California one step closer to charging drivers by the mile

By Keith Goble, Land Line state legislative editor | 6/6/2014

A bill halfway through the California statehouse could change how the state raises revenue for transportation work.

The Senate voted 23-11 to advance a bill to the Assembly that would set up a voluntary program to test a new way to get money from highway users.

Specifically, SB1077 would establish a pilot program in the state to assess the practicality of taxing truckers and other drivers based on vehicle miles traveled in the state. The VMT would replace the state’s fuel tax because people are driving vehicles that get better mileage.

Sen. Mark DeSaulnier, D-Concord, says the excise tax is unsustainable. He describes his bill as “a critical first step toward California considering a mileage-based fee” as an alternative to the excise tax on fuels.

Oregon and Washington are testing similar programs.

The Owner-Operator Independent Drivers Association is on the record as opposing the bill. The Association sent communication to California lawmakers conveying the concerns of professional truckers.

OOIDA Director of State Legislative Affairs Mike Matousek told lawmakers the Association supports investments into transportation infrastructure.

“However, if additional revenue is needed, increasing the fuel tax is the most equitable and efficient option, so long as the generated revenue is used for its intended purpose,” he said. “The method for collecting fuel taxes works. It’s simple, there are no privacy concerns, and it doesn’t require the installation of new technologies.”

The bill analysis notes that collecting a fee from each individual driver, or vehicle owner, “would be inherently more complicated to administer.”

The state spends about 1 percent of incoming revenue to collect the fuel excise tax, according to state figures. In comparison, a state-level mileage-based fee could cost about 5 percent of incoming revenue.

Senate analysts say that despite the increased administrative costs a mileage-based fee, or tax, would “yield far more net revenue over the coming decades than the fuel excise tax” because of more fuel-efficient and alternative-fueled vehicles.

Matousek said he pointed out to lawmakers the Association recognizes that hybrid and alternative fuel vehicles are more efficient, which results in less fuel consumption and less fuel tax revenue for the state.

“If the issue requires attention, perhaps it should be addressed by a vehicle- or fuel-specific fee rather than imposing another tax on truckers and the vast majority of motorists that use a system that works.”

The state Department of Finance is on the record with state lawmakers as opposing the bill because it is “unnecessary.”

At a recent hearing on the bill, Senate Appropriations Committee members were told the California State Transportation Agency already has authority to implement any information gathering pilot program to explore alternative funding methods.

SB1077 is scheduled for a hearing on June 23 in the Assembly Transportation Committee.

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