The 2024-25 Budget: Transportation Budget Solutions

2024-25 BUDGET The 2024-25 Budget: Transportation Budget Solutions GABRIEL PETEK | LEGISLATIVE ANALYST | FEBRUARY 2024 SUMMARY Governor Proposes $4.3 Billion in Budget Solutions From Transportation Programs. Using a variety of different approaches, the Governor proposes generating $4.3 billion in General Fund solutions from transportation programs during the budget window (2022-23 through 2024-25). These proposals include (1) making $2.8 billion in cash flow adjustments, which revert General Fund that has already been awarded to projects with the intent to restore the funding in a future year when it would be needed to cover expenditures; (2) delaying $1 billion in program expenditures, which reduces costs in 2024-25 with the intent of restoring the funding in 2025-26; (3) shifting $796 million in expenditures from the General Fund to the Greenhouse Gas Reduction Fund (GGRF); and (4) making $296 million in program reductions. However, the Governor proposes to restore about $3.3 billion of the postponed and delayed spending in future years, so the net General Fund savings across the multiyear forecast period totals only $1.1 billion. Recommend Legislature Adopt Most Proposed Solutions. Given the General Fund condition, we recommend the Legislature adopt the proposed cash flow adjustments, certain fund shifts, and reductions. These actions would reduce cost pressures on the General Fund in the near term with minimal impacts to existing programs and infrastructure projects. We note that the proposals do come with some trade-offs for the Legislature to consider. First, the cash flow adjustments add out-year cost pressures to the General Fund, which would complicate projected future deficits and necessitate additional General Fund solutions in the coming years. The Legislature has limited flexibility around ultimately providing these funds given the state has already committed them to specific projects. Second, the proposed reductions would result in fewer projects being funded for active transportation and the Port of Oakland. On balance, however, we find the General Fund benefits that the proposals would yield are sufficient to justify their adoption. Recommend Identifying Additional Options in Case They Are Needed. The Legislature could need additional General Fund solutions if the budget problem worsens and/or if it wishes to reject some of the Governor’s proposals. Some options the Legislature could consider to generate additional General Fund savings from transportation programs include reducing funding for the formula-based portion of the Transit and Intercity Rail Capital Program (TIRCP), using other transportation special funds to replace some one-time General Fund, and replacing General Fund for existing competitive TIRCP commitments with the program’s base funding that would otherwise support future projects. Finding additional savings will necessarily result in the trade-off of supporting fewer transportation activities overall compared to what was originally intended in prior budget agreements, whether that be for transit and rail projects or highway maintenance. While this process will be challenging, taking the time to research and select potential options over the spring will better prepare the Legislature to make decisions in May and June when it will not have much time to gather information and carefully consider program trade-offs before the budget deadline. www.lao.ca.gov 1 2024-25 BUDGET Background certain programs—such as the Port and Freight Infrastructure Program—to future years. Overall, Overview of California’s Transportation the budget agreement sustained the same overall System. California’s transportation system amounts for the various programs within each consists of streets, highways, railways, airports, package across a multiyear period. The budget also seaports, bicycle routes, and pedestrian pathways. allowed transit agencies facing operational funding All of these various modes provide people and shortfalls to use the $4 billion provided and planned businesses the ability to access destinations and for the formula-based component of TIRCP for move goods and services throughout the state. operational (rather than just capital) expenditures. Funding for the state’s transportation system Figure 1 displays the multiyear funding totals comes from numerous local, state, and federal for each package as revised by the 2023-24 sources. State funding primarily comes from various budget agreement. fuel taxes and vehicle fees that are dedicated to specific transportation purposes. In 2024-25, total Figure 1 also displays $1.4 billion included for state transportation funding from these sources certain other significant transportation spending is estimated to be $14.6 billion. (This does not not adopted as part of the two thematic packages. include revenues from vehicle fees that support the This includes $1.1 billion planned across 2023-24 Department of Motor Vehicles and the California through 2026-27 from various special funds Highway Patrol.) Most of this funding is dedicated to support the Zero-Emission Transit Capital to maintaining, rehabilitating, and improving state Program. This new program was created as highways and local streets and roads, with a part of the 2023-24 budget package to further smaller amount supporting transit operations and support transit agencies across the state. The capital improvements. program provides formula funding for agencies to purchase zero-emission transit vehicles and Recent Budget Packages Included related infrastructure and—for those agencies Significant Augmentations for Transportation. facing operational funding shortfalls—also can be The 2022-23 budget package planned for used to cover operational expenses. The figure significant multiyear General Fund augmentations also includes $280 million from the General Fund for transportation programs. In total, these provided as part of the 2021-22 budget package to augmentations intended to provide $10.9 billion support infrastructure improvements at and near over a five-year period. This included $9.5 billion the Port of Oakland. through a Transportation Infrastructure Package and $1.4 billion through a Supply Chain Package. State Faces a Multiyear, Multibillion-Dollar The augmentations represented unprecedented Budget Problem. Due to a deteriorating revenue levels of General Fund for these types of programs, picture relative to expectations from June 2023, many of which historically have been supported both our office and the administration anticipate with state transportation revenue sources. This that the state faces a significant multiyear budget anomalous General Fund spending was enabled problem. A budget problem—also called a deficit— by the significant tax revenue surpluses the state occurs when funding for the current or upcoming received—and expected to receive—over the past budget is insufficient to cover the costs of currently few years. authorized services. Estimates of the magnitude of this shortfall differ based on how “baseline” To help address the General Fund shortfall that spending is defined—the administration estimates began materializing last year, the 2023-24 budget a $38 billion problem whereas in January our office made several modifications to the Transportation estimated that the Governor’s budget addresses Infrastructure and Supply Chain packages. a $58 billion problem—as well as somewhat Specifically, the budget shifted costs for certain different revenue projections. Regardless of these programs—such as the Active Transportation distinctions, it is clear that the state faces the Program (ATP)—from the General Fund to the State task of “solving” a substantial budget problem. Highway Account (SHA) and delayed funding for 2 LEGISLATIVE ANALYST’S OFFICE 2024-25 BUDGET Figure 1 Transportation Funding Packages as Revised in 2023-24 Budget Agreement General Fund Unless Otherwise Noted (In Millions) 2021-22 and Program Department 2022-23a 2023-24 2024-25 2025-26 2026-27 Totals Transportation Infrastructure Package $4,550 $2,600 $2,000 $350 — $9,500 Competitive TIRCP CalSTA $3,650b — — — — $3,650b Active Transportation Program Caltrans 750 $300c — — — 1,050c Highways to Boulevards Pilot Caltrans 150 — — — — 150 Program Grade separation projects within CalSTA/ — — — $350 — 350 competitive TIRCP Caltransd Local climate adaptation Caltrans — 200c — — — 200c programs Formula-based TIRCP CalSTA — 2,000 $2,000 — — 4,000 Clean California Local Grant Caltrans — 100 — — — 100 Program Supply Chain Package $670 $250 $250 $210 — $1,380 Port and Freight Infrastructure CalSTA $600 $200c $200 $200 — $1,200c Program Supply chain workforce campus CWDB 30 40 40 — — 110 Port operational improvements Go-Biz 30 — — — 30 Increased commercial driver’s DMV 10 10 10 10 — 40 license capacity Other $280 $410 $230 $230 $230 $1,380 Port of Oakland improvements CalSTA $280 — — — — $280 Zero-Emission Transit Capital CalSTA — $410e,f $230e $230e $230e 1,100e, f Program Totals $5,500 $3,260 $2,480 $790 $230 $12,260 a Funding for Transportation Infrastructure Package and Supply Chain Package were provided as part of the 2022-23 funding agreement, but some funding was scored to 2021-22. b Includes $300 million dedicated to adapting certain rail lines to sea-level rise, as well as $1.8 billion for projects in Southern California and $1.5 billion for projects in Northern California. c Includes funding from the State Highway Account. d CalSTA is responsible for awarding funds, but a portion of the funding will be included in Caltrans’ budget to reflect awards to projects on the state highway system. e Includes funding from the Greenhouse Gas Reduction Fund. f Includes funding from the Public Transportation Account. TIRCP = Transit and Intercity Rail Capital Program; CalSTA = California State Transportation Agency; Caltrans = California Department of Transportation; CWDB = California Workforce Development Board; Go-Biz = Governor’s Office of Business and Economic Development; and DMV = Department of Motor Vehicles. More recent fiscal data we summarize in our Moreover, both our office and the administration February publication, The 2024-25 Budget: estimate that based on current revenue forecasts, Deficit Update, indicate the budget outlook the state will face significant operating deficits in continues to worsen—we now estimate the subsequent fiscal years. Under the administration’s state has a $73 billion deficit to address with January projections, even after adopting the the 2024-25 budget. The Governor proposes to Governor’s proposals, the state still would face address the 2024-25 budget problem through a operating deficits of $37 billion in 2025-26, combination of strategies, including relying on $30 billion in 2026-27, and $28 billion in 2027-28. reserves and reducing recent one-time spending Governor’s Proposals commitments. Given that the transportation policy area was one of the largest categories for recent Governor Proposes Several Budget Solutions one-time investments, the Governor targets these in Transportation. The Governor proposes programs for a notable share of spending solutions. various budget solutions that reduce General www.lao.ca.gov 3 2024-25 BUDGET Fund spending on transportation programs by back to the General Fund (resulting in savings a total of $4.3 billion across the budget window during the budget window), with the intention (2022-23 through 2024-25). These solutions all to reappropriate the funds in future years come from recent General Fund augmentations for based on when the administration expects transportation that were provided through budget the money will be needed to cover project agreements over the last three years. However, the expenditures. These cash flow adjustments Governor proposes to restore about $3.3 billion of include (1) $2.1 billion for competitive TIRCP, the postponed and delayed General Fund spending (2) $400 million for ATP, (3) $150 million for in future years, so the net savings across the the Highways to Boulevards Pilot Program, multiyear forecast period totals only $1.1 billion. (4) $100 million for the Port and Freight As shown in Figure 2, the Governor relies on four Infrastructure Program, and (5) $40 million main strategies to provide General Fund relief. for the supply chain workforce campus. Figure 3 provides more detail on the proposed The administering departments have already changes including impacts across fiscal years. committed these funds for specific projects The specific changes include: through grant awards so grantees are in the process of undertaking planning, permitting, • $2.8 Billion in Cash Flow Adjustments. and other pre-construction activities. Figure 3 The Governor proposes $2.8 billion in General displays the administration’s estimates for Fund cash flow adjustments. This strategy when the grantees would actually need would revert funding previously provided the cash on hand to support the awarded Figure 2 Governor's Proposed Transportation Budget Solutions 2021-22 Through 2027-28 (In Billions) Formula-Based TIRCP Competitive TIRCP Port and Freight Infrastructure Program Zero-Emission Transit Capital Program Active Transportation Program Grade Separation Projects within Competitive TIRCP Funding Retained Port of Oakland Improvements Cash Flow Adjustment Local Climate Adaptation Programs Delay Highways to Boulevards Pilot Program Fund Shift to GGRF Supply Chain Workforce Campus Reduction Clean California Local Grant Program Increased Commercial Driver's License Capacity Port Operational Improvements 0.5 1.0 1.5 2.0 2.5 3.0 3.5 $4.0 TIRCP = Transit and Intercity Rail Capital Program and GGRF = Greenhouse Gas Reduction Fund. 4 LEGISLATIVE ANALYST’S OFFICE 2024-25 BUDGET projects (shown as positive values in the chart 2024-25 to 2025-26. Unlike the cash flow reflecting when the state would provide the adjustments, the delayed funding is not tied to funds). Under the proposal, all the postponed specific projects—because these funds were expenditures associated with cash flow planned for the budget year, the California adjustments would continue to be supported State Transportation Agency (CalSTA) has not by the General Fund when they resume in yet received authority to allocate the funds to future years, with the exception of $530 million local agencies. for competitive TIRCP in 2024-25. As we • $791 Million in Fund Shifts. The Governor discuss below, the Governor proposes to fund proposes shifting expenditures totaling that portion with GGRF instead. $791 million from the General Fund to • $1 Billion Delay. The Governor proposes GGRF in 2024-25. These fund shifts include to delay $1 billion in General Fund $261 million planned for formula-based TIRCP spending for formula-based TIRCP from and $530 million for competitive TIRCP. Figure 3 Governor’s Proposed Changes to Transportation Funding General Fund Unless Otherwise Noted (In Millions ) Proposed Changesa 2025-26 New Total Through Amounts Program Department Augmentations 2023-24 2024-25 2027-28 Proposed Transportation Infrastructure Package $9,500 -$2,875 -$420 $3,095 $9,300 Formula-based TIRCP CalSTA $4,000 — -$1,000d $1,000 $4,000b Competitive TIRCP CalSTA 3,650 -$2,125 530b 1,595 3,650b Active Transportation Program Caltrans 1,050c -600 — 400 850c Grade separation projects within CalSTA/Caltrans 350 — — — 350 competitive TIRCP Local climate adaptation Caltrans 200c — — — 200c programs Highways to Boulevards Pilot Caltrans 150 -150 50 100 150 Program Clean California Local Grant Caltrans 100 — — — 100 Program Supply Chain Package $1,380 — -$140 $140 $1,380 Port and Freight Infrastructure CalSTA $1,200c — -$100 $100 $1,200c Program Supply chain workforce campus CWDB 110 — -40 40 110 Port operational improvements Go-Biz 30 — — — 30 Increased commercial driver’s DMV 40 — — — 40 license capacity Other $1,380 -$96 — — $1,284 Zero-Emission Transit Capital CalSTA $1,100b,e — — — $1,100b,e Program Port of Oakland improvements CalSTA 280 -$96 — — 184 Totals $12,260 -$2,971 -$560 $3,235 $11,964 a Positive values reflect new proposed spending in that year due to the resumption of cash-flow adjustments or delays. b Includes funding from the Greenhouse Gas Reduction Fund (GGRF). c Includes funding from the State Highway Account. d Includes a $1 billion delay and a $261 million fund shift from the General Fund to GGRF. e Includes funding from the Public Transportation Account. TIRCP = Transit and Intercity Rail Capital Program; CalSTA = California State Transportation Agency; Caltrans = California Department of Transportation; CWDB = California Workforce Development Board; Go-Biz = Governor’s Office of Business and Economic Development; and DMV = Department of Motor Vehicles. www.lao.ca.gov 5 2024-25 BUDGET (We note that the latter amount is intended funds associated with these cash flow adjustments to cover budget-year costs associated with to specific projects. Once grant awards are the proposed cash flow adjustment for made, grantees reasonably expect that funding is competitive TIRCP. As such, the resulting forthcoming and take steps such as entering into General Fund savings are reflected in the contracts and initiating pre-construction activities. current year as part of the $2.8 billion total Proposed Fund Shift for Competitive TIRCP cited above.) Is Reasonable. The Governor’s proposal to shift • $296 Million in Reductions. The Governor $530 million for this program to GGRF saves proposes reducing $296 million in total General Fund without impacting projects that spending across two programs: $200 million have already been awarded funding through from ATP and $96 million from the funding the program. (This funding would be provided provided for the Port of Oakland (both from in 2024-25 as one portion of the proposed cash the General Fund). flow adjustment delays.) As noted above, the state has limited options to avoid providing this Assessment funding if it does not want to cause significant Below, we provide specific comments related disruptions, given it has already entered into project to each of the Governor’s proposed transportation commitments with the awarded grantees. If the budget solutions. state must fund the projects, doing so with a source other than General Fund makes sense in light of While Multiple Programs Impacted, Most the budget condition. Moreover, we find that the Funding Sustained. The proposed solutions proposed fund shift aligns with the goals of GGRF would affect several programs in various ways. because the projects funded through TIRCP are Overall, however, the Governor’s proposals intended to reduce greenhouse gas emissions. would sustain the vast majority of multiyear transportation funding. Specifically, the Delay for Formula-Based TIRCP Achieves Governor’s budget would sustain $12 billion, or Short-Term Savings but Creates Out-Year Cost 98 percent, of the total augmentations intended for Pressures. As noted, the Governor proposes to transportation programs. delay $1 billion planned for formula-based TIRCP from 2024-25 until 2025-26. This would generate Cash Flow Adjustments Avoid Programmatic General Fund solution in the budget year, while also Impacts but Create Cost Pressures in Future preserving total planned funding for the program Years. The proposed $2.8 billion in cash flow across the multiyear period. However, this proposal adjustments would help alleviate cost pressures would create cost pressures in 2025-26. This is in the near term by reducing General Fund particularly important given that our office and the commitments in 2023-24. If the state reappropriates administration project multiyear operating deficits. the funding by the time the projects need it for Unlike competitive-based TIRCP, these funds have construction, this budget solution should not have not yet been committed for specific projects so any significant programmatic impacts. However, the obligation to ultimately provide the funds is these proposals would create cost pressures for the somewhat less binding. General Fund in future years when this spending resumes, making addressing projected out-year Reductions to ATP and Port of Oakland Are deficits more difficult. Moreover, unlike some other Reasonable Given Budget Problem. While the spending delays the Governor proposes across proposed reductions to these two activities would the budget (including for formula-based TIRCP, as result in fewer projects in future years, they would discussed below), the Legislature would not have not impact any current projects. Specifically, for the flexibility to opt not to resume the expenditures ATP, the proposal would not affect funding that in the future—at least not without causing has already been awarded to projects. Instead, significant fiscal and logistical disruptions for the proposed $200 million reduction would be projects and their local sponsors. This is because, applied to future grant-award cycles. The proposal as noted, the state has already committed the would allow the program to maintain $850 million 6 LEGISLATIVE ANALYST’S OFFICE 2024-25 BUDGET of the original planned multiyear amount and state budget situation, the Legislature will thereby still accomplish a significant number of need to consider whether a one-time projects. Similarly, the Port of Oakland would augmentation for formula-based TIRCP still keep $184 million for projects that are underway. is among its highest priorities. For instance, While the port has identified projects that could be should a different activity represent a higher supported with the remaining $96 million, it has not priority (such as if a worsening budget picture yet obligated the funding, so it could accommodate puts funding for ongoing base programs the reduction with minimal disruption. As such, at risk), the Legislature could opt to shift we find the proposals to be reasonable ways to less than the proposed $261 million GGRF address the General Fund problem. to formula-based TIRCP—or none at all— Additional Solutions May Be Needed if reducing overall support for the program Budget Problem Worsens. The Legislature likely instead. The Legislature could then utilize the will be seeking options for alternative budget freed-up GGRF to support another activity— solutions if it chooses to reject some of the transportation or otherwise—that might face Governor’s proposals. Moreover, in the event that reductions given the General Fund condition. the budget condition worsens (our current revenue As mentioned in the previous bullet, however, projections suggest this is likely), the Legislature such a reduction would impact local transit will need to identify additional solutions in order operations and/or capital projects. (We also to meet its constitutional requirement to pass a note that this approach would not yield balanced budget. We have identified a few options additional savings if the Legislature opts to the Legislature could consider, but none are reduce all the funding for formula-based without trade-offs. TIRCP in 2024-25.) • Shift Funds From Transportation Accounts • Reduce Rather Than Delay $1 Billion to Replace General Fund. The Legislature for Formula-Based TIRCP; Reduce could consider shifting funding for certain Additional $1 Billion. Unlike competitive programs from the General Fund to state TIRCP, formula-based TIRCP is not awarded transportation funds such as SHA or the Road to specific projects. Instead, the funding Maintenance and Rehabilitation Account is provided on a formula basis to regional (RMRA). The Legislature took a similar action agencies. This affords the Legislature more last year, when it shifted $650 million of the flexibility about potentially changing its funding one-time General Fund augmentations for intentions without disrupting projects to which transportation to SHA. This approach could it has already committed. Specifically, it could provide additional opportunities for achieving reconsider providing the $2 billion in General General Fund savings but comes with some Fund originally planned for 2024-25. This limitations and trade-offs to consider. First, could entail reducing rather than delaying the revenues from both accounts are restricted $1 billion the Governor proposes providing in to specific transportation purposes under the 2025-26 instead of 2024-25, and additionally California Constitution, so some limitations reducing the $1 billion the Governor proposes exist regarding which activities they could be to retain in the budget year. (As highlighted redirected to support. Second, fund shifts above and discussed next, the Governor would result in less funding available for other proposes funding $261 million of this activities currently supported by the funds. For retained amount with GGRF.) However, such instance, any redirections from SHA ultimately a reduction would impact the ability of local would result in less funding available for transit agencies to support operations or state highway maintenance and rehabilitation locally planned infrastructure improvements. projects. SHA funds the California Department • Redirect GGRF for Other Activity, Reduce of Transportation’s State Highway Operation Formula-Based TIRCP. Given the changed and Protection Program, which supports www.lao.ca.gov 7 2024-25 BUDGET capital projects that rehabilitate and Recommendations reconstruct the state highway system. In the Approve Cash Flow Adjustments. budget year, the program is estimated to have We recommend the Legislature adopt the $5.2 billion for projects through a combination Governor’s proposed $2.8 billion in cash flow of state and federal funds. The Legislature adjustments as they will help address the General also would want to consider any potential Fund condition without programmatic impacts. fund shifts from SHA within the context of While postponing providing these funds will create the $650 million it shifted last year and the cost pressures in future budget cycles, the state state’s goals for highways. Similar trade-offs has already committed these amounts for specific would apply for any potential redirection projects and, as such, has limited flexibility around from RMRA, which also funds state highway making reductions without creating significant maintenance and rehabilitation projects, along disruptions. The proposed approach can help with providing funds to cities and counties for the General Fund condition in the near term local streets and roads and supporting several but the state will need to prepare to provide the smaller programs. RMRA is projected to have funds in the coming years despite the challenging revenues of $4.9 billion in 2024-25. budget situation. • Use Future Base Funding to Replace Approve Fund Shift for Competitive General Fund Augmentations for TIRCP. We recommend approving the proposed Competitive TIRCP. In addition to the $530 million fund shift from the General Fund to one-time General Fund augmentations GGRF for competitive TIRCP. This shift would help described above, competitive TIRCP receives the state meet its commitment to funding projects an annual base amount of funding from that have already received grant awards while also GGRF and transportation improvement saving General Fund. fee revenues, which is provided through a Approve Proposed General Fund Reductions continuous appropriation. CalSTA currently is for ATP and Port of Oakland. We recommend in the process of starting its 2024 competitive the Legislature adopt the proposed General Fund TIRCP grant cycle, with plans to award about reductions for ATP ($200 million) and the Port $800 million from these base funds this fall of Oakland ($96 million). While these proposals to support new projects over the next five reduce funding for potential projects in the future, years. Instead of selecting new projects to they do not impact support for existing projects. support with these funds, the Legislature In the cases of both activities, a notable amount of could statutorily direct CalSTA to use them funding would be maintained to help accomplish to fulfill the state’s commitments to some key objectives, albeit at a reduced level. Due to of the projects already awarded funds from the budget condition, we find these proposals to the one-time General Fund augmentations be reasonable. to competitive TIRCP. (Because of delays Use Spring Budget Process to Identify in project implementation and the resulting Additional Potential Budget Solutions in cash flow adjustments proposed, the state Transportation. We recommend the Legislature has some flexibility around the timing of when take steps now to identify additional options to provide these funds even though projects for generating General Fund solutions from have already been promised grant awards.) transportation programs. Taking such steps will This action essentially would allow the state help position the Legislature to respond should to sustain funding for local projects to which the budget problem worsen—which we think is it has already committed and reduce General likely—and if the Legislature seeks to modify the Fund expenditures. However, this approach Governor’s proposed approach. Some options the would result in the state supporting fewer Legislature could consider include reducing funding overall transit and rail improvement projects for formula-based TIRCP (reducing General Fund over the coming years. and/or reducing and redirecting GGRF), using other 8 LEGISLATIVE ANALYST’S OFFICE 2024-25 BUDGET transportation special funds to replace some Conclusion one-time General Fund, and replacing General Historically, the General Fund has not been Fund for existing competitive TIRCP commitments a major source of funding for transportation with the program’s base funding that would programs. However, the state provided—and otherwise support future projects. None of these planned to provide—an unprecedented amount options are without trade-offs. Overall, reducing of General Fund augmentations to support General Fund ultimately will mean supporting fewer transportation in recent years. Given the change transportation activities compared to what was in the state’s overall fiscal condition, reducing originally intended in prior budget agreements, this spending correspondingly is both reasonable whether that be for transit and rail projects or and necessary. The Governor proposes to reduce highway maintenance. While this process will be General Fund spending for transportation by challenging, taking the time to consider, research, $4.3 billion during the budget window. However, and select potential options over the spring will through a combination of cash flow adjustments, better prepare the Legislature to make decisions delays, and fund shifts, the actual programmatic in May and June when it will not have much time to reductions are much lower (only $296 million), gather information and carefully consider program as are the net multiyear General Fund savings trade-offs before the budget deadline. ($1.1 billion). The Legislature faces the difficult task of balancing its goals of augmenting support for the state’s transportation system with its responsibility to address the growing state budget problem. www.lao.ca.gov 9 2024-25 BUDGET 10 LEGISLATIVE ANALYST’S OFFICE 2024-25 BUDGET www.lao.ca.gov 11 2024-25 BUDGET LAO PUBLICATIONS This report was prepared by Luke Koushmaro and Frank Jimenez, and reviewed by Rachel Ehlers. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, California 95814. 12 LEGISLATIVE ANALYST’S OFFICE