Local agencies face an $82.1 billion transportation funding shortfall

By Damon Conklin, legislative advocate (transportation)

A recent statewide survey of local streets and roads confirms that the bulk of the state’s transportation network remains under increasing financial pressure.

Although the statewide average Pavement Condition Index has remained stable at 65 ("At Risk"), it is expected to decrease to 60 by 2035, with the percentage of poor/failed pavements increasing to over 26%. The report concludes that rising construction and labor costs, coupled with an aging infrastructure, will outpace available revenues, resulting in an estimated $82.1 billion in deferred maintenance over the next decade.

Conducted every two years, the California Statewide Local Streets and Roads Needs Assessment evaluates cities and counties’ transportation networks, which represent over 83% of the state's public road system. Seventy-five percent of all cities and counties participated in the survey this year.

The report comes amid increased scrutiny of the state’s gas tax, which directly funds local road repairs through SB 1 (Beall). The report notes that the rise in alternative modes of transportation, such as biking, and reduced gas tax revenues are contributing to the shortfall as well. Studies by the American Society of Civil Engineers and the California Transportation Commission are also predicting long-term fiscal challenges for the state’s transportation network.

Beyond serving as a valuable benchmarking resource for city managers and public works departments, this new report is one of Cal Cities' principal advocacy tools for educating the Legislature, Governor, and state agencies on the transportation funding needs of local governments. Cal Cities provides the report to the California Transportation Commission to support its statewide transportation needs analysis and long-range funding discussions.

The 2026 Local Streets and Roads executive summary and final report are available online.