Summary of LAO Findings and Recommendations on the 2010-11 Budget

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Program
Budget Issue		LAO Finding Or
Recommendation
Last Updated
 Go Back  Crosscutting The budget proposes to eliminate the state's 6 percent sales tax on fuel. The proposal also increases the state's excise tax on fuel by 10.8 cents per gallon in 2010-11, which would generate roughly $1 billion less in revenues than under current law. The new excise tax revenues would fund a different mix of transportation purposes, including paying for a substantial portion of the state’s transportation bond debt service on an ongoing basis, while eliminating transit-related funding. The Governor’s proposal has merit due to the ongoing General Fund benefit. We recommend that the Legislature consider modified versions of the proposal that would likewise achieve ongoing General Fund benefit but would also maintain funding for transportation purposes at or near current levels to fund the state’s substantial transportation needs. 1-22-10

Detailed Narrative

Please see our handout for a detailed description of the proposal and some LAO options.