Due in part to increased fuel efficiency and the popularity of electric vehicles, California legislators are exploring replacing the gas tax with a mileage tax.
Despite the possibility of a growing gap between states’ gas tax revenue and their transportation budgets, just three states—Oregon, Utah, and Virginia—are now making money through road usage fees. Hawaii is about to join the fourth.
A similar scheme is due to be tested by the federal government, which will be funded with $125 million from the infrastructure bill that President Joe Biden signed in November 2021.
The below tweet confirms the news:
California lawmakers are considering replacing the gas tax with a mileage tax in part due to fuel efficiency and the rise of electric cars. https://t.co/clcofgMib5
— FOX 11 Los Angeles (@FOXLA) June 26, 2023
Many states have put in place interim measures, such as raising taxes or registration fees for electric cars or, more recently, taxing electricity used at public charging stations per kilowatt-hour.
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However, road usage costs, sometimes referred to as mileage-based user fees, distance-based fees, or vehicle-miles-traveled taxes, are drawing the majority of academic attention, research funding, and legislative activity.
According to the U.S. Bureau of Labor Statistics, sales of electric cars increased from 0.1% of all car sales in 2011 to 4.6% in 2021.
Last month, lawmakers approved a bill that would have allowed voluntary collecting of drivers’ odometer readings as the first step toward a program. However, Democratic Governor Jay Inslee vetoed the bill, claiming that Washington needed to have a plan in place before collecting individuals’ personal information.
Since 2010, the institute has performed annual national polls and has discovered increased support for mileage-based fees, reduced rates for low-income drivers, and charges depending on how much pollution a car emits, according to the spokesperson.
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