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California’s efforts to fund highway and transit systems have evolved over time through several major crises, and the state continues to wage ongoing battles over transportation policy. For more than a century, California relied on pay-as-you-go transportation finance. Over the past few decades, in light of serious backlogs in roadway maintenance and repair and growing traffic congestion, the state has turned increasingly to substantial long-term bond finance. Most of this bonding authority has been used and the money spent. Due to legislative and voter-initiated limits on using fuel-based sales and excise tax revenues, the state now relies on a complicated system of fund swaps to service its transportation debt and pay for ongoing highway and transit programs. Now California faces yet another crisis in transportation finance brought on by decades of underinvestment in its aging infrastructure.

FUNDING TRANSPORTATION IN CALIFORNIA: A HISTORY OF CRISES