California lawmakers warned of looming transportation funding shortfall as fuel-tax revenues fall

At a joint informational hearing of the Assembly transportation committee, analysts and transportation officials said California faces a substantial, multiyear shortfall in funding for roads, bridges and transit because revenues tied to burning fuel are falling as vehicles become more fuel efficient and zero‑emission vehicles (ZEVs) increase in the fleet.

The hearing, convened by committee leadership, included presentations from Frank Jimenez of the Legislative Analyst’s Office (LAO); Brian D. Taylor, professor at the UCLA Institute of Transportation Studies; Asha Weinstein Agrawal of the Mineta Transportation Institute; Tanisha Taylor, executive director of the California Transportation Commission (CTC); and regional representatives including James Corless of the Sacramento Area Council of Governments (SACOG).

Why it matters: transportation funding supports state highways, local streets and roads, and transit systems. Several witnesses said the current package of fuel taxes and vehicle fees—augmented after Senate Bill 1 (SB 1) in 2017—is eroding because it ties revenue to gallons of fuel sold. A shift toward ZEVs and greater vehicle fuel efficiency reduces the fuel tax base and, absent new revenue, will mean less money for core maintenance and safety programs.

What the witnesses said

Frank Jimenez, legislative analyst, summarized how California finances transportation: federal, state and local sources together funded roughly $44 billion in 2023; state fuel taxes and vehicle fees were estimated to generate about $14.4 billion in 2024–25.…