The California Transportation Commission’s latest needs assessment is here. Here’s what it says and what happens next.
By Arianna Smith
Managing Editor
Transit California
With so many public transit funding streams at imminent risk of reductions and cuts, it’s more important than ever before to evaluate how California can make transportation funding needs whole. A recently released long-term needs assessment is providing new context and information for transit system operators and policymakers.
In May 2025, the California Transportation Commission (CTC) released the final 2025 State and Local Transportation System Full Needs Assessment. Following an extensive stakeholder workshop process in which California Transit Association members participated, the CTC announced in the assessment the approximate anticipated costs ($757 billion), revenues ($541 billion), and funding shortfall ($216 billion) for California’s transportation needs for the next ten years.
The assessment also identified a variety of principles, priorities, and recommendations for current and future policymakers to meet – and pay for – Californians’ transportation needs over the coming decade.
According to the assessment, “the goal of the 2025 State and Local Transportation System Needs Assessment is to identify California’s transportation needs, the revenue available to cover those needs, and to analyze the difference between our needs and available revenue through the year 2035. California's transportation goals require not only building on the state's historical investments in transportation infrastructure—such as freeways, roads, active transportation, bridges, culverts, intercity and passenger rail, and public transit systems—but also making future investments to ensure continued progress.”
Why now, and why this assessment?
State agencies have previously conducted one-off transportation needs assessments, but none have been comprehensive or ongoing. The most recent was performed in 2011; the one before that was published in 1999.
Following the pandemic shutdown, record-breaking wildfires, climate-related disasters, and the ever-increasing pressures on the housing market – all of which notably impacted California’s transportation systems – the state acknowledged the need for a new long-term planning tool. The Legislature passed, and the Governor signed into law, a requirement for a transportation needs assessment to be conducted every five years.
According to Senator Lena Gonzalez, the author of the bipartisan-supported 2022 law that authorized the assessments, “California’s transportation system, which includes roads, highways, transit, and bike and pedestrian facilities, is an essential part of our economic and societal infrastructure. Yet policymakers lack a comprehensive picture on the transportation funding needs, for both state and local facilities, and how those needs will be met… …With this information, policymakers, stakeholders and advocates can do a better job of planning for our future to create the transportation system that meets our needs.”
At the time of its passage, policymakers were at the early stage of grappling with a variety of transportation funding disruptions, cuts, and uncertainties related to the pandemic, as well as some opportunities, such as the 2021 passage of the federal Bipartisan Infrastructure Law.
The CTC was an obvious choice for organizing and preparing the 10-year assessment, since it is tasked with programming, allocating construction funds, and improvements to the state’s highway, passenger rail, transit and active transportation systems. It also advises the Legislature in evaluating state transportation policies and programs.
A support letter from the sponsor of the measure, Transportation California, stated of the measure while it went through the legislative process in 2022, “[Our] industry views this forward thinking about Californian’s transportation system needs… …as critical to setting the stage to meet our state’s future. We also strongly support the requirement for the commission to forecast anticipated revenues that would be available to meet the identified needs of the system and the means to address any shortfalls if identified.”
The 2025 Needs Assessment and the Transit Transformation Task Force
Some of the CTC’s needs assessment findings intersect with those of the Transit Transformation Task Force (TTTF). Whereas the 2025 needs assessment encompasses the needs of all forms of transportation across the state, TTTF focuses largely on the long-term needs of the state’s transit system infrastructure and operations.
TTTF is led by the California State Transportation Agency (CalSTA) and guided by 25 appointed members, 12 of whom represent Association member agencies. As required by the 2023 legislation that created the task force, TTTF is expected to issue its final report this fall.
The Association’s TTTF representatives, as well as the Association’s internal TTTF coordinating committee, have worked strategically and consistently to communicate Association member agency needs and priorities to CalSTA leadership.
Since one of the CTC’s formal responsibilities is to assist the CalSTA Secretary in formulating transportation policies and plans, there was some potential for the CTC-led needs assessment and the CalSTA-led TTTF to directly complement one another. And initially, there was a push amongst stakeholders in the TTTF discussions to draw upon the needs assessment as a way of establishing a base to build solutions around identified needs. Unfortunately, that attempted coordination did not come together. Nevertheless, the findings and recommendations in both reports are likely to provide useful components to bolster funding advocacy campaigns by Association membership.
High level assessment findings and recommendations
The assessment identified numerous new cost drivers beyond everyday operations for California’s transportation systems in the coming decade. These include addressing deferred maintenance, transitioning fossil-fuel systems to zero emissions vehicles, and adding new system features that meet equity and accessibility priorities. The document particularly noted the costs associated with the increase in intensity and frequency of climate caused emergencies, such as wildfires, flooding, heat, and coastal erosion, which will continue to destroy infrastructure and require transit systems to meet evacuation needs. The CTC estimated that the total funding needs over the next 10 years will be $756.8 billion.
Meanwhile, the CTC projects that the statewide 10-year revenue is approximately $572 billion from local, state, federal, and transit sources. Additionally, transportation systems will face revenue losses as the result of a decline in state fuel tax revenues, which is estimated to result in a further loss of up to $31 billion. Therefore, the projected 10-year revenue shortfall is approximately $215.7 billion.
Ultimately, the assessment recommends that the Legislature take action to replace the state fuel excise tax with, “a sustainable revenue mechanism” that is indexed with inflation and phased-in over a period of time.” The assessment identified several potential changes to taxes and fees, but it did not recommend any one specific funding mechanism; when the draft report was released for its 30-day public comment period, several commenters suggested identifying a specific funding mechanism.
The assessment also recommends that the Legislature study the topics of tribal transportation needs, accessible transportation needs, and climate resiliency transportation needs.
Ultimately, the assessment concludes, “The replacement of the state fuel tax with a more sustainable funding source, coupled with efficient transportation and housing accountability that result in infrastructure cost-savings, will allow the state to deliver a safer, more equitable, cleaner transportation system that supports economic growth while continuing to invest in the ongoing transportation maintenance needs at the state and local level.” In other words, the replacement of these revenues will come both from raising new funding sources and building housing and transit in cheaper, more “location-efficient” ways.