California slashes $754 million from transportation ; DOT says impact of job delays, cuts could be billions

Updated Jan 26, 2016

California welcome signCalifornia will have significantly less money to spend on transportation over the next five years following the California Transportation Commission’s decision to slash the Department of Transportation’s budget.

According to Caltrans, the commission decided to cut the budget by $754 million over the next five years after a review of the current and projected financial situation. It’s the biggest cut in the transportation budget since the current funding model went into place almost 20 years ago.

“What this means is that almost every county in California that relies on this source of funding for projects that improve traffic and air quality will have to cut or delay projects indefinitely,” California Transportation Commission Chairwoman Lucy Dunn. “The commission adopted the most optimistic scenario we could make in good conscience, in the hope agreement will be reached on a number of reforms and new funding increases currently under consideration by the Legislature. But failing that, I fear we will be faced with even more Draconian cuts next year.”

Just like DOTs across the rest of the country, Caltrans is attempting to figure out how to make up for fuel tax collections being less and less viable as a primary funding source as electric and other fuel efficient cars become more prevalent.

The state has seen the price-based portion of the gas tax fall to 12 cents per gallon last year and it’s expected to fall another 2 cents this year. Caltrans said $140 million is slashed from the annual transportation budget with every penny that the gas tax revenue falls.

Though the cut itself is amounts to $754 million, Caltrans said the impact will be in the billions. And aside from making sure the highways and bridges are in good condition, the cuts will mean thousands of jobs won’t exist—13,000 jobs are created with every $1 billion spent on transportation funding.

Caltrans says the cut illustrate’s the state’s need to find a new method for funding transportation projects, or at least an alternative funding source to supplement the gas tax.