Why Lower Oil Prices Are Hurting California's Transportation Projects

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.