The coming decades are expected to bring unprecedented uncertainty about how much revenue the State of California will raise from its taxes on light-duty vehicle ownership as well as on motor fuels, taxes that provide the largest source of revenue for state highways and are also central to local transportation budgets. This report uses spreadsheet models to project this revenue through 2040 under a set of 8 scenarios that consider a wide range of possible futures in this period of uncertainty. The focus of the scenarios is to explore revenue outcomes with different rates of zero-emission vehicle adoption, though the report also explores the outcome of such changes as rising or falling vehicle miles of travel and population changes.
We chose the scenario approach because the immense uncertainty of the moment suggests that California would be wise to prepare for a range of possible futures with respect to the level of transportation revenue. The scenarios illustrate the revenue consequences of plausible alternative future vehicle fleet mixes, levels of travel, and population. There is no certainty that the future will resemble any of the chosen scenarios, but considering the whole set of outcomes can help state leaders to assess and design policies to achieve desired outcomes.
San Jose State University
The study will provide estimates on how state transportation revenues may vary under different future conditions. In addition, we will share the spreadsheet models used to make the forecasts, so that other users could explore what happens if the model inputs are changed.
The study results will demonstrate how much ZEV adoption rates or other key changes in travel behavior might change the amount of available transportation revenue. This knowledge will inform policy decisions about when and how the state may need to change the package of taxes and fees currently used to raise revenue.