close
close

California must speed up efforts to replace gas tax – San Bernardino Sun

The final section of the Interstate 5 Freeway from the Orange County border to Alondra Boulevard opened Friday, July 1, 2022, to add carpool and an additional lane starting in Santa Fe Springs. (Photo by Alex Gallardo, contributing photographer)

California's highways and bridges need repair, maintenance, and expansion, but the state's gasoline tax revenues are declining and are expected to decline significantly. Although the gas tax has been reliable for decades, it is increasingly unsustainable and needs to be replaced.

Today's cars and trucks use less fuel, which reduces government revenue from the gasoline tax. Most internal combustion engine vehicles – which still make up the majority of vehicles on the road today – get further on a gallon of gasoline. For example, the Toyota Camry uses five gallons less fuel today than it did 20 years ago. So a Camry owner who drives 12,000 miles a year pays $61 less in state fuel tax.

California also has 1.2 million electric and hybrid vehicles, by far the highest of any state. Owners of these vehicles must pay their respective contribution to the maintenance of the road network. Under California law, using highways costs electric vehicles $100 per year, while a comparable internal combustion engine car costs about $300 per year. So the switch to electric and hybrid vehicles results in a loss of about $200 million per year in state transportation revenue for the maintenance of roads and bridges.

A state law would ban the sale of new gasoline-powered vehicles starting in 2035. While the unrealistic law may be delayed, as electric and hybrid vehicles replace older vehicles, the state's funding deficit from the gasoline tax will only increase.

“Compared to 2023–24, gasoline tax revenues will decrease by $5 billion (64 percent), diesel tax revenues will decrease by about $290 million (20 percent), and diesel sales tax revenues will decrease by about $420 million (32 percent) by 2034–35,” the Legislative Analyst's Office predicted last year.

To counteract the declining purchasing power of the gas tax, California politicians passed Senate Bill 339 in 2021, which authorized a new road toll pilot program. Unlike previous pilot programs, drivers pay fees for the miles driven and are reimbursed for the fuel taxes paid.

With a road user charge, drivers pay according to the number of kilometres they drive. Those who drive more pay more, and those who don't drive pay nothing. This system of road user charges is fairer to those who don't own a vehicle than other possible methods of paying for infrastructure, such as a highly regressive sales tax or the general government budget.

The road pricing pilot program will select 800 people to complete a survey before the program to determine their attitudes toward road pricing. After participating in a six-month program and paying the fees, they will complete a survey to determine if their attitudes have changed and what the state can learn and improve from this.

However, the pilot program could be better designed. For a state the size of California, which is expected to grow to 39 million residents last year after years of population decline, a pilot program at this stage will need more than 800 participants.

In addition, California has already conducted six other studies on mileage-based user fees. With this pilot program, the state will have examined nearly every aspect of road pricing. California must join the five other states – Hawaii, Oregon, Utah, Vermont and Virginia – that have gone beyond studies and begun implementing permanent mileage-based user fee programs. Further progress should be made in expanding and permanently implementing the replacement of the gasoline tax with road pricing.