Falling Gas Tax Revenue Has California Lawmakers Considering Mileage Tax Plan

SAN FRANCISCO (CBS SF) — With an increase in electric and hybrid vehicles along with better fuel-efficient vehicles, changing Bay Area drivers habit are posing a serious problem for state coffers.

As motorists use less and less gas, gas tax revenues to pay for state highways, roads and bridges shrink. Meanwhile, as gas prices fall, so does the sales tax generated by fuel sales. In California, among the taxes collected on fuel is a 2.25% sales tax on gasoline and a 9.67 percent tax on diesel.

Some state lawmakers feel a mileage tax is the best solution.

To pay for the shortfall, California officials are considering a plan that would replace California’s gas tax with a fee for each mile motorists drive. Drivers who log the most miles will end up paying the most, no matter how fuel efficient their car is.

In 2003, revenue reached $2.3 billion. In 2013, it was $2.62 billion. Governor Jerry Brown says there is a $59 million backlog on highway maintenance.

A 1.5 cent mileage tax is already being implemented in a test program in Oregon. Similar programs are under consideration in Colorado and Washington.

The plan has supporters and detractors across the political spectrum.

The current state gas has remained at 36 cents a gallon since 1994. The federal gas tax has been 18.4 cents a gallon for more than 20 years.

 

EDITOR’S NOTE: An earlier version of this story highlighted dropping sales tax revenue affected by falling gas prices.  The current version has been rewritten to emphasize that it is the overall reduction in the use of gasoline as the primary factor in driving this legislation.

 

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