Understanding California’s Proposed Mileage Tax

California is exploring a shift from its traditional gas tax to a mileage-based user fee, known as the Road Charge. This initiative aims to address declining gas tax revenues as more drivers adopt fuel-efficient and electric vehicles. The proposed system would charge drivers based on the number of miles they travel, ensuring all road users contribute to infrastructure maintenance, regardless of their vehicle’s fuel source.

Why the Change? Declining Gas Tax Revenues

The state’s gas tax, currently at approximately 59 cents per gallon, has traditionally funded road repairs and maintenance. However, with the rise of zero-emission vehicles—which don’t rely on gasoline—there’s a projected $5 billion decrease in gas tax collections by 2035. This shortfall has prompted officials to consider alternative funding mechanisms like the Road Charge.

How Would the Mileage Tax Work?

The Road Charge pilot program tested various methods for tracking mileage, including:

• Plug-in devices

• Vehicle telematics systems

• Manual odometer readings

Participants were charged rates such as 2.5 to 2.8 cents per mile, aiming to match current gas tax revenues. The pilot concluded in January 2025, and results are pending review.

Opposition and Concerns

Critics, including organizations like Reform California, argue that the mileage tax:

• Infringes on privacy by potentially tracking drivers’ movements.

• Imposes additional financial burdens, estimating costs of $600–$800 annually per driver.

• Disproportionately affects rural and low-income residents who often drive longer distances.

They also highlight that this tax could be equivalent to an 80-cent-per-gallon increase in gas prices.

Public Involvement and Next Steps

As the state reviews the pilot program’s outcomes, public opinion will play a crucial role in shaping future policies. Engaging in discussions, attending public forums, and voicing concerns to local representatives can influence the direction of transportation funding in California.