California Transportation Commission: $217 billion shortfall projected over next decade

The California Transportation Commission told the Senate Transportation Committee on the record that state and local transportation needs for the next 10 years total nearly $758 billion while available revenues total roughly $541 billion, creating an estimated shortfall of about $217 billion.

"The draft needs assessment ... projects 10 year needs of nearly $758,000,000,000 and available revenues of approximately $541,000,000,000 from federal state and local sources," Tanisha Taylor, executive director of the California Transportation Commission, told the committee. "This creates an anticipated shortfall of about $217,000,000,000 over 10 years."

Why it matters: the gap affects investment in state highways, local streets and roads, transit and intercity rail, active transportation, climate adaptation and infrastructure needed for zero‑emission freight. Taylor said the projection already accounts for an anticipated decline in gas tax revenue caused by reduced gasoline and diesel consumption and increasing vehicle fuel efficiency.

Taylor described how the commission programs about $8 billion a year for state and local transportation projects through a mix of federal formula funds and state revenue (fuel taxes and the Vehicle License Fee adjustments enacted by prior legislation). She reviewed major programs the commission administers: the State Highway Operation and Protection Program (SHOP), which the commission manages in multi‑year cycles (last year’s SHOP included about $21.2 billion for a 4‑year program); the Local Streets and Roads program (about $1.2 billion annually); and the State Transportation Improvement Program (STIP), which covered roughly $2.9 billion in the most recent five‑year program.

Taylor warned the committee that the revenue outlook is changing as Californians buy less gasoline and diesel and as cleaner vehicles reduce per‑mile fuel tax receipts. While SB 1 indexed the per‑gallon excise tax to inflation, she said the indexation cannot fully offset the long‑term decline in fuel consumption. Taylor told members that meeting California’s climate and mobility goals while providing a stable funding base will require a combination of local, state and federal solutions.

Context and next steps: Taylor said the commission’s annual report documents program outcomes and that the commission will continue to advise the Legislature and the administration on funding priorities. Committee members asked for regular updates about federal funding developments and encouraged the commission to provide timely notices when federal program guidance or awards change, given the potential need for state backfill.

Ending: The commission’s projections place a large budgetary choice before the Legislature and local governments: maintain existing programs with reduced scope, redirect priorities, or identify new revenues and partnerships to close a multibillion‑dollar gap over the coming decade.