California Green-Lights Roadway Usage Charge Pilot Program

This article is part of VTA’s “Investing in Transportation” series, which will explore how VTA is working at the local, state and federal level to secure investment in an innovative, intelligent and interconnected transportation system to carry Silicon Valley into the future.

Governor Jerry Brown has signed a bill that will start a roadway usage charge pilot program that could replace the state gas tax. We’ve been following the development of this bill and pilot program and will monitor its implementation because shrinking revenues from the gas tax is one of major challenges in transportation funding.

This bill, SB 1077 by Mark DeSaulnier (D-Concord), creates a pilot program to assess whether a roadway usage charge is a feasible replacement for the state gas tax. The program would be managed by the California State Transportation Agency, which has until June 2018 to submit a report to the Legislature about the pilot program and its findings.

A roadway usage charge would link the amount of taxes a motorist pays directly to the number of miles that motorist drives. This would represent a significant change that raises questions about collection cost, privacy and other policy issues. The bill and pilot program are the first steps in what is likely to be a lengthy process for considering whether California should implement a roadway usage charge.

What’s the problem with the gas tax?

Part of the problem is that in spite of it being the single largest source of transportation funding, the purchasing power and revenue generated by federal and state gas taxes—18.4 cents and 39.5 cents, respectively, per gallon—is shrinking every year due to inflation. A 1995 dollar is worth 55 cents today. Increased fuel efficiency, electric vehicles and Californians’ efforts to cut back on driving also mean less gas tax revenue.

Leaders in Sacramento and Washington, DC, are aware that increasing the gas tax would only be a stop-gap solution and have no gas tax increases planned.

Meanwhile, as VTA’s Government Affairs staff will report Nov. 6 to VTA’s Board of Directors, California’s unfunded transportation needs continue to increase. In a 2011 needs assessment, California identified $300 billion in unfunded transportation needs over 10 years and has no clear plan of how to pay for it. Santa Clara County alone has $25 billion in unfunded transportation needs over the next 25 years.

Many state policy makers are reaching the conclusion that the gas tax is no longer a viable, sustainable revenue source for transportation in California.