California lawmakers hear warnings that gasoline-based funding for roads is eroding and costly choices lie ahead

The joint informational hearing of the Assembly Transportation Committee and Senate members examined how California’s reliance on fuel excise taxes and vehicle fees is producing a shrinking revenue base for road and transit work as vehicle fuel efficiency rises and zero‑emission vehicles spread.

Chair Wilson, chair of the Assembly Transportation Committee, opened the hearing by framing the problem: “State and local transportation funding currently relies heavily on revenues from fuel taxes and other fees on gas powered vehicles,” she said, adding that as efficiency improves and zero‑emission vehicles enter the fleet, “these revenues are declining.”

Why it matters: transportation funding underpins road repairs, bridge work, transit operations and climate‑related projects statewide. Panelists and agency officials warned that, absent new revenue measures, California risks fewer projects, slower maintenance and growing backlogs that could reverse recent progress achieved since the passage of Senate Bill 1 (SB1).

The Legislative Analyst’s Office provided a state funding overview. Frank Jimenez of the LAO summarized revenue sources and amounts, and said the state’s package of fuel taxes and vehicle fees was expected to generate about $14.4 billion in 2024–25. “The gas excise tax makes up roughly $7,900,000,000,” he said, and identified the transportation improvement fee and the road improvement fee as other major items in the state’s revenue portfolio.

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