The 2026-27 California Spending Plan

Transportation

Overview

Budget Includes $31 Billion for Transportation. As shown in Figure 1, the budget package provides a total of $31.2 billion for transportation-related programs in 2026-27, including for the California Department of Transportation (Caltrans), California State Transportation Agency (CalSTA), local streets and roads (shared revenues), California Highway Patrol (CHP), Department of Motor Vehicles (DMV), and High-Speed Rail Authority (HSRA). This total reflects a net decrease of $3.9 billion (11 percent) compared to estimated 2025-26 expenditure levels. This year-to-year change is primarily due to large amounts of limited-term funding from previous budget packages that were available for expenditure in the prior year, particularly from the General Fund and Greenhouse Gas Reduction Fund (GGRF).

In this post, we summarize some of the most notable components of transportation program budgets in the 2026-27 state spending plan.

Support for Transit

GGRF Funding for State Transit Programs. Two state transit assistance programs historically have received notable funding from GGRF through a continuous appropriation, with annual amounts varying based on cap-and-invest program auction revenues. Specifically, the Transit and Intercity Rail Capital Program (TIRCP) and Low Carbon Transit Operations Program (LCTOP) have received an average of about $400 million and $145 million annually, respectively, over the past decade. Recent changes to the cap-and-invest program are anticipated to result in notably lower annual revenues for GGRF beginning this fiscal year. As a result, the budget package assumes lower funding levels for these programs in 2026-27—$95 million for TIRCP and $47 million for LCTOP. The actual amount of funding these programs receive will depend on how much revenue the state takes in from cap-and-invest program auctions and will not be certain until the end of the fiscal year. (Please see our forthcoming post, The 2026-27 California Spending Plan: Natural Resources and Environmental Protection, for more discussion regarding the cap-and-invest program and GGRF expenditure plan.)

State Funding for Local Transit Services. The budget package provides $230 million through CalSTA from GGRF on a one-time basis for public transit agencies through the Zero-Emission Transit Capital Program that was established via Chapter 54 of 2023 (SB 125, Committee on Budget and Fiscal Review). CalSTA will allocate these funds to regional transportation planning agencies on a formula basis; those regional entities will then distribute funds to local transit agencies to purchase zero-emission transit vehicles and/or support operational costs. The 2023-24 budget agreement expressed intent to provide a total of $1.1 billion for this program over several years; this 2026-27 allocation brings the total appropriated thus far to $640 million.

Bay Area Transit Loan. As part of the budget package, Chapter 6 of 2026 (AB 117, Committee on Budget) authorizes the state to provide up to $590 million in loans from TIRCP to the Metropolitan Transportation Commission (MTC). MTC will disburse these funds to specified Bay Area public transit agencies that previously requested financial assistance to avoid cuts to their services in 2026-27. (Eligible agencies are the San Francisco Bay Area Rapid Transit District, the San Francisco Municipal Transportation Agency, the Peninsula Corridor Joint Powers Board [Caltrain], and the Alameda-Contra Costa Transit District.) The loans will come from TIRCP funds that have already been appropriated by the state budget and committed to Bay Area transit agencies for specific capital projects, but that would otherwise be held in state-level accounts until needed for the construction phases of those projects. (TIRCP is funded by GGRF and state transportation funds.) This arrangement is intended to allow agencies to temporarily use these funds to support their operational costs, with the funds still being available for their original intended uses—the planned capital projects—once the loans are repaid. The loans will have a 12-year term and require quarterly repayments, with only interest payments due in the first two years. (The loan interest will be determined based on the state’s Surplus Money Investment Fund rate, helping ensure that the loan’s impact on the state budget remains neutral and the state continues to benefit from the same earnings it would otherwise have received.)

Major Events Assistance. The budget package authorizes the Department of Finance—in coordination with the Joint Legislative Budget Committee—to provide up to $20 million from the General Fund to local transit agencies to assist them in preparing for and meeting transit needs for major events and event-related activities. (Please see our forthcoming post, The 2026-27 California Spending Plan: Other Provisions [Major Events] for more information on this provision.)

Caltrans

The budget includes $16.6 billion to support Caltrans in 2026-27. This represents a $102 million (less than 1 percent) decrease when compared to the estimated 2025-26 expenditure level, largely due to lower General Fund spending as one-time funding provided in prior budget packages phases out. Just over half ($8.5 billion, 52 percent) of Caltrans’ 2026-27 budget is supported by special funds, including revenues from various fuel taxes and vehicle fees. Most of the remainder is from federal funds ($8 billion, 48 percent), with support from the General Fund and bonds contributing less than 1 percent ($103 million). Below, we discuss some of the notable new spending for Caltrans in 2026-27.

Homeless Encampment Coordinators. The budget includes General Fund resources of $6.3 million in 2026-27 and $6.2 million in 2027-28 to continue supporting Caltrans’ homeless encampment coordinator team. (The team was established in 2021-22 with limited-term General Fund. Subsequent funding extensions and augmentations have allowed the team to maintain and expand its operations, growing from 20 to 36 positions.) These coordinators are tasked with managing encampment cleanups on the state highway system by working with Caltrans’ maintenance staff, local governments, law enforcement, and service providers.

Clean California Litter Abatement Contracts. The budget includes $40 million one-time General Fund for Caltrans to partner with nonprofit organizations that will temporarily hire targeted populations—such as formerly incarcerated individuals—to conduct litter abatement on the state highway system. This funding will be allocated through Clean California, a statewide program administered by Caltrans that supports state and local litter abatement and beautification efforts. Before this augmentation, Clean California had received a total of $1.2 billion from the General Fund through previous budget packages.

Targeted Use of Trade Corridor Enhancement Program (TCEP). TCEP is an ongoing competitive grant program that provides funding for projects along corridors with high volumes of freight movement. The program is estimated to receive about $540 million in 2026-27 from state diesel excise tax revenues and federal transportation funds. The budget package includes budget bill language that directs $15 million of 2026-27 TCEP funding to road improvement projects that serve the Port of Los Angeles and the Port of Long Beach.

One-Time Funding for Local Transportation Projects. The budget includes a total of $31.3 million from the General Fund to support 17 specific local transportation projects around the state. Amounts provided to each project range from around $200,000 to $10 million. Caltrans is responsible for dispersing the appropriated amounts to these projects.

Games Route Network Automated Enforcement Budget Trailer Legislation. The budget includes trailer legislation—Chapter 82 of 2026 (SB 169, Committee on Budget and Fiscal Review)—that authorizes the use of an automated enforcement system for the Games Route Network. This will be a temporary system of designated highway lanes that provide exclusive or priority access to vehicles serving the 2028 Los Angeles Olympic and Paralympic Games. (The 2025-26 budget included budget trailer legislation authorizing the creation of the Games Route Network and one-time funding for Caltrans to begin early development.) The legislation also (1) authorizes the state to levy a $293 fine for unauthorized use of the network, with reduced fines available for lower-income individuals; (2) allows Caltrans to enter into an agreement with a local agency to administer the automated enforcement system; (3) exempts the establishment of the automated enforcement system from needing to comply with the Administrative Procedure Act; (4) establishes data security requirements; and (5) requires the contracted local program administrator to conduct a public awareness campaign before automated enforcement begins.

California Highway Patrol

The budget provides $3.4 billion for CHP in 2026-27, which represents a small decrease ($51 million) compared to the estimated 2025-26 budget. Nearly all of CHP’s funding is from the Motor Vehicle Account (MVA). Below we discuss notable augmentations in CHP’s 2026-27 budget.

Operations and Equipment. The budget package provides $15.7 million scored to the 2025-26 fiscal year and $87.9 million for 2026-27 on a one-time basis from MVA to cover CHP’s various operational and equipment expenses. These costs include vehicles, utilities, litigation, and vehicle insurance premiums, as well as upgrading wireless mobile systems and body-worn cameras.

Capital Outlay Infrastructure Projects. The budget includes a total of $11.6 million from the General Fund for various stages of three capital outlay projects. These include working drawings and construction for one radio tower project ($9.3 million), preliminary planning and working drawings for another radio tower ($1.3 million), and conducting a site search for an area office replacement ($1 million).

Elected Officials’ Family and Capitol Security. The budget provides one-time funding from MVA for the following security-related activities: (1) $20 million to expand CHP’s security authorization to include immediate family members of current and former constitutional officers or legislators based on the threat level, and (2) $6.8 million to cover the costs associated with providing protection and security at the State Capitol Complex.

Highway Violence Task Force. The budget includes $885,000 from MVA on an ongoing basis for seven positions to support a targeted effort to address violence on the state’s highways. This task force was funded in previous budgets beginning in 2022-23—at a higher level for more expansive activities—with limited-term appropriations.

Bixby Bridge Traffic Enforcement. The budget provides $618,000 from the General Fund on a one-time basis to enforce traffic and parking enforcement at Bixby Bridge in Big Sur.

Department of Motor Vehicles

The budget provides $1.6 billion for DMV in 2026-27, which represents a $158 million increase from the estimated expenditure level in 2025-26. Nearly all of DMV’s funding is from MVA. The year-to-year increase is largely attributable to new spending on the activities described below.

Digital eXperience Platform (DXP) Project. The budget includes $94.1 million from MVA on a one-time basis and 109 temporary positions to start the Driver Licensing phase of the DXP information technology project. The DXP project also received one-time funding in previous years (most recently $53.1 million from MVA in 2025-26 for the Vehicle Registration phase). The project will need subsequent appropriations in order to complete its Driver Licensing phase.

State-to-State (S2S) Verification System. The budget provides $56 million for completing California’s integration into the S2S identification and driver’s license verification system pursuant to federal REAL ID requirements. The budget package also includes statutory provisions in SB 169 that place guardrails around data privacy, unauthorized access, and third-party interference to try to address concerns about the potential use of driver data for federal immigration enforcement.

Capital Outlay and Office Relocation Projects. The budget includes $23.5 million on a one-time basis for four DMV capital outlay and office relocation projects. Of this total, $13.9 million is from MVA and $9.6 million is from the Public Buildings Construction Fund (lease revenue bonds that will eventually need to be paid back with interest).

Other Adjustments. The budget includes an augmentation of $24.5 million from MVA on a one-time basis for various program and operational needs at DMV, including building maintenance, security, and janitorial expenses. In addition, it provides $5 million from MVA to expand DMV’s Mobile ID program to more users. The budget package also includes statutory language that eliminates certain printed material requirements to reduce DMV’s printing costs.

High-Speed Rail Authority

The budget provides a total of $1.5 billion for HSRA in 2026-27 from GGRF and Proposition 1A (2008) bond funds. This budgeted amount is $182 million (11 percent) lower than the project’s estimated expenditure level in 2025-26. Importantly, actual 2026-27 expenditures could be notably higher or lower than budgeted because the project has access to resources—such as GGRF funds that remain unspent from prior years—that far exceed this year’s budgeted amount.

Budget Trailer Legislation Expands Funding for Administrative Costs. Budget trailer legislation—Chapter 259 of 2026 (SB 193, Committee on Budget and Fiscal Review)—allows HSRA to use GGRF to support its administrative costs. (Historically, these costs have been supported by Proposition 1A, as previous statute precluded HSRA from using GGRF for these purposes.)

Reappropriates Funds to Provide Additional Time for Expenditures. The budget makes some significant HSRA reappropriations to allow additional time for funds to be spent. These include:

• Proposition 1A Bond Funds for Union Station Project. The budget reappropriates up to $423.4 million of Proposition 1A bond for Los Angeles Metro’s Link Union Station project in the City of Los Angeles.

• Reappropriates Federal Funds. The budget reappropriates up to $246.4 million in authority to expend federal grant awards from the Consolidated Rail Infrastructure and Safety Improvements and Rebuilding American Infrastructure with Sustainability and Equity programs.