By Loren Kaye
President of the California Foundation for Commerce and Education
Thursday, February 18th, 2016
California’s transportation finance system is running out of gas. Not literally, but the buck or two for each gas station fill-up is getting much less bang than it did a decade ago.
The Governor and Legislature are debating how to resolve a $5.7 billion annual mismatch between revenues and spending for road and highway upkeep. But any short-term fix reliant on the gasoline tax will only be a stop-gap measure.
Taxation of gasoline is inadequate to meet the needs for system repairs and improvement because gasoline use is becoming disconnected from road use. In a triumph of technology and market forces, cars have become far more fuel efficient, driving down revenues from the gas tax. Public policy is also lining up against the internal combustion engine, which is the sole consumer of taxed gasoline.
Recognizing the long-term inadequacy of taxing gasoline, state leaders have agreed to a recommendation from a panel of private citizens to test the next generation in road finance – a fee based on the actual use of the state transportation network that puts a premium on user choice and personal privacy protection. In the spirit of a true user charge, the proposal envisions a broad application of the mileage fee, with no exemptions and no rate differentials – at least in the testing phase.
The Committee also anticipates the user fee would be set at a rate to offset the gasoline tax. In other words, this fee would be a replacement revenue source, not an additional tax. Since the fee no longer depends on gasoline use, erosion of the tax base will stop, resulting in more funds for roads and highways over time.
This is where you come in. The state is recruiting volunteers – cars and trucks, from rural to urban – gathering data over a 9-month field trial to determine challenges and opportunities. (It won’t cost you a dime; no new fees will be collected.) The data will then be analyzed and reviewed by state transportation experts and officials, who will make a recommendation to the Legislature at the end of 2017. Your input on this project will be invaluable to improving it or scrapping it.
Your actual experience can help determine the future of California transportation finance. Want to sign up? Check out http://www.CaliforniaRoadChargePilot.com for details.