Caltrans Pilot Program: California Tests Tax Per Mile to Fund Road Maintenance

The Caltrans Pilot Program, that would tax drivers by the mile, is set to explore a new way to fund California road maintenance as gas tax revenue decreases.

Caltrans Pilot Program

California is launching a pilot program to explore a new way to fund road maintenance. As more drivers switch to electric and hybrid vehicles, the state is seeing less revenue from gas taxes. California is road-testing a brand-new approach to funding highway maintenance: a mileage-based tax system dubbed the California Road Charge.

As the gasoline landscape evolves, is it time to tweak the tax?

With over 1.2 million electric and hybrid cars in California, the state isn’t getting as much revenue from gas taxes. Caltrans rep Lauren Prehoda says it costs between $8 billion to $9 billion a year to maintain the roads. Gas taxes, collected when drivers fill up their tanks, have traditionally covered these costs. However, electric vehicles only pay a $100 annual fee, leading to a $200 million yearly shortfall.

How Will the Road Charge Work?

The California Road Charge would have drivers pay based on the number of miles they drive rather than the amount of gas they use. The proposed rates range from $0.02 to $0.04 per mile. However, the final rate hasn’t been decided yet.

Drivers can track their mileage in several ways:

  • Plugging an electronic device into their vehicle.
  • Using the vehicle’s built-in tracking system.
  • Submitting photos of their odometer.

To account for individual differences in data privacy concerns, Prehoda recommended making multiple tracking options available, letting users decide how much they’re willing to share.

Details of the Caltrans Pilot Program

Starting in August 2024, the pilot program will run for six months. Participants will be selected in July. Interested drivers can sign up on the California Road Charge website. Those chosen will track their miles, make monthly payments, and complete two surveys. The state will refund their gas tax or EV fee and provide up to $400 in gift cards to participants.

Tax Per Mile Impact on the Trucking Industry

Truck drivers and the trucking industry will likely feel the pinch of a mileage-based tax system. Currently, truck drivers pay for road maintenance through fuel taxes and weight fees. Reimagining the system might spread costs more evenly.

Rural truck drivers, who often drive longer distances in less fuel-efficient vehicles, could benefit from this change. Driver expenses might take a dive under the Road Charge, studies suggest. The reason? This system recasts the cost structure to focus on miles driven, rather than other factors.

Moving Towards Sustainable Funding

California needs a sustainable way to fund road maintenance as vehicles become more fuel-efficient and the state pushes for zero-emission vehicles. The gas tax will continue to decline, so a per-mile charge could ensure all drivers contribute fairly to road upkeep.

The pilot program will tackle two pressing concerns head-on. First, will our data remain private? Second, can we realistically put this concept into practice? Efficiency, fairness, and privacy – these are the core values guiding the Caltrans Pilot Program  and the development of a new tracking system. Their strategy? Test drive different methods and incorporate user feedback to create a system that truly delivers.

Looking Ahead

California’s Caltrans pilot program is exploring a mileage-based tax system as an alternative to the gas tax. What will we learn from the six-month pilot? Hopefully enough to determine whether California should ditch the gas tax in favor of the Road Charge. This initiative reflects California’s efforts to adapt to the changing automotive landscape and could serve as a model for other states facing similar challenges.


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