Assembly subcommittee reviews transportation budget; high‑speed rail and motor vehicle account transfers draw scrutiny

California’s transportation leadership on Tuesday defended the governor’s 2025–26 transportation budget as Assembly members pressed officials about the state’s high‑speed rail project and an ongoing shortfall in the Motor Vehicle Account.

Transportation Secretary Toks Omishakin presented the outline of the governor’s transportation spending package and said the administration framed investments around “safety, equity, climate action, and economic prosperity.” She told the committee the proposal “maintains the entirety of the transportation package included in recent budgets.”

The package Secretary Omishakin described includes $15.4 billion in state funding for transportation priorities. She itemized the largest elements as $7.7 billion for transit and rail infrastructure, $4.2 billion for the High‑Speed Rail Authority to continue construction in the Central Valley, $1.2 billion for goods‑movement projects, $1.1 billion for active transportation projects and climate adaptation, $1.1 billion for zero‑emission transit capital, and $150 million for grade separations.

The hearing pivoted quickly from the budget totals to two flashpoints: the future of the California High‑Speed Rail project and a budgetary plan to move fund balances into the Motor Vehicle Account (MVA).

Vice Chair (unnamed in the transcript) criticized the high‑speed rail project, saying the state had spent about $13 billion and remained “about $6½ billion short” for the first segment, and that the line had completed roughly 22 miles of guideway but “no track has been laid.” Secretary Omishakin and other administration witnesses disputed a characteristically bleak reading, noting the project’s employment impacts and milestones. Omishakin said the project had created jobs in the Central Valley and noted progress on structures: “There are 100 structures, viaducts, bridges, etcetera, that are needed on this project. 150 of them are now completed,” she said, adding that the environmental process for much of the route is nearly complete.

The subcommittee also heard a data‑driven briefing about the MVA shortfall from Bowen Peterson of the Department of Finance. Peterson said the MVA’s projected revenue for 2025–26 is about $5.0 billion while expenditures are expected to be about $5.2 billion, producing an operational shortfall. He identified the MVA’s main revenue sources as a $71 vehicle registration fee and a $32 CHP fee and said recent revenue came in about $103 million below expectations because of lower new‑car sales and registration renewals.

To address the shortfall, Secretary Omishakin and Department of Finance officials described a proposed one‑time transfer of roughly $166 million into the MVA: $85 million from the Air Pollution Control Fund and $81 million from the Greenhouse Gas Reduction Fund (GGRF), with other administration representatives noting use of available fund balances and Proposition 4 backfills to make the transfers. Department of Finance spokesman Matt Olmi said the proposal would “offset the state air resources board’s mobility source program expenditures” by moving money to the motor vehicle account.

Legislative Analyst’s Office staff framed the fiscal picture as less dramatic than in prior budget cycles but flagged the operational shortfall in the MVA as a structural issue the Legislature needs to resolve. LAO analyst Rachel Ehlers told members that the governor’s transportation budget “doesn’t have too many big headlines this year” compared with recent years but emphasized that any proposed one‑time transfers will not fix a continuing gap between MVA expenditures and revenues.

Assembly members pressed for further detail on where committed multi‑year transportation funds are already directed. The LAO and administration witnesses said much of the out‑year financing has been committed through competitive awards and project contracts, reducing flexibility to reallocate those dollars without disrupting locally led projects.

The subcommittee deferred many technical follow‑ups to subsequent weekly hearings on program‑level details, including specific project lists, and asked the administration to supply the list of projects that have already received awards.

The panel also discussed smaller, but politically sensitive, elements of the budget. Secretary Omishakin described two general fund requests included in the transportation package: $25 million to expand the Clean California program with a community cleanup and employment pathways grants component, and $5 million ongoing for the California Highway Patrol to expand its computer crimes investigations unit. Omishakin later said the original Clean California appropriation had led to 3 million cubic yards of litter removed and “11,000 jobs” created.

No formal votes were taken in the hearing; members scheduled follow‑up sessions with agency staff to examine specific projects, the MVA long‑term outlook, and the administration’s rationale for the proposed fund transfers.

Ending: The committee left the transportation presentation and planned a series of focused hearings over coming weeks to review specific projects, to obtain lists of committed awards, and to press agencies for updated revenue and expenditure projections that could affect both the May Revision and the committee’s recommendations.