The Transportation Development Act provides for two sources of funding: Local Transportation Funds and State Transit Assistance. The program was established for the purpose of providing funding for public transit in California. These funds are considered local funds and are used for public transit operations and capital upgrades. Transportation Development Act funds are derived from a ¼ cent general sales tax collected by the State and returned to Monterey County. Annual apportionments average around $12,000,000.

Local Transportation Funds can be used for the following purposes: planning, pedestrian and bicycle facilities, rail passenger service, public transit, special group transportation service, local streets and roads, and administration. In Monterey County, all Local Transportation Funds are allocated to Monterey-Salinas Transit.