Division of Budgets

2008 Fund Estimate2008 Fund EstimateAssumptionsAssumptions

Tab 120Ref. 4.3

Presented to thePresented to the

California Transportation California Transportation CommissionCommission

June 2007June 2007

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Fund Estimate AssumptionsFund Estimate Assumptions

Assumptions will guide revenue and expenditure calculations in the Fund Estimate (FE).

Choices made now will have a lasting impact and need to be based on the best information available.

Two key policy issues are identified that could have a significant impact on the FE.

Federal Obligation Authority (Item SHA 13) Major Public Transportation Account (PTA) Items

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Key Policy AssumptionsKey Policy Assumptions

Federal Obligation Authority Options (Item SHA 13)

A. Hold the Federal OA level constant at the 2008-09 level ($17.0 billion).

B. Escalate the 2008-09 OA level at 1.8 percent, consistent with the projected growth rate for fuel excise tax revenues ($17.6 billion).

C. Escalate the amount of OA received in 2006-07 at 1.8 percent over the FE period ($15.8 billion).

D. Escalate the amount of OA received in 2006-07 at 1.8 percent, then hold OA constant over the FE period ($14.9 billion).

E. Use the AASHTO April 2007 projected SAFETEA-LU estimates, including the drastic OA reduction in 2010 ($16.2 billion).

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Major PTA Items: Spillover Revenues (PTA 5) Section 183.1 Transfer (SHA 9 & PTA 7) General Fund Expenditures (PTA 12) Spillover to STA (PTA 11)

Significant Revenue Impact $1.3 billion in 2007-08 Up to $5 billion over FE period

Outcome Uncertain Competing proposals in Legislature

Key Policy AssumptionsKey Policy Assumptions

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Department Department RecommendationRecommendation

Delay adoption of FE Assumptions until enactment of the 2007-08 Budget.