California looks at dumping gas tax for per-mile fee as cars use less fuel

Source: By Christopher Cadelago, The Sacramento Bee • Posted: Tuesday, December 12, 2017

Weeks into a new gas tax hike, California transportation officials said Thursday they are studying ways to charge drivers based on how many miles they drove since their last fill-up rather than the amount of fuel they use.

The problem? California drivers are choosing such fuel-efficient cars that the state fears it will be deprived of enough road construction revenues in the long run.

The Caltrans study – the California Road Charge Pilot Program report – is billed as a way for the state to move from its longstanding but outmoded pump tax to a system where drivers pay based on their odometer readings.

Caltrans Deputy Director Carrie Pourvahidi said the state will send out a request early next year to technology companies for ideas on a simple communication system at gas stations or electric charging stations that can instantly tell how many miles the car has driven.

“It’d be point-of-sale technology,” she said. “We’re looking for something so simple that there is nothing (the driver) has to do.”

If the state finds technology that works, it will apply for a federal highway grant to explore how to set up a statewide system. Other states have been looking into switching to a per-mile road tax, but California appears to be the first to look at point-of-purchase technology in recent years, Pourvahidi said.

Officials say the research stems from the state’s struggles to come up with adequate per-gallon pump revenues as more cars get higher mileage.

Gov. Jerry Brown and the state Legislature passed a controversial set of tax and fee increases this year that they see as a stopgap. Those fees, including a 12-cent per gallon tax increase, are being challenged by tax groups seeking a November 2018 ballot repeal.

In a report issued Thursday, state officials said this year’s Senate Bill 1 tax should succeed in “delaying the expected transportation funding shortage by a decade or more,” but contends the state ultimately will need a new system for funding road maintenance and repair.

Assemblyman Travis Allen, R-Huntington Beach, is an opponent of SB 1 and dismissed the pay-per-mile concept as well, saying the state has adequate funding already.

“It’s another terrible idea from Sacramento Democrats to reduce productivity,” he said.

The California Road Charge Pilot Program report included an overview of a just-finished road charge experiment that enlisted more than 5,000 volunteer drivers to have their mileage monitored over nine months of driving.

Most volunteers used a device plugged into the vehicle’s data port that relied on wireless technology to transmit mileage information to a state contractor. The state then sent each driver a simulated monthly invoice, and drivers sent in online mock payments.

State officials report that the project went well and is doable on a larger basis for the entire state driving population.

However, they said, a system based on paying per mile at the gas pump or charging station could be simpler, more cost effective and more readily accepted by the public. It likely will take at least until 2025 to come up with a system, the report’s authors said.

That new system will be problematic politically, though.

Rob Stutzman, a consultant who works with Alliance of Automobile Manufacturers, said it could create a policy conundrum for California. “Any effort to charge those users creates a disincentive to purchase alternative fuel vehicles,” he said.

Matthew Baker, policy director for the Planning and Conservation League, an environmental group, said the pay-per-mile concept could help reduce the vehicle miles traveled by California drivers, an important goal for his group, but the fee could have the negative effect of hitting lower-income communities harder.

He said the state should use revenues from a pay-per-mile system to provide more access to non-car travel modes, such as public transit, and should focus efforts as well on creating communities where people don’t have to drive as many miles in their daily lives.