California is experimenting with a new way to raise money for road repairs by keeping track of the mileage of cars and trucks with stickers or electronics.
A large-scale system won’t happen for many years, but officials say it may be needed because the influx of fuel-efficient or electric cars will shrink revenue from the gas tax, which is the largest source of road funding today.
People with lower incomes and older vehicles – they’re paying, where somebody that has a higher income, say, driving a Tesla – (they’re) not paying a damn thing.
James Madaffer, a commissioner on the California Transportation Commission, talking about inequities created by a gas tax
“It’s a future thing that probably wouldn’t work very well today, but maybe five years from now, certainly 10 years from now, it has a lot of potential,” said James Madaffer, a commissioner on the California Transportation Commission and the owner of a public-policy consulting firm.
The system could in theory gather a trove of data on individuals’ driving patterns, sparking privacy concerns. The 2014 bill that authorized the pilot study said the research must “protect the integrity of the data and safeguard the privacy of drivers.”
One privacy-oriented idea is to allow participants to prepay their taxes by purchasing a sticker that is valid for a fixed number of miles or a fixed time period. There is no record of where the car has traveled but, in some cases, the car’s odometer would need to be checked either in person or electronically. If the car went out of state, the driver could file for a refund.
Another method would use a device that automatically reports mileage information to the state electronically.
Oregon is the first state to test an electronic device to tax vehicle mileage. There, public information officer Michelle Godfrey said location data are destroyed after 30 days.
“Probably our top priority in all this has been privacy,” said Madaffer.
Currently, Californians pay about 59 cents per gallon in federal, state and local taxes for gas. That is the main source of funding for road and bridge maintenance. But it’s not enough to keep up with the backlog of work. State officials say money for heavy-duty repairs, currently $2.3 billion per year, needs to be raised by another $5.7 billion annually over the next decade.
Lawmakers meeting in a special session called by Gov. Jerry Brown are considering an increase in the gas tax between 6 and 12 cents per gallon. This would be a short-term fix, however, because as more Californians swap their gas-guzzlers for fuel-efficient or electric vehicles, gas tax revenues will fall.
With a system that tracks mileage, Californians who drive electric vehicles would pay more for road maintenance than they pay today and, conversely, gas guzzlers would probably pay less. Currently, owners of all-electric vehicles pay zero, because they do not use gasoline.
Motorists have raised the issue with the California Road Charge Pilot Program Technical Advisory Committee, which holds monthly hearings around the state. California subsidizes electric and plug-in hybrid cars to encourage more people to drive them. Some motorists have complained about a mixed message sent by the mileage-based charging system.
“It seems like this is counter to the goal of reducing fuel consumption,” a person from Santa Maria wrote in an email to the committee.
59 cents what Californians pay per gallon in federal, state and local gas taxes
Madaffer says it’s an issue of fairness. “People with lower incomes and older vehicles – they’re paying, where somebody that has a higher income, say, driving a Tesla – (they’re) not paying a damn thing,” he said, noting that he himself drives an electric car.
Volunteer drivers are being recruited for the pilot project, which will start next summer and aims to include 5,000 vehicles throughout California. Hundreds of people already have signed up, according to Madaffer. The program will simulate a per-mile charging system without actually using real money. A permanent system would require approval from the Legislature.
California is following in the steps of Oregon, where a program has about 900 participants so far.
“With very little tweaking, we could implement this system – this exact system – for a large number of vehicles,” said Godfrey, who is herself participating.
The Oregon program charges participants 1.5 cents for each mile they drive, and they pay with real money. The price is set to ensure that vehicles getting 20 miles per gallon, the average fuel-economy at the time the policy was evaluated in 2012-13, do not pay more or less than they would under a gas tax.
In Oregon, a device called a dongle that is smaller than a printer cartridge plugs into a data port below the steering wheel. The device captures the car’s mileage and sends it to an account chosen by the driver. Some accounts are managed by private companies. The account manager determines the charge, and provides credits for the taxes the motorist paid at the pump.
Ultimately, California believes the system it is building could catch on broadly.
“We’re designing it so that what works for California will possibly work for the whole country,” Madaffer said.
CALmatters is a nonprofit journalism venture dedicated to explaining state policies and politics.