Funds for public transit and pothole repairs across San Diego County will be pinched by a third straight year of declining sales tax revenue, though big North County highway and interstate projects won't be delayed, according to a revised forecast by a local economist.

Revenue from TransNet, a regional half-cent sales tax, will drop another 6.5 percent ---- more than $22 million ---- during the 2009-10 fiscal year compared with the year before, said Marney Cox, chief economist for the San Diego Association of Governments, the region's transportation planning agency.

TransNet funds billions of dollars of transportation projects across the county.

This spring, Cox projected that TransNet revenue would grow 2 percent this fiscal year.

"Apparently, we were wildly optimistic," he told a TransNet oversight board on Wednesday.

The region's steep drop in consumer spending, plus a still-sagging housing market and continued job losses, were blamed for the lower sales tax revenue, Cox said.

Revenue sank 9.2 percent in the 2008-09 fiscal year and 1.4 percent in the 2007-08 fiscal years.

Cox said big North County projects such as the Highway 76 widening and the Interstate 15 Express Lanes will not be delayed because of the revenue drops. The agency raised $600 million through bond sales in 2006 to fund those and other "major corridor" projects across the county. That came two years after voters extended TransNet for 40 years. The sales-tax program was first approved at the ballot in 1988.

Even with the revenue declines, SANDAG has enough money to make its debt payments on the bonds ---- partly because of prior years when sales tax revenue exceeded expectations, Cox said.

The most immediate impact from TransNet declines will be cuts to cities' street improvement and maintenance funds and to transit across the region, Cox said. There will be $2.3 million less this fiscal year sent to cities for "local system improvements," defined by SANDAG as roadway projects and smart-growth incentive programs.

There will be less money for filling in potholes and paving roads, too, Cox said.

TransNet funds for regional rail and bus services for agencies like the North County Transit District probably will take a hit, also, Cox added. Projections show TransNet will have only $16.2 million for rail operations and bus rapid transit projects in fiscal year 2010, which runs from July 2009 to the end of June 2010, compared with $17.4 million the previous fiscal year.

"This certainly is a concern to us ... Every time we hear new (revenue) projections, it gets a little grimmer," said Sarah Benson, spokeswoman for NCTD, which provides bus, commuter train and light rail service across North County.

Benson added that the transit district's board of directors is well aware of the expected TransNet revenue declines. NCTD has cut bus routes, raised transit fares and left numerous personnel positions vacant due to declining regional and state revenues.

John Meyer of Hidden Meadows, a member of the TransNet oversight board, said the silver lining is that construction costs have declined nearly to the point where they offset revenue drops. He added that federal stimulus dollars have helped move some of the region's transportation projects forward.

Call staff writer Chris Nichols at 760-740-5426.