From a market-based perspective, user fees that pay for public roads should be based on the amount that drivers use them. Instead, California assesses such fees through a tax on gasoline that only roughly approximates the wear and tear vehicles impose on the road system. People buy gas and then can drive as many miles as they choose.
The system has worked decently enough, even though transportation officials and lawmakers haven’t always used the money wisely or efficiently. But California is running into a problem.
Currently, 25% of new car purchases are electric vehicles and an increasing portion are hybrids that combine gasoline with battery systems. As the state phases out new gas-powered car sales by 2035, it fears it won’t have enough funds to maintain our infrastructure.
The current system is inequitable. The average driver pays $300 a year in gas taxes, but EV drivers pay no such taxes, although they pay a flat road improvement fee of $118 to help offset the costs. The governor approved two pilot programs whereby drivers would use a GPS system or take photos of their odometer and pay based on their mileage.
As Caltrans explains, “Under a road charge, all drivers share roadway maintenance and repair costs based on what they actually use.”
One complaint centers on the intrusiveness of having the state monitor our mileage. That’s legitimate, although California insurers already use mileage estimates to help determine premiums.
Another is the implementation issue. How many more government bureaucrats with loaded benefits would California end up adding just to make this work? Would they be able to make it work in such a large state?
Our bigger fear is that our tax-happy Legislature might impose the new mileage fee and then not rescind the existing gas tax. We can’t think of any example of our state ever eliminating a major existing tax.
We’d prefer a hybrid system similar to the one approved in Utah. In that state, EV drivers can pay a flat fee at registration — or choose to pay based on their monitored mileage. That would solve the problem without introducing new chores for the majority of drivers who are already paying gas taxes ostensibly to improve and maintain roads.
It is indeed time to revisit how user fees are assessed.
But until lawmakers can convince Californians that they will totally replace the old tax with a new one, we’d urge them to try this middle course.
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