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Caltrans recommends Department of Finance revenue assumptions for 2026 fund estimate
Summary
Caltrans budget staff presented draft assumptions for the 2026 state transportation improvement program fund estimate and proposed using Department of Finance projections for state fuel excise tax revenues and a modest federal escalation for out‑year federal resources.
Long Beach — Caltrans presented preliminary assumptions for the 2026 State Transportation Improvement Program fund estimate, offering departmental recommendations on the state fuel excise tax forecast and federal resource escalators that will determine available programming capacity through the five‑year estimate window.
Garrett Franklin, Caltrans Division of Budgets, said the department provided multiple alternatives for the state gross excise tax on fuels and for federal resources and is recommending two specific options to the commission: the California Department of Finance forecast for state fuel excise tax receipts and an out‑year federal funding escalator based on the IIJA average annual increase (about 1.8%). Caltrans staff said the Department of Finance projections are preferable because they are California‑specific, updated regularly, and model gasoline and diesel separately.
For federal resources, Franklin presented four alternatives and recommended a conservative escalator that applies the average annual increase from the current federal surface transportation law. He noted the fund estimate period extends beyond the current federal act, creating uncertainty, but said the recommendation offers a defensible baseline for program capacity planning.
Franklin reminded commissioners the fund estimate is not a decision point at this meeting; staff will return in two months with final assumptions for formal adoption. He also noted statutory authority that allows the commission to delay adoption for up to 90 days if legislative or federal changes materially affect revenues.
Why it matters: The fund estimate drives how much programming capacity the commission can legally commit in the STIP and other long‑range programs. The choice of revenue and escalation assumptions materially affects project capacities and allocation timing over a multi‑year horizon.
What’s next: Caltrans will accept input from the commission and stakeholders, present a final assumptions package in May and bring the draft fund estimate to the commission in June, with final adoption expected in August.
