Local streets and roads allocation estimates updated for fiscal years 2024-25 and 2025-26

By Brian Hendershot, Cal Cities Advocate managing editor

Cal Cities this week released new local streets and roads revenue estimates prepared by Cal Cities Fiscal Policy Advisor Michael Coleman. The allocations come from tax revenues collected at gas pumps and other sources. Cities and counties should use these estimates for budgeting.

The report is based on new statewide revenue estimates provided by the California Department of Finance with the release of Gov. Gavin Newsom’s May Revision. These allocations are formula-based and are not subject to budget negotiations.

The update contains updated estimated allocations for all cities and counties for the current budget year and fiscal year 2025-26. The estimates reflect a small upward revision of the current fiscal year estimates by about 2.5%. For FY 2025-26, the department estimates statewide Road Maintenance and Rehabilitation Account allocations to cities and counties will increase by 3.6%. Highway Users Tax Account allocations will remain flat from the prior year.

Individual agency revenue growth will vary. The individual agency estimates take into account the various allocation rules contained in statute, along with agency population, vehicle registration, assessed valuation, and road mileage.

The county estimates were prepared in collaboration with the California State Association of Counties. The next update of these revenue estimates will be in January 2026.