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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.

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  1. […] (Source: Overdrive) SB1077 was received by the assembly Jun 2, and would test the possibility of replacing the state fuel-excise tax with a vehicle mileage tax. Read full article […]

  2. […] California is considering switching from a state gas tax to a vehicle-miles-traveled (VMT) fee, our sister site Overdrive reports. […]

  3. […] signaling California’s interest the State Senate passed this June a bill – SB 1077 – to authorize a voluntary road usage charge pilot by 2016. After senate […]