California transportation needs outpace revenues by about $216.5 billion over 10 years, CTC draft finds

The California Transportation Commission(CTC) draft 2025 State and Local Transportation System Needs Assessment released for public comment estimates the 10-year multimodal transportation funding need at about $757.5 billion and a projected 10-year revenue baseline of about $572.0 billion, producing a shortfall of roughly $216.5 billion after accounting for an additional projected decline in fuel-related revenue of about $31.1 billion.

CTC staff member Frances Diaz Sanchez, who presented the draft at the Road Charge Technical Advisory Committee meeting in Fresno on April 18, said, "The total transportation funding needs over the next 10 years are estimated to be approximately $757,500,000,000" and that "the projected statewide 10 year revenue is approximately $572,000,000,000" before noting the possible additional decline in revenue she said could reduce the projection to about $541,000,000,000 and leave a "shortfall of 216 and a half billion, roughly."

The draft, prepared under direction in Senate Bill 1121, provides an inventory of statewide needs (state highways, local streets and roads, transit and rail, climate resiliency and accessible transportation) and proposes "first principles" and a preferred scenario calling for phased implementation of a sustainable funding mechanism to replace the state excise gas tax. The report does not identify a single replacement revenue source; CTC staff said the legislature will decide the mechanism and that options could include a road charge or vehicle registration fees.

Why this matters: The assessment is intended to inform legislative action as California continues a transition to cleaner vehicles and lower fuel consumption. CTC staff told the committee the intent of the draft is to present the high-level funding gap, highlight areas that need further study (tribal transportation needs, accessible transportation beyond ADA services, and climate resiliency), and recommend approaches to address declining fuel tax receipts.

Key details: Frances Diaz Sanchez said the draft reflects input from 11 stakeholder workgroup meetings over 15 months, regional transportation plans, the state highway system management plan and the state rail plan. The report was released for a 30-day public comment period beginning March 3 and ending April 2; staff are now assessing comments for incorporation before the May Commission meeting, when the final report will be presented for adoption and transmittal to the Legislature.

Discussion at the TAC meeting focused on how the needs are presented and whether transit and rail should be separated from roads in public discussion. Commissioner Jim Madaffer asked whether transit and rail categories should be separated from road-specific categories so lawmakers could identify distinct funding solutions. CTC staff and other presenters said the assessment was intentionally comprehensive: it catalogues needs across the entire transportation system and the revenue side covers federal, state and local sources, not only fuel excise taxes.

Several committee members and public commenters raised the importance of privacy and implementation design if the legislature moves toward road charges as one replacement option. Electronic Frontier Foundation representative Lee Tian urged officials to explicitly consider privacy and security when designing any mileage-based mechanism. CTC staff and others said program design choices (for example, offering low-data reporting options) are available to protect privacy and that the draft recommends further study of accessible and tribal transportation needs.

What the draft recommends: 1) adopt the report's first principles as a framework for decisions about long-term funding; 2) pursue a phased, sustainable replacement for the gas tax to stop the erosion of fuel-based revenues; and 3) commission additional studies on tribal needs, accessible transportation, and climate resiliency funding. The staff presentation explicitly noted legislative action would be required to implement any particular revenue mechanism.

Limits and next steps: Staff cautioned the draft is a high-level assessment; several commenters at the meeting observed it may undercount local needs and asked for more granular regional data. CTC staff said the final report to the Commission in May will incorporate public comments where feasible. The report also recommended the legislature identify ongoing funding for climate resiliency once State and Federal emergency funds are exhausted.

Ending note: The CTC will present the final 2025 needs assessment for adoption at its May meeting and then transmit the report to the state legislature for consideration of the recommendations.