Drive a gas powered car and you pay $.59 a gallon in tax, plus a sales tax in California—the highest in the nation. Drive an EV, you pay no gas tax but get to ride on the streets and freeways. Now it is becoming a revenue loser—and government can not afford you keeping the money you earn.
“According to the Associated Press, however, legislative analysts predict gas tax collections will decrease by $5 billion — or 64% — by 2035, in a scenario where the state successfully meets its climate goals. Governor Gavin Newsom signed an executive order in 2020 requiring all new passenger vehicles sold in California to be zero-emission by 2035.
Professor Michael Manville, chair of UCLA’s Urban Planning Department, says funds generated from gas taxes in the state and nationwide have declined due to the increased use of fuel-efficient cars and zero-emission vehicles.
“What that’s led to this idea that we could charge per-mile driving, which of course, is such a big change,” Manville said.”
Be careful. Sacramento may need money so bad that you will still pay a gas tax, a sales tax AND a per mile charge. The more government needs money, the higher the per mile charge—until the streets are empty and the people are in Florida.
California explores charging people for how many miles they drive
California is exploring a new road charge to replace the gas tax; however, implementation faces a long road ahead.
Author: Jackson Ellison, ABC10, 3/19/25 https://www.abc10.com/article/news/local/california-gas-tax-revenues-road-charge-pilot-program-explained/103-d43c9599-df07-4b06-90d0-d94eec843492
SACRAMENTO, Calif. — California is exploring a different funding method for road repairs: having drivers pay for them, similar to how they pay for public utilities.
Known as a road charge, drivers in California would pay a monthly fee based on the number of miles driven.
As California transitions to a carbon emissions-free future, the system is considered an alternative to the current gas tax.
The gas tax is about 59 cents per gallon, the country’s highest rate, and it generated about $7.8 million in revenue in 2023.
However, the reliability of gas taxes to fund future infrastructure projects is in doubt as California switches to zero-emissions vehicles, which don’t have to pay anything at the pump.
Caltrans says—right now, about 80% of California’s highway and road repairs are funded by the gas tax.
According to the Associated Press, however, legislative analysts predict gas tax collections will decrease by $5 billion — or 64% — by 2035, in a scenario where the state successfully meets its climate goals. Governor Gavin Newsom signed an executive order in 2020 requiring all new passenger vehicles sold in California to be zero-emission by 2035.
Professor Michael Manville, chair of UCLA’s Urban Planning Department, says funds generated from gas taxes in the state and nationwide have declined due to the increased use of fuel-efficient cars and zero-emission vehicles.
“What that’s led to this idea that we could charge per-mile driving, which of course, is such a big change,” Manville said.
Under California’s landmark electric car mandate, a pillar of Gov. Gavin Newsom’s climate change agenda, 68% of all new 2030 model cars sold in the state must be zero emissions, increasing to 100% by 2035, when 15 million electric cars are expected in California.
Currently, according to Caltrans, California drivers of gas-powered vehicles pay about $300 a year in state gas taxes. Owners of zero-emission vehicles model year 2020 and newer pay, too; those drivers are charged a $118 Road Improvement Fee on their annual registration renewal.
Now, however, the state is exploring changing that by implementing something called the California Road Charge. State lawmakers approved a pilot program to test it. The pilot launched in August 2024 and concluded in January.
The program tracked how much people drove each month through three reporting methods: plug-in devices, vehicle telematics and photographed odometers.
The mileage rates were set at 2.5 cents per mile for light-duty vehicles like cars and other vehicles weighing less than 10,000 pounds. The rate for heavy-duty vehicles is dependent on their weight.
“The trickiest problem is what you actually do about electric vehicles,” Manville said. “Because you actually want people to buy electric cars and right now, one of the biggest inducements is…well, you don’t have to pay the gas tax.”
Other states have also begun examining the innovative funding structure. In 2023, Hawaii became the first state to implement the program by law for electric vehicles to pay by 2028. And in Utah, drivers of electric vehicles can either pay a flat annual fee of $143.25 or opt into the Utah Road Usage Charge Program instead, paying 1.11 cents per mile—but no more than the cost of that flat annual fee, so if you drive less, you pay less.
Republican lawmakers have rallied against the gas tax and called for its elimination, as California has the highest average gas prices in the nation.
Some Republican lawmakers opposed the pilot program and don’t believe the road charge is a viable way forward.
“As long as we fail to build housing in adequate supplies to house our workforce near their jobs, then the working poor are still going to be paying far more in vehicle-miles traveled fees than their wealthy counterparts. This is fundamentally unfair and targets those who can least afford to pay the fee,” wrote Senate Republican Scott Wilk in a 2021 opposition letter for the pilot program.
Manville points out the current gas tax setup has many advantages.
“Anyone who buys gas pays [the gas tax]; it doesn’t matter where they live or if you know anything about their car,” Manville said.
He also highlights another advantage: the low administrative costs associated with running the gas tax, which means more funds go to infrastructure projects.
The state is a few years away from implementation as the pilot program just concluded. It still requires future legislation to become a reality.
Caltrans officials said they will analyze the collected data and release a final report to the state legislature and the public later this year.
