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Caltrans outlines 2014 fund estimate process; excise-tax increase could close a large portion of the shortfall
Summary
Caltrans and CTC staff outlined the fund-estimate timetable and cash-flow constraints for the State Highway Account and federal funds, and staff analysis showed that a hypothetical 67¢-per-gallon excise tax increase would generate state revenues that could largely close the department’s projected funding shortfall for SHOP priorities.
Caltrans staff presented an overview of the 2014 fund estimate process, the department’s cash-flow methodology, and the agency’s constraints for programming state and federal highway and transit funds over the next five years.
Stephen Keck of Caltrans budgets told the commission the fund estimate is a statutorily required five‑year forecast that underpins the State Transportation Improvement Program (STIP) and the State Highway Operation and Protection Program (SHOPP). He outlined a cash‑flow model that shows a large share of Caltrans spending in any year is consumption of prior-year project allocations: “61 cents out of every dollar that we spend at Caltrans is spent towards a project that is already ongoing,” he said, meaning only a small fraction is typically available to start new projects.
Caltrans staff said statutory priorities — administration, maintenance, SHOPP, local assistance, then STIP — constrain how new funds can be applied. The department plans to present draft assumptions in March, take commission feedback, and bring final recommended assumptions in May so a draft fund estimate can be circulated in June and the commission can adopt the estimate in August, before submitting STIP materials to the legislature the following April.
Mitch Weiss (CTC staff) and others flagged timing pressure: the commission’s meeting schedule means Caltrans will need to prepare the draft fund estimate earlier than usual and the commission asked staff to make the June draft available before the meeting to allow review time.
Separately, staff presented historical context for motor‑fuel excise taxes. Mitch Weiss showed the combined state and federal excise tax has not increased in nominal terms since 1994 (aside from a 2010 swap) and that the tax’s purchasing power has fallen. The presentation computed that restoring the tax to a historical share of pump price would require roughly a 67¢-per‑gallon excise increase; using a $3.09 pump price as an example, Weiss estimated that a 67¢ increase would generate roughly $10 billion in total revenue and about $6.2 billion in state-level share — an amount staff said would be enough to cover a substantial portion of the SHOPP funding gap identified in the needs analysis.
Commissioners and regional representatives pressed staff on support-cost ratios, escalation assumptions, and the practical challenge of funding program support (planning, design, right-of-way) in a constrained revenue environment. Commissioners asked Caltrans to clarify how support costs were calculated and to present a single set of numbers with clear escalation assumptions. Several commissioners and regional officials urged more outreach to help voters distinguish fuel-tax increases from pump-price changes and to prepare a policy path to future road-usage revenues, including pilots elsewhere such as Oregon’s mileage-based study.
Caltrans and CTC staff said they will circulate draft assumptions in March and asked commissioners to provide written comments; staff committed to making the June draft fund estimate available in advance of the commission meeting when feasible.
