LA Times. As Californians drive increasingly more fuel-efficient cars, state officials are alarmed that the gasoline tax will not raise enough money to keep up with road needs. As a result, California is considering replacing its state gas tax ($0.18/gallon) with a tax on every mile traveled by each car and truck. Devices placed on every vehicle would track where, how far and when vehicles travel.
For the state budget, the trend looks grim. Revenue from the gas and diesel fuel tax—about $3.3 billion—will have declined 8% between 1998 and 2005, adjusted for inflation, but the amount of miles traveled by cars and trucks on California roads has increased 16%, according to a February report by the legislative analyst. The California Transportation Commission has said the state needs about $100 billion in road and freeway repairs.
The new director of DMV for California has advocated this pay-per-mile approach in the past. From a policy point of view, the tracking could support variable pricing for congestion management—i.e., charge a higher rate per mile for rush hour freeway use.
To be truly equitable from the perspective of allocating the cost burden for road repair proportional to use, the policy would have to factor in weight as well. In other words, a Class 8 truck rumbling down a highway is going to cause more road wear than a Honda Insight skimming along a residential road.
If this is implemented, the contract for developing the complex IT and communications infrastructure that tracks, calculates and bills all this is going to be immense. It was tough enough getting electronic toll payments on the bridges around San Francisco.
At this point in time, though, this proposal is a bad idea— it neutralizes financial benefits for fuel efficiency and alternative fuels. The concern about revenue generation for road maintenance should not obscure the longer-term need for policies that encourage changes in driving behavior for the better—i.e., toward the sustainable. Fuel efficiency and low-carbon approaches should be rewarded (or high fuel consumption and high carbon emissions should be penalized, whichever your perspective). In the future of renewable, non-polluting transportation, by all means, tax mileage. But not now, or at least not solely.
There is a much simpler way to do this. Just raise the fuel tax. That would have the double benefit of re-filling the maintenance coffers while maintaining a sharper incentive for moving toward fuel efficiency and alternatives.