Wednesday, February 1, 2023

You Can Help Reform How California Pays for Roads, Highways

shutterstock_133461689California’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 be only a stop-gap measure.

Gas Tax Inadequate

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 also is 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 panel 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.

Volunteers Needed

This is where you come in. The state is recruiting volunteers—drivers of 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 for details.

Contact: Loren Kaye

Loren Kaye
Loren Kaye
Loren Kaye was appointed president of the California Foundation for Commerce and Education in January 2006. He has devoted his career to developing, analyzing and implementing public policy issues in California, with a special emphasis on improving the state's business and economic climate. He also was a gubernatorial appointee to the state's Little Hoover Commission, charged with evaluating the efficiency and effectiveness of state agencies and programs. Kaye served in senior policy positions for Governors Pete Wilson and George Deukmejian, including Cabinet Secretary to the Governor and Undersecretary of the California Trade and Commerce Agency. See full bio.

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