California has established itself as a leader in efforts to reduce greenhouse gas (GHG) emissions from transportation. At the same time, the state has not reflected its ambitious policies for GHG reduction and climate action in its practices for allocating state transportation funding. This white paper reviews the complex systems through which California generates and allocates state revenue for transportation investment. It finds that the state’s framework for funding transportation is disconnected from its climate goals. The paper also suggests preliminary steps for revising this framework to reinforce GHG reduction goals. Such recommendations are particularly salient given the state’s recently completed study of road user charges as an alternative transportation revenue source. Implementation of road charges – or any other new or revised transportation revenue source – would need to address the disposition of revenues generated. The paper argues that California should use any such opportunity to align the distribution of state transportation dollars with its climate objectives, not fall back on status quo allocation practices.