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CTC, Caltrans brief commissioners on state budget outlook and 2026 fund‑estimate process amid federal uncertainty
Summary
Commission staff and Caltrans updated the commission on the governor’s 2025-26 budget (no direct cuts to transportation general‑fund programs), the upcoming 2026 State Transportation Improvement Program fund‑estimate process, and uncertainty around recent federal directives that temporarily paused disbursements for some federal programs.
Commission staff and Caltrans briefed the California Transportation Commission on Jan. 30 about the state budget outlook, federal developments affecting transportation funding and the schedule for the 2026 State Transportation Improvement Program (STIP) fund estimate.
CalSTA Secretary Toks Omishakin and Caltrans budget staff reported that Governor Gavin Newsom’s proposed 2025‑26 budget, released Jan. 10, does not include cuts to core transportation funding. The proposed budget keeps several major program lines intact, including billions for transit and rail, Proposition 1A high‑speed rail funds and substantial amounts for active transportation, zero‑emission transit capital, and corridor/safety projects.
At the federal level, commission staff reported the Biden administration issued orders in January temporarily pausing disbursement of certain funds from the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act while agencies review compliance with new directives. Commission and Caltrans staff said state formula programs that fund many California projects are not, as of the Jan. 30 briefing, subject to the pause; however, uncertainty remains for some discretionary federal programs until implementing guidance is issued by U.S. DOT and other agencies.
Commission and Caltrans budget staff outlined the fund‑estimate timeline required by statute. The department will present draft assumptions in March, formal assumptions in June, draft tables by mid‑July and a proposed fund estimate for adoption in August. The fund estimate projects revenue and program capacity for the next five fiscal years (2026–27 through 2030–31). Staff warned the commission that federal changes or new guidance could require contingency scenarios and that the department will present alternative assumptions where appropriate.
Caltrans also provided an allocations update: through December the commission had allocated $3.3 billion to 319 projects across programs in the fiscal year, leaving roughly $9 billion of the plan’s available funds yet to be allocated for the cycle. Staff said they will continue working with federal and state partners to update estimates and that the March fund‑estimate assumptions will reflect the state of federal guidance at that time.
Commission staff said they will solicit public comment on a draft proposal for implementing Assembly Bill 744 (the transportation data platform directive) and plan to deliver a final proposal to the Legislature by the July 1, 2025 statutory deadline.
