California next month will start charging drivers by how much they drive, a test program meant as an alternative to the nation’s policy of taxing gasoline as a way to pay for highway construction.
Funding for national and state transportation projects is drying up nationwide as the gas tax, long the nation’s primary source of road funding, is no longer providing enough revenue as vehicles become more fuel-efficient and people drive less.
So California, frequently a leader on environmental and transportation issues since it’s the nation’s largest state, will test an alternative: charging drivers a fee based on how many miles they travel instead of charging them at the gas pump.
In 2014, the Golden State passed legislation directing a study into charging drivers a mileage-based fee. Under the nine-month pilot, set to start in July, 5,000 volunteers will report and simulate payment for the amount of miles they travel.
The state legislature will receive the program’s results at the end of the pilot and then decide how to move forward. If successful, California’s gas tax, which will be reduced to 28 cents a gallon on July 1, could be replaced by a system that charges by mileage.
“Our whole point of the pilot is to see if this is feasible for California,” said Vanessa Wiseman, a spokeswoman for the California Department of Transportation. “What we know right now is that the gas tax isn’t cutting it anymore.”
With dwindling funds for road maintenance, the state slashed $1.5 billion for incoming projects last year, Wiseman said. Earlier this year, the California Transportation Commission announced a 38 percent, or $754 million, reduction in transportation funding.
Oregon started a similar test in 2015. The program, OReGO, has just over 1,000 participants. Oregon’s volunteers are exempted from the state’s 30-cent tax and instead are charged 1.5 cents per mile driven, while California’s volunteers will pay for gas as they normally would since the state hasn’t established a per-mile rate.
OReGo participants have various ways to report on their mileage, and California’s program plans to do the same.
In 2014, an 11-state group known as the Western Road Usage Charge Consortium was formed to study mileage-based fees and other gas tax alternatives. States such as California, Texas, Hawaii, Oregon and Washington are in the group, and next year, a similar mileage-based revenue pilot program will start in Washington.
“We’re all in the same boat as a nation,” Reema Griffth, a Washington Transportation Commission spokeswoman, told the Washington Examiner. “Sooner or later, the reality will set in that we don’t need the gas tax system we have. It’s a real revenue reality check.”
At the federal level, how to shore up the dwindling Highway Trust Fund has been a divisive issue for at least a decade, since many lawmakers don’t want to raise the federal 18.4-cent gas tax, which was last increased in 1993.
In December, Congress passed the five-year Fixing America’s Surface Transportation (FAST) Act to fund programs for roads, bridges, public transportation and rail. The legislation includes a $95 million grant to states that want to explore “user-paying concepts” such as a mileage tax.
Carl Davis, research director at the Institute of Taxation and Economic Policy, told the Washington Examiner there’s no short-term fix for the “congested and crumbling infrastructure,” but added he’s encouraged to see state legislatures experiment.
“The discussion is happening,” Davis said. “And that’s a good thing.”
