close
close
California needs to speed up efforts to replace gas tax – Orange County Register

California needs to speed up efforts to replace gas tax – Orange County Register

California needs to speed up efforts to replace gas tax – Orange County Register

The final stretch of Interstate 5 from the Orange County line to Alondra Boulevard opened to add an additional lane and carpool starting in Santa Fe Springs on Friday, July 1, 2022. (Photo by Alex Gallardo, Contributing Photographer)

California’s roads and bridges need repair, maintenance and expansion, but the state’s revenue from the gas tax is declining and is projected to decline significantly. While the gas tax has been reliable for many decades, it is increasingly unsustainable and needs to be replaced.

Today’s cars and trucks are more fuel efficient, which reduces state gasoline tax revenue. Most internal combustion engine vehicles (which still account for the majority of vehicles on the road today) are more fuel efficient. For example, today’s Toyota Camry consumes five gallons more fuel than it did 20 years ago. Therefore, the owner of a Camry that drives 12,000 miles per year pays $61 less in state gasoline taxes.

California also has 1.2 million electric and hybrid vehicles, the highest number of any state. Owners of these vehicles must pay their fair share to maintain the road system. Under California law, electric vehicles pay $100 per year to use the highways, while an equivalent internal combustion engine car pays about $300 per year. So the shift to electric and hybrid vehicles results in a loss of about $200 million per year in state transportation revenue to maintain roads and bridges.

State law is set to ban the sale of new gasoline-powered vehicles starting in 2035. While this unrealistic law can be delayed, as electric and hybrid vehicles replace older vehicles, the state’s gas tax funding gap will only grow.

“Compared to 2023-24, by 2034-35, gasoline excise tax revenues decrease by $5 billion (64 percent), diesel excise tax revenues decrease by approximately $290 million (20 percent), and diesel sales tax revenues decrease by approximately $420 million (32 percent),” the Legislative Analyst’s Office projected last year.

To address the declining purchasing power of the gas tax, California lawmakers in 2021 passed Senate Bill 339, authorizing a new road user fee pilot program. Unlike previous pilot programs, drivers will pay fees for the miles they drive and receive a refund for any fuel taxes they pay.

With a road-use charge, drivers pay based on the number of miles they drive. Those who drive more pay more, and those who don’t drive pay nothing. This road-use charge system is more equitable to non-vehicle owners than other possible methods of paying for infrastructure, such as a highly regressive sales tax or the state budget’s general fund.

The road toll collection pilot program will select 800 people who will respond to a survey to gauge their feelings about road tolls prior to the program. After participating in a six-month program and paying the fees, they will respond to a survey to see if their feelings have changed and what the state can learn and improve.

The design of the pilot program could be better, however. For a state the size of California, which, after losing residents for years, reportedly grew to 39 million last year, more than 800 participants are needed for a pilot program at this stage.

In addition, California has already conducted six other studies on mileage-based pricing. With this pilot program, the state will have studied nearly every aspect of road pricing. California needs to join the five other states (Hawaii, Oregon, Utah, Vermont, and Virginia) that have gone beyond studies and begun implementing permanent mileage-based pricing programs. Further progress must be made on expanding and implementing a permanent shift to replace gasoline taxes with road user fees.