ARB Freezes Lower-Emission School Bus Program Due to State Fiscal Crisis

8 January 2009

The California Air Resources Board has been instructed to freeze all new disbursements of Proposition 1B funds that support the Lower-Emission School Bus Program and to grant a suspension of pending deadlines for the program.

The California Treasurer’s Office has been unable to access the bond market to generate funds for General Obligation bond programs such as the Lower-Emission School Bus Program. As a result, until there is a resolution to the budget, and a restoration of the State’s ability to access the bond market, all State agencies and departments have been instructed to cease entering into new grants or agreements that commit the expenditure of General Obligation bond funds and to freeze disbursements on existing grants.

Additional disbursements of Program funds will not be issued until such time as the State Treasurer’s Office has access to the bond market and therefore Program staff have the ability to reestablish the Program disbursement process.

California has an estimated $41.5 billion budget gap through the end of the next fiscal year in June 2010. The state could run out of cash in the coming weeks unless the Governor and Legislature can come to agreement on a budget package.