California revenue plan would charge drivers by the mile

By Keith Goble, Land Line state legislative editor | Tuesday, July 29, 2014

An effort at the California statehouse to change how the state raises revenue for transportation work could soon come up for consideration.

The Legislature returns from summer break next week. One issue that is likely to be addressed in the weeks ahead 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 as people are driving vehicles that get better mileage.

The bill awaits further consideration in the Assembly Transportation Committee. Senate lawmakers already approved it on a 23-11 vote.

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.

DeSaulnier said his proposed pilot program is a reasonable approach to address the impending fiscal cliff for transportation funding.

“We have to look at these kinds of things as Oregon and Washington have in anticipation of this cliff we’re about to go off,” DeSaulnier told Senate lawmakers prior to the floor vote.

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 bill analysis concedes 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.”

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