California weighs charging motorists based on how often they drive; electric car owners could pay more
(Photo by Marco Verch)
California transit officials are considering new ways to raise much-needed revenue for road and infrastructure improvement projects, including the possibility of charging motorists through a use fee that is tracked through global positioning systems (GPS).
The project was outlined in a report published on Sunday by the Daily Republic newspaper and is funded in part by a $2.15 million grant awarded by the federal U.S. Department of Transportation.
Traditionally, road repair and infrastructure-related projects have been funded through taxes levied on the purchase of fuel. But as cars become more fuel efficient and more drivers choose electric or hybrid electric-gas vehicles, the amount of tax collected by the state has dropped significantly, officials claim.
That’s a problem, officials say, because all-electric and hybrid vehicles contribute just as much to traffic and road wear as traditional all-gas vehicles — and, in some cases, even more wear — but don’t contribute as much to gas tax revenues for obvious reasons.
For this reason, state officials started studying use-based fees during a pilot program launched in 2016. One transit official who spoke with the Republic said the pilot was “very successful” and prompted the state’s transit agency to explore other use-based programs that might help raise much-needed revenue.
One program being explored would use GPS logs obtained from a vehicle or a third party application to determine how often a motorist drives on California’s roads. Depending on how often the vehicle is driven combined with whatever figure state officials decide to charge per mile, the use-based program may actually save some drivers money compared to the traditional gas tax levied on all commuters who fill up at the pump.
On the other hand, some drivers who depend on their vehicles to take them further each month may wind up spending more money compared to the current gas tax. That could be especially true for drivers of all-electric vehicles, who may see an additional fee levied simply because they drive a certain type of car.
Electric car drivers have already been the target of the state’s attempt to generate new forms of revenue: Starting last year, the state began charging those who purchase new electric vehicles a one-time fee of $100. The fee was set three years earlier in new gas tax legislation known as Senate Bill 1.
Critics have argued that the fee could be viewed as a penalty, and at least one study revealed that fee and others could result in a downturn in the sale of electric vehicles in California by as much as 24 percent.
In 2019, a pair of U.C. Davis researchers wrote a commentary for the non-profit policy news outlet CalMatters arguing that the state’s shortfall in transportation-related revenues was not a result of electric vehicle purchases, but rather misplaced political priorities.
“At the state level, electric vehicles pay other taxes such as sales and registration fees that actually offset lost fuel-tax revenue, especially given high electric vehicle average purchase prices so far,” the researchers argued, pointing to studies in two states — California included — that revealed electric vehicles “actually generate at least as much revenue on a per-vehicle basis for states as gas-powered vehicles do.”
The researchers concluded that usage-based fees — like the ones being explored by California transit officials — would be a fair and equitable way to raise revenue for roadway maintenance and infrastructure repair and build-out projects.
“Usage-based charges would distribute the cost burden for transportation infrastructure more fairly than flat fees by placing a greater share of the burden on those who account for a greater share of infrastructure use,” they argued. “Such charges also would help decrease congestion and emissions by creating a direct financial incentive for people to drive less.”
But the usage-based fees wouldn’t be progressive if they disincentivized electric vehicle ownership at the same time, the researchers said.
“Imposing new fees on electric vehicles now could disrupt the momentum that is slowly building in the market for more efficient, sustainable vehicles,” the researchers wrote.
State officials are still exploring ways to generate new revenue, and any new plan proposed by California’s transit agency would need legislative approval before it rolled out to drivers.
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