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California considering replacing fuel tax with mileage tax

| June 12, 2014

California could become the third West Coast state to test the feasibility of replacing state fuel excise tax with a vehicle-miles-traveled fee.

On June 2, the state assembly’s transportation committee received SB 1077 after the Senate approved it by a 23-11 vote. The measure would require the California Transportation Agency create a voluntary pilot program by 2016, but the CTA would not be permitted to collect fees.


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The state’s transportation funding is supplied mainly through fuel excise and sales taxes. California requires revenue from the base 18-cent-per-gallon fuel excise tax be used for maintaining and operating the state highway system.

Gasoline excise tax revenue from above the base revenue is used mainly for streets, roads and new capacity projects. The state’s diesel sales tax is dedicated to supporting transit operations.

Fuel excise taxes are relatively inexpensive to administer because it is collected from a small number of fuel wholesalers nationwide, according to a California legislative analyses. Over two fiscal years, more than $1 million annually would be needed to test and implement VMT that May 23 report stated.

In 2007, nearly 300 volunteers tested Oregon’s VMT pilot program at a cost of $3 million. Estimates were not readily available for its 2012-13 program, which enrolled 100 participants in three states.

In 2015, Oregon will implement a voluntary program to allow 5,000 vehicle owners to pay a per-mile road charge of 1.5 cents per mile instead of fuel tax. The state’s annual administrative costs for the program are expected of to be $1.4 million annually.

  • Mark French

    Time to leave California and not come back!

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  • USMC 69-75

    Quit CA a long time ago! Bet they will contiue collecting tax at the pump, just won’t credit it back to you!

  • centerlaneshow

    Time for Californians to buy Horses

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  • augie1025

    Is it me or is this democratic system just not working. It seems like we have the few people in congress or elected office making al the rules and laws and we just keep eating it, So basically the answer for all the incompetence in government is throw a money bomb at it. Get rid of some red tape and start doing some work and we can fix these problems. Don’t get me wrong about democracy… all I’m saying is that more and more it seems like none of us have any say at all. It’s just somebody in office trying to make a name for themselves..It’s basically one person saying look I have an idea and a couple of others saying okay and we all end up paying millions. Then 10 years later we might find out these people were in a conspiracy…. too late, law is already passed. How the heck do we stop this total control

  • Mark M

    Then you’ll be paying a feed tax, a stable tax, and an actual horse crap tax.

  • John Miller

    Ah…..maybe my math is off, but if you have a car getting 36 HWY MPG, you are currently paying 1/2 cent per mile. Why would you agree/volunteer to pay a 1.5 CPM and triple your costs?
    I always knew this was coming when they started pushing electric cars. My first thought was if everyone goes electric, no one is paying the gas tax and then there is no money for roads….there is no free lunch.

  • steve4447

    I have to wonder who you think should pay for that roads that you drive on in California???

    The people in Florida or Iowa?..Maybe New York?

    And USMC 69-75 How does California collect gas tax from you at the pump if you don’t drive there???

  • randy

    Then CARB would come up with some sort of methane tax requiring you to count every time the horse farts and craps.

  • Glen

    First this country is a democratic republic and not a democracy.

    Secondly I agree with the mileage/use tax as lOng as it is used properly. It requires all vehicles, gas, electric, LNG etc to pay for using the road. I have a hard time understanding why people would be opposed, as long as the taxes were removed from fuel prices to avoid double taxation.

  • Glen

    Fuel taxes are still based on 8mpg and that is part of the reason for the shortage of highway funding. Misappropriating funds is a big reason too.

    Who’s paying for the electric and alternative fuel cars running down the highways now?

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