that had been diverted restored to the PTA. A California state appeals court ruled unanimously in June 2009 that the state’s diversion of funds since 2007 was improper and denied the state’s contention that the recently created "Mass Transportation Fund" (MTF) was a proper recipient for PTA funds and further that PTA funds could not be diverted prior to placement in PTA accounts.