New local streets and roads revenue allocation estimates show continued growth

The League of California Cities has released new local streets and roads revenue estimates for the current and upcoming fiscal years. Overall allocations to cities and counties from the Highway Users Tax Account and the Road Maintenance and Rehabilitation Account are projected to rise 11% for the fiscal year 2022-23.

Current fiscal year allocations, 2021-22, are on track to be 9.3% above the prior year. These new figures forecast a somewhat lower revenue growth than estimated in January.

The numbers are based on new statewide tax revenue estimates released by the California Department of Finance, in coordination with Gov. Gavin Newsom’s revised May budget proposal.

The Legislature is not expected to alter gas tax rates. However, if altered, the Legislature would need to backfill any revenue impacts to local governments.  

Individual city and county allocations will vary based on the complicated revenue allocation rules and local circumstances. Estimates for individual agencies, together with an explanation of the formulas and trends and advice for forecasting long-range revenues for an agency, can be found in the California Local Government Finance Almanac. These updated figures should be used for budgeting.