California Considers Mileage-Based Tax System Amid Declining Gas Tax Revenue
California is reportedly considering a tax system that charges drivers based on the miles they drive rather than the fuel their cars consume.
California, known for high gas prices due to its gas tax, has been facing declining revenue as more drivers switch to electric vehicles. As the state has pressured consumers into buying electric vehicles, and 1.2 million EVs are now being used, California is seeing a substantial revenue drop from the gas tax.
According to Newsweek, the state estimates predict a potential loss of over $4 billion in the budget over the next 10 years.
California Department of Transportation (Caltrans) spokesperson Lauren Prehoda explained that “On average, Californians pay about $300 a year in state gas taxes.” However, “EVs have a $100 (annual) registration fee,” which amounts to a $200 million a year loss for the state.
In response to this severe budget issue, California is recruiting participants for a mileage tax pilot program, offering volunteers up to $400. The tax will cost approximately 3 cents per mile driven.
Participants will be able to either submit odometer readings manually to the state or even install a tracking device in their vehicle that monitors how many miles are being driven.
“Everyone has different levels of comfort when we’re managing our data between efficiency and privacy, and that’s why it’s really important to have options from low tech to high tech,” Prehoda said. Should this pilot program prove to be successful, California’s state legislature could decide to implement the policy state-wide as an alternative to the current gas tax.
