DALLAS -- The California Transportation Commission slashed $754 million of road and transit projects from the state's five-year infrastructure plan and delayed another $755 million of planned work because of a decrease in gasoline tax revenues stemming from falling fuel prices.
The cuts and delays in the State Transportation Improvement Program (STIP) made by the commission on May 18 was the largest funding reduction since the current state transportation funding structure was adopted during a state budget crisis 20 years ago.
The commission made the cuts because it expects a $1.5 billion funding shortfall for project commitments previously made for fiscal 2016 through 2019 as a result of the drop off in gasoline tax collections, said commission chairman Bob Alvarado.
"This means that desperately needed transportation projects throughout California won't happen at all or will be significantly delayed," he said. "Because transportation projects typically are funded from multiple sources, the total statewide economic impact of the funding cuts and delays likely will run into the billions," said Alvarado.
Most of the funding for STIP projects comes from the price-based fuel excise tax that is paid at the pump. The road plan is revised every two years by the commission.
The price-based portion of California's gasoline tax will drop to 9.8 cents per gallon in July as a result of fuel price declines over the past 12 months. The levy is down from 12 cents per gallon in fiscal 2016 and 17 cents per gallon in fiscal 2010.
Each 1 cent in the gasoline tax revenue funds about $140 million of state and local road projects per year, the transportation commission said.
California's state gasoline tax is expected to bring in $4.5 billion in fiscal 2016, a drop of 16% from 2015 collections and 21% less than in 2014. State officials expect fuel tax revenues to drop another 6.5% in fiscal 2017.
The drop in gas tax collection cripples the state's ability to leverage matching federal funds and increases the costs down the road on the deferred projects, Alvarado said.
"All Californians are paying a big price for the woefully inadequate investment in our transportation infrastructure," Alvarado said. "In light of the urgency and scale of the problem, we need the Legislature and governor to agree on a solution quickly."
A stable, consistent gasoline tax rate would avoid the type of deep cuts made to the transportation plan, Alvarado said during a rally Thursday in Sacramento calling on legislators to resolve the state's road revenue shortfall.
"So if we can now create a proposal in the middle, so that the Democrats don't have all they want, Republicans don't have all they want," he said. "It's called compromise. Let's get it done."
The California Department of Transportation said last year that there is a $57 billion backlog of deferred maintenance needs on the state's roads and bridges.
California motorists currently pay 40.4 cents per gallon in state fuel taxes, including a 30 cent gasoline tax that includes price-based and volume-based components.
California had the most expensive gasoline in the U.S. last week at an average of $2.80 per gallon of unleaded regular, although that is down $1.02 per gallon from last May, the AAA said. Hawaii is next highest at $2.67 per gallon.
The national average price for a gallon of gasoline last week was $2.22, up 11 cents from April but 48 cents less than in May 2015, according to AAA.
The AAA's survey found the cheapest gas prices in Texas and Arkansas at $1.99 per gallon, followed by Louisiana, Mississippi, and Oklahoma at $2.00 per gallon.
