Should California drivers get charged by the mile?

California’s Department of Transportation is studying data to potentially create a per-mile road charge that drivers across the state would pay.

Backers say it’s worth considering because revenue collected from the primary source of funding for roads and highways — the per-gallon excise tax charged at gas stations — keeps declining because of more fuel-efficient cars and trucks and the growth in adoption of electric vehicles.

The plan has a lot of critics, especially locally after the San Diego Association of Governments tried a similar program, who argue the state is only in this position because of mismanagement of funds.

Utah now has a program in place where drivers of electric vehicles or hybrids pay an annual fee of $143.25 or they can voluntarily enroll in the Utah Road Usage Charge Program and pay 1.11 cents per mile. Drivers in the program will never pay more than $143.25 in a given year, which benefits motorists who drive less.

Question: Should California drivers get charged by the mile?

Economists

James Hamilton, UC San Diego

NO: California already has the highest gasoline tax rate in the country. We need to learn to live within our budget rather than always try to find new funds to spend. Only about half of California gasoline tax revenue goes to road construction and maintenance. Our administrative costs and costs of construction per mile are much higher than other states. Spending on the infrastructure required to track mileage would be a new way to waste the taxpayers’ money.

Norm Miller, University of San Diego

YES: Despite the fact that we only drive EVs, I do believe it is essential to start charging drivers based on something aside from gas purchases, lest our road maintenance funds continue to deteriorate. The Utah plan of 1.11 cents per mile would result in a fee of about $120 a year for someone driving 11,000 miles a year. Vehicle weight matters but maybe that is too complicated? Ex: Highlander weighs 4,250 pounds, Tesla-3 3,891 pounds, and a Smart Car comes in at 1,650 pounds.

Caroline Freund, UC San Diego School of Global Policy and Strategy

YES: All drivers should pay for roads. Currently, gas taxes are funding transportation infrastructure, which has helped advance the shift to electric vehicles. Given the associated decline in tax revenues, it makes sense for all users to pay for roads. The point should not be to increase total revenues, but to ensure sufficient funds for maintenance and construction, while placing more of the burden on gas vehicles, during the transition to clean energy.

Kelly Cunningham, San Diego Institute for Economic Research

YES: Only so long as the tax replaces existing gas taxes instead of piling yet more on to already existing highest taxes in the nation. Paying for maintenance, improvement and new infrastructure would be much more equitably financed by usage, rather than as proxy from taxing energy produced for powering vehicles. The temptation to impose more taxes, however, would seem nearly irresistible for lawmakers to add additional tax collections to spend on never-ending envisioned causes.

David Ely, San Diego State University

YES: The decline in revenue from the gasoline excise tax will increase pressure to find alternative ways to fund the maintenance of highways and roads. Eliminating the gasoline excise tax and instituting a per-mile charge has the advantages of more closely aligning the fee paid by drivers to their actual use of highways and roads and can be calibrated to vehicle weight and fuel efficiency. Pilot programs have been conducted and offer insights on implementation.

Ray Major, economist

NO: Although the vehicles miles traveled fee is positioned as a replacement revenue source for the gas tax as California moves to an all-electric fleet, it is much more than that. It is a mechanism that will be used to force changes in driving behavior by using surge charges like Uber, and by charging different amounts based on time of day, GPS coordinates, income and other factors. This gives too much power to Sacramento. Other solutions need to be explored.

Executives

Gary London, London Moeder Advisors

YES: But I would favor a gradual step down from gas tax to mileage tax that is pegged against the use of electric vehicles. Electric vehicle sales in California are mandated to be phased in, with a 100% sales requirement by 2035. I recommend that the state substitute one tax for another according to a schedule that tracks this transition. The goal would be to make the transition revenue neutral.

Bob Rauch, R.A. Rauch & Associates

NO: Charging drivers by the mile is unfair and burdens those who commute longer distances for work or family. It disproportionately affects rural and lower-income families, creating financial strain, while also raising concerns about privacy due to tracking mileage. Instead, California could explore alternative solutions, such as adjusting road funding methods, promoting eco-friendly vehicle incentives, or reassessing spending on poorly implemented homelessness programs and specific Medi-Cal health care initiatives to prioritize effective use of taxpayer money.

Austin Neudecker, Weave Growth

NO: Californians already pay the highest gas tax in the nation at 60 cents per gallon. Adding a regressive per-mile charge would disproportionately burden small businesses and lower-income drivers. A more equitable solution is to reform existing taxes, improve budget transparency and explore modest fees for electric vehicles. We shouldn’t send mixed signals about the importance of transitioning to fuel-efficient transportation with punitive new fees that undermine public trust and affordability.

Jamie Moraga, Franklin Revere

NO: California already has high taxes and a tough business climate. Charging drivers by the mile, especially without caps, would increase costs for everyone — from small businesses to delivery services — ultimately raising prices for consumers and making the state more unaffordable. This could push more people and companies to leave for states with better policies and quality of life. There’s also no guarantee that the extra revenue would properly address the issue versus being mismanaged or diverted elsewhere.

Phil Blair, Manpower

YES: Or some other method that lets electric car owners pay their fair share. As the owner of only electric cars for many years I felt guilty driving by gas stations and scoffing at the prices, and not paying my fair share for road maintenance. Rental cars follow your mileage so why not Caltrans?

Chris Van Gorder, Scripps Health

NO: A per-mile tax was not approved in San Diego and it’s likely not to be approved statewide. If electric cars are the issue, develop a reasonable annual assessment for those vehicles since they are not contributing to road maintenance by buying gasoline. But that is likely to discourage the move toward cleaner air vehicles which defeats California’s environmental goals. Perhaps it’s time to re-evaluate all taxes.

Not participating this week: 

Alan Gin, University of San Diego

Have an idea for an Econometer question? Email me at phillip.molnar@sduniontribune.com. Follow me on Threads: @phillip020