Gov. Gavin Newsom last week released an updated budget for the 2026-27 fiscal year that begins on July 1, which benefits from higher-than-projected tax revenues but still contains a provision to divert more than $300 million from the state highway fund to subsidize a specialized aviation fuel.

Newsom, pictured speaking at a CalAPA event, is wrapping up his second term as the state's chief executive and cannot seek re-election due to term limits. He is widely expected to run for president in 2028.

The administration's proposed $350 billion spending plan would balance the budget for two year, as required by the California Constitution, and trim longer-term budget gaps. The plan forecasts the state would face a $10.3 billion deficit in fiscal year 2028-29 and be $9.6 billion in the red in fiscal year 2029-30.

The governor's budget contains no major transportation initiatives, with about $18 billion in total funds for transportation in 2026-26. That includes $552 million from the General Fund, $17.1 special funds and $490 million in bond funds. Of note, the budget devotes $16.4 million from the state highway account for "Advancing GenAI for Safer and Smarter Roads," or artificial intelligence initiatives intended to improve safety generate mobility insights on the state highway system. Overall, the state's transportation budget increased 2.2% over the preliminary budget released in January. A press release on the governor's budget is HERE. The full revised budget and supporting documents can be found HERE. The details on the transportation budget can be found HERE.

A proposal opposed by CalAPA and other transportation coalition partners to siphon $300 million or more from the state highway account to subsidize the production of a special aviation fuel appears to have been preserved in the budget plan, although the Legislature will have a final say. A previous Asphalt Insider article on that proposal is HERE.

Dan Walters, the dean of California's political columnists, noted, "With just a few months remaining in his governorship, Newsom’s ability to bend the Legislature to his will is fading," and some difficult decisions will face his predecessor. Walters will be a featured speaker at CalAPA's "Summit at the Summit" Executive Leadership Forum June 24-25 at Lake Tahoe to provide his insight into Newsom's budget, elections and other political matters. Registration for that event is HERE.

A collaboration between the Federal Aviation Administration's Airport Asphalt Pavement Technology Program (AAPT) and the National Asphalt Pavement Association has produced two new technical reports to advance knowledge on mix design and pavement performance.

The first report, titled "Validation of Gyration Level for Superpave Gyratory Compactor (SGC) for Mix Design and Control of Airport Asphalt Mixtures," can be downloaded via NAPA HERE.

A second study, titled, "Preventing Slippage Failures at High-Speed Exits," can be downloaded HERE.

The Asphalt Pavement Alliance (APA), a CalAPA partner, noted that the reports are "a strong example of how industry collaboration continues to move asphalt technology forward."

Since this year is the 100th anniversary of historic Route 66, there's going to be plenty of tributes to the "Mother Road" that stretches 2,400 miles across the country from Chicago to Santa Monica. More than 300 miles of historic Route 66 is in California.

This month millions of Auto Club members received copies of "Via" magazine, featuring a section of Route 66 on the cover. Inside is a tribute article to the iconic route of roadside attractions, kitsch and Americana. That article, penned by Will Grant, is HERE.

In the same issue, Auto Club CEO Marshall L. Downey offers some eloquent words for Route 66, which can also apply to all roads:

"The American journey has always been about more than just the destination; it's about the freedom found between the mile markers," he said, adding: "We share more than borders on a map; we share the wisdom and experience of the countless miles of history we've traveled together."

Of course, asphalt is the pavement of choice for the historic route, and a section of Route 66 in California was featured on the cover of the CalAPA Almanac and Directory last year. Until flying cars come into widespread use, we'll see you out on Route 66 or whatever your travels take you.

Each week we highlight a word, acronym or other term commonly used in the asphalt pavement industry in California.

FINE AGGREGATE: Aggregate particles passing a No. 4 sieve.

Each week we highlight a key point or best practice of interest to asphalt paving crews, inspectors and others working in the field. We welcome suggestions. More tips can be found in our "Asphalt Parking Lot Construction Checklist" HERE. Information on the CalAPA "Quality Paving Certificate" program is HERE.

COMPACTION / DENSITY: The plans and specifications should specify how density is tested. The inspector needs to monitor the specified compaction density with a gauge to ensure that final target densities are achieved. Regular visual inspection of the mat during compaction is also required: look for segregation, indentations, properly sealed joints, and under-compacted areas.

Each week we highlight a term that is specific to climate-change issues related to the asphalt pavement industry. This feature is intended to raise awareness of the asphalt industry's climate-change initiatives and the specialized terminology that goes with them. More information on "The Road Forward" asphalt industry climate initiative can be found HERE. A recent CalAPA magazine story on the topic is HERE.

VARIABLE FREQUENCY DRIVE: A type of motor drive.

Editor's Note: As a convenience to our readers, Asphalt Insider reports the most current Caltrans "Statewide Crude Oil Price Index" posting. The department posts this monthly on its public website HERE. The index is used to calculate payment adjustments for paving asphalt under special provisions section "Payment Adjustments for Price Index Fluctuations" in those projects containing the section. The department posts the index on or about the first business day of the month using the daily Brent crude oil prices from the previous month as reported by Business Insider. Inquiries about the index should be directed to Caltrans at: Oil.Index@dot.ca.gov .

May 2026: $557.3 ($/ton)

Last month: $546.8

1 year ago: $358.6

"Limit your "always" and your "nevers."

– Amy Poehler

We hope you enjoy CalAPA's Asphalt Insider newsletter, widely regarded as the most influential publication of its type in California. We are committed to providing you with the most up-to-date information on technical issues, regulation, news, analysis, people, events and trends in California that is of interest to the asphalt pavement industry and our various agency partners. To subscribe to the newsletter, click HERE. For comments, questions or to suggest a story idea, click HERE. We are committed to promptly notifying our readers of any errors in this publication. Please click on the comment link above to alert the editor of any errors or omissions.

Sincerely,

Russell W. Snyder, CAE

Executive Director

The California Asphalt Pavement Association (CalAPA)®