v
California’s Looming Transportation Funding Crisis:
Achieving Sustainable Funding
Presented to the Town of Apple Valley
July 14, 2026
TC July 14, 2026 Presentation
Needs
Assessment
Overview
Senate Bill 1121 (Gonzalez, 2022) • Requires Commission to prepare a 10-year statewide transportation Needs
Assessment and update every 5 years
• Assess costs to operate, maintain, and
grow the statewide multimodal system
• Consider costs to address climate
resiliency
• Compare costs against available
transportation revenues
• Provide recommendations to address any
revenue shortfall
Information provided by the California Transportation Commission TC July 14, 2026 Presentation
2025 to 2035 Statewide Needs
and Revenue Summary
Information provided by the California Transportation Commission TC July 14, 2026 Presentation
Findings
Estimated Impact
of Declining Fuel
Consumption
$31.1 billion
Needs
$756.8 billion
Revenue
$572 billion
Shortfall
$215.7 billion
Information provided by the California Transportation Commission TC July 14, 2026 Presentation
TC July 14, 2026 Presentation
Future of
Transportation
Funding:
Literature Review
TC July 14, 2026 Presentation
Transportation California | Phase 1 Deliverable
Principles of a Good Tax
Key Findings
EFFICIENT
SIMPLE ROBUST
SECURE INTEGRATED
FAIR & EQUITABLE SUSTAINABLE REVENUE
Transportation California | Phase 1 Deliverable
Essential Considerations & Components
Overview
7 Principles
20 Evaluation
Criteria
40 Research
Questions
TC July 14, 2026 Presentation
CRITERION VOLUMETRIC FUEL TAX VALUEMETRIC FUEL SALES TAX KILOWATT-HOUR TAXES FIXED ACCESS (Registration) CHARGES BY PERIOD OF TIME CHARGES BY DISTANCE CHARGES WITHIN AREA CHARGES Know what is owed ✓ ~ ~ ✓ ✓ ✓ ✓
Know how to pay ✓ ~ ~ ✓ ✓ ~ ✓
No false positives ~ ~ ✓ ~ ✕ ~ ✓
No false negatives ✓ ~ ✕ ✓ ✓ ~ ~ Hard to avoid/evade ~ ✕ ✕ ✓ ✓ ~ ~ Enforceable ~ ✕ ✕ ✓ ✓ ~ ~ Transparent ~ ~ ✕ ✕ ~ ~ ~ Just ~ ✓ ~ ✓ ✕ ✓ ✓ Vertical equity ✕ ✕ ✕ ~ ✕ ~ ~ Horizontal equity ✕ ✕ ✕ ✕ ✕ ✓ ~ Equivalent exchange ~ ✕ ✓ ✓ ~ ~ ~ Low administration cost ~ ✓ ~ ✓ ✓ ✓ ~ Low compliance cost ~ ~ ~ ✓ ✓ ~ ~ Good revenue ✓ ✓ ~ ✓ ✓ ✓ ~ Supports choice ✕ ✕ ✓ ✕ ✕ ✓ ✓ Reduces externalities ✕ ✕ ~ ✕ ✕ ~ ~ Enduring revenue ✓ ✓ ✓ ✓ ✓ ✓ ✓ Enduring instrumentality ✓ ✓ ✓ ✓ ✓ ✓ ~ Privacy respecting ✓ ✓ ✓ ✓ ✓ ✓ ✓ Safe-guarded ✓ ✓ ✓ ✓ ✓ ✓ ✓
Complementary ✓ ✓ ✕ ✕ ~ ✓ ✓
Inter-operable ✓ ✓ ~ ✓ ✓ ~ ✓
SUSTAINABLE
REVENUE
SECURE
INTEGRATEDPRINCIPLES
SIMPLE
ROBUST
EQUITABLE &
FAIR
EFFICIENT
Caution is advised when
interpreting this table. For
example, while a tool may
generate sustainable
revenue on its own, it may
not be sufficient to fully
replace fuel tax revenue.
The most effective
approach forward may be
a combination of tools.
Summary of
Results
TC July 14, 2026 Presentation
Literature Review
Options &
Recommendation
• Option One: Mixed Array of Fuel Taxes
• Keep fuel taxes and implement new
fuel tax for electricity and hydrogen.
• Option Two: Pure RUC Model
• Eliminate fuel excise tax and
implement distance-based charging
for all vehicles.
• Option Three: Mixed Model
• Phase in RUC over time, starting
with ZEVs. Keep fuel tax and
registration charge for ICE; consider
removing ZEV specific registration
fees to maintain incentives.
TC July 14, 2026 Presentation
kWh Charge:
Key Takeaways
EV Charging Tax Overview
WHAT IT IS
• A per-kWh charge on electricity used to charge EVs — the electric equivalent of the gas tax
• 3 approaches: flat rate at pump, % of transaction value, or monthly tax declaration
STRENGTHS
• Simple, intuitive, and quick to implement at public chargers • No vehicle tracking or new personal data collection required • Captures revenue from out-of-state vehicles at public chargers
KEY CHALLENGES
• Home charging gap: no state yet taxes home kWh —
compliance essentially voluntary
• Regressive by design: energy use is a proxy for road use, not actual miles traveled
• Revenue declines as vehicle efficiency improves — same structural flaw as the gas tax
BOTTOM LINE
• Viable as a near-term transition tool; universal coverage requires major new infrastructure and data systems
• If in-vehicle data is available for kWh, odometer data is too — making distance-based charges the fairer long-term solution 7 states
charge kWh
at public
chargers
70-80%
of EV charging
happens at home
(currently
untaxed)
TC July 14, 2026 Presentation
Fair Transportation
Funding Coalition
TC July 14, 2026 Presentation
Get Involved!
• 33 coalition members representing
business, labor, local government,
ag, ethnic chambers of commerce.
• Prioritizing regional business
organizations, community-based
organizations and other voices to
widen breadth of coalition support.
TC July 14, 2026 Presentation
Thank You
TC July 14, 2026 Presentation