The pandemic-induced crash in driving highlighted the need for California to reduce its reliance on fuel tax revenue to fund transportation.  -  Photo: Canva

The pandemic-induced crash in driving highlighted the need for California to reduce its reliance on fuel tax revenue to fund transportation.

Photo: Canva

New research from the Mineta Transportation Institute (MTI) revealed the impact on transportation budgets, according to MTI's news release.

The research is titled "Understanding COVID-19’s Impact on Local Transportation Revenue – A Mid-Crisis View from Experts."

“We learned that there was no simple ‘normal,’” said Dr. Asha Weinstein Agrawal, the study's author. “For example, large cities with busy job centers and tourism saw huge losses in sales and hotel tax revenue. Conversely, some rural areas saw an increase in these revenues due to an influx of tourists and people relocating from metro areas.” 

MTI found other key findings:

  • Federal COVID-19 relief funds were critical to maintaining essential transportation services during the pandemic, especially public transit systems.
  • The pandemic accelerated a simmering problem with how California distributes sales tax from online sales. The shift to online purchases created huge revenue windfalls for communities hosting warehouses and corporate headquarters, draining that revenue away from communities that historically relied on sales taxes from local retailers and services.
  • The pandemic-induced crash in driving — and thus fuel tax collected — highlighted the need for California to reduce its reliance on fuel tax revenue to fund transportation, given the state’s anticipated transition to electric vehicles.
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