Why Lower Oil Prices Are Hurting California’s Transportation Projects

A customer prepares to pump gas into his truck at a Valero gas station in Mill Valley.

A customer prepares to pump gas into his truck at a Valero gas station in Mill Valley. (Justin Sullivan/Getty Images)

Falling gas prices are helping drivers — but they’re hurting transportation projects across the state.

The average price of a gallon of gas in California is now $2.66. That’s cutting into gas tax revenues, the main source of funds for the state’s highways, bridges and public transit projects.

Declining gas tax revenues mean the State Transportation Commission will have to cut more than $750 million in funding over the next five years. Projects across California could be delayed or abandoned.

State Sen. Jim Beall from San Jose chairs the Senate Transportation Committee. He says projects across the state that have already been approved could see their money disappear.

“I’m concerned about the BART to San Jose project,” he says. “I’m concerned about other financing of a multitude of transit projects, highway projects that have been on that list.”

Beall, a Democrat, says delays on transportation projects could end up costing California billions of dollars.

Still, there may be a political silver lining: Beall hopes the cuts put pressure on lawmakers to come up with a better way to maintain the state’s roads.

“I think when you talk about real-life situations where projects are frozen, not funded and people not being able to go to work and build these projects that were formerly funded, that’s reality,” he says.

During his recent State of the State address, Gov. Jerry Brown called for new taxes or fees to fund transportation infrastructure, but that will take a two-thirds vote of the Legislature.

Why Lower Oil Prices Are Hurting California’s Transportation Projects 26 January,2016Katie Orr

  • DS

    Let’s cut the funding for the High Speed Rail that will take forever to build, cost at least 3 times more than projected, and no one will ride.

  • City Resident

    What better time to finally raise the gas tax than now?


Katie Orr

Katie Orr is a Sacramento-based reporter for KQED’s Politics and Government  Desk, covering the state Capitol and a variety of issues including women in politics, voting and elections and legislation. Prior to joining KQED in 2016, Katie was state government reporter for Capital Public Radio in Sacramento. She’s also worked for KPBS in San Diego, where she covered City Hall.

Katie received her masters degree in political science from San Diego State University and holds a Bachelors degree in broadcast journalism from Arizona State University.

In 2015 Katie won a national Clarion Award for a series of stories she did on women in California politics. She’s been honored by the Society for Professional Journalists and, in 2013, was named by The Washington Post as one of the country’s top state Capitol reporters.   She’s also reported for the award-winning documentary series The View from Here and was part of the team that won  national PRNDI and  Gabriel Awards in 2015. She lives in Sacramento with her husband. Twitter: @1KatieOrr

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