A group called Transportation California had asked Lieu to introduce legislation to triple the vehicle license fee drivers pay when registering cars.
The group wanted it to be a constitutional amendment so it the revenue would be dedicated only to roads, which meant voters would still have to approve it.
The proposed formula was 1.35 percent of the value of the vehicle. It could raise as much as $4 billion a year for roads and public transit, both of which have been underfunded for years because of the budget crisis.
"A proposal was being developed to place on the 2014 ballot a proposition to essentially revert the Vehicle License Fee to its prior rate of 2 percent, which was the rate from 1948 to 2004, to provide a stable funding source for transportation and infrastructure," said Lieu.
"I have listened carefully to those who have contacted my office or me. Additionally, more stakeholders weighed in on this important issue. As a result, I will not be introducing the proposal," said Lieu. "Instead, I will work with transportation stakeholders and the public next year on alternative ways to mitigate the transportation infrastructure problem."