Only one state, Alaska, has worse roads than California. Tens of billions are needed to repair the crumbling, cracking and cratered infrastructure. Nearly a decade ago, legislators passed a $52 billion bill to fix the problems. So, what is Sacramento thinking about? Moving fuel tax revenue dollars that should be used for road repair to fund a scheme to produce green jet fuel.
The Reason Foundation’s latest highway report ranks California 49th. From abysmal urban interstate surface conditions to battered urban arterial roads to rundown rural interstate pavement quality, California’s roads are in lousy shape. At least the state’s bridges fall in the middle, with only 6% judged to be structurally deficient.
Baruch Feigenbaum, one of the report’s authors, says the state’s highway system ranks so low because it “is one of the top per-mile spenders on highways” yet still “has some of the most pothole-ridden roads in the country.”
“The state,” says Feigenbaum, “needs to be improving efficiency by selecting projects using a more quantitative metric and spending fuel tax revenue on highways.”
Despite the obvious need, Gov. Gavin Newsom apparently wants to redirect resources away from road repair. He has proposed a $1 to $2 credit for every gallon of alternative jet fuel, also known at sustainable aviation fuel (SAF), “produced for use in California,” an arrangement that CalMatters says will be funded “by raiding your road repair budget.”
The nonpartisan Legislative Analyst’s Office is not on board with the governor’s proposal. The program would cut into tax revenues that fund “the California Department of Transportation (Caltrans) and its highway maintenance and rehabilitation programs” (a $70 million yearly reduction), as well as dollars transferred to cities and counties for local street and road needs (they’d lose about $49 million a year). Because the governor’s office anticipates that the credit could grow, possibly reaching roughly $300 million a year, there could be a near doubling of “the reductions and corresponding fiscal and programmatic impacts.”
The LAO also points out California is projected to run into “future transportation funding challenges due to existing trends and policies that increase zero emission‑ vehicle (ZEV) adoption, which in turn will reduce diesel and gasoline excise tax revenues.” Newsom’s plan “would expedite and add to those projected fiscal and programmatic impacts.”
Sometimes it seems that Californians will never have smooth roads again. Everyone is just going to have to get used the idea that their next drive might be their car’s last.
Lawmakers responded in 2017 to the years of road negligence, passing the $52 billion highway repair bill that’s funded by motor fuel tax hikes every year through 2027 — in the state where public policy has driven gasoline prices to the highest in the country. Yet California still has lousy roads and a governor who believes fixing them isn’t as important as pumping out more sustainable aviation fuel.
Even before the U.S. and Israel attacked the regime in Iran, triggering an increase in oil prices, California had a “burgeoning aviation fuel crisis,” according to the American Energy Alliance, caused by public policy choices. As early as last October, Assemblyman Stan Ellis of Kern County along with University of Southern California professor Michael Mische and another author were warning the state’s “severe restrictions regulating the oil, refining, and fuels industries” was threatening jet fuel production and endangering military readiness.
So, given the aviation fuel crisis and predictions that the market for SAF will grow rapidly, maybe increasing in-state production of SAF is the right road to take. Or maybe it isn’t. First of all, there is little to no market for SAF without government intervention through mandates and financial incentives, and even with those, Delta Air Lines, the world’s largest carrier in terms of revenue, has softened its commitment to SAF use, citing slow-moving tech advances in production.
Second, researchers at the University of California Energy Institute at Berkeley’s Haas School of Business say the governor’s SAF plan carries high costs and will provide few benefits. They expect diesel excise tax receipts fall by at least a fifth and as much as three-fourths “within a few years,” with the prices of both gasoline and diesel rising by 10 to 15 cents “because of interactions with existing policies.”
They also explain that because SAF, which costs at least three times as much to produce as petroleum-based aviation fuel, primarily “would come from diverting biofuels from surface transport to aviation,” any real “reductions in carbon emissions would be small and expensive.”
Average Californians aren’t likely to read the LAO and Haas reports, but they will probably find the plan to not be of their liking due to its costs at the pump — and at the car repair shop.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute and co-author of The California Left Coast Survivor’s Guide.