MONTEREY COUNTY — Transportation Agency for Monterey County (TAMC) Board of Directors held a study session Jan. 28 to examine potential revenue sources to replace declining gas tax funds that support local transportation projects.
The presentation followed a September 2025 board request for an in-depth discussion on how alternative funding mechanisms could affect Monterey County residents.
Under California’s current transportation funding system, projects are financed through a blend of federal, state, regional and local sources. According to the “State and Local Transportation Full Needs Assessment – May 2025,” the state’s 10-year transportation funding needs total $756.8 billion, based on regional transportation plans, fiscal needs surveys and assessments of transit, climate adaptation and tribal transportation.
Projected 10-year revenues total $541 billion after accounting for a $31 billion decline from reduced fuel consumption, resulting in an estimated $215.7 billion shortfall.
TAMC officials said declining statewide gas tax revenues will reduce long-term funding available for transportation projects in Monterey County. Future changes to the gas tax system — including a shift to a road user charge or higher vehicle registration fees — would directly influence the county’s ability to maintain stable revenue for roadway maintenance and improvements.
Board members focused on two options with the greatest potential to offset the projected shortfall:
- A road user charge, a fee based on the number of miles traveled regardless of vehicle fuel source. Because it would not diminish as drivers shift to zero-emission vehicles, it is regarded as a sustainable revenue source.
- An increase in vehicle registration fees, based on a vehicle’s value and agnostic to fuel source, fuel economy and travel patterns. Officials said this option also would remain stable as drivers transition to zero-emission vehicles.
After discussion, the board directed staff to begin conversations with regional partners on a replacement for the statewide gas tax that includes a vehicle registration fee option prioritizing affordability for rural residents.
