Gas-tax revenue shortfall prompts California panel to cut, delay transportation projects

The California Transportation Commission (CTC) recently adopted a five-year transportation funding plan that cuts $754 million and delays another $755 million in transportation project spending to address a $1.5 billion shortfall in gas tax revenue.

The cuts and delays reflect the largest funding reduction since the current state transportation funding structure was adopted 20 years ago, CTC officials said in a press release.

The changes are reflected in the State Transportation Improvement Program (STIP), which is adopted biannually by the CTC. The STIP is a key planning document for funding future state highway, intercity rail, transit and pedestrian improvements throughout California, CTC officials said.
 
The STIP's primary funding source as established by the state legislature is the price-based excise tax paid by drivers at the gas pump. The cuts in revenue occurred over the past two years due to lower gasoline prices.

The $755 million in delays include rail, highway, transit, bicycle and pedestrian improvement projects.

As required by law, the CTC estimates the amount of funds projected to be available over the five-year STIP period. The excise tax in 2010 was set at 17.3 cents per gallon and is adjusted annually by the State Board of Equalization based on fuel prices. On July 1, the tax will be reduced to 9.8 cents from the current 12 cents.

Based on that reduction, the CTC anticipates a $1.5 billion funding shortfall for project commitments previously made for fiscal years 2016-17 through 2018-19, leading to the project funding cuts and delays, CTC officials said.

"It's highly unfortunate that we had to take this action," said CTC Chair Bob Alvarado. "This means that desperately needed transportation projects throughout California won’t happen at all or will be significantly delayed."