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California Committee to Consider Road User Charge

Gov. Jerry Brown has an environmental goal that conflicts with an infrastructure goal: reducing oil consumption and raising funds to pay for deferred road needs. The solution may be the Road User Charge, which lies in the hands of a new committee.
January 26, 2015, 12pm PST | Irvin Dawid
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The good news: Due to environmental regulations, vehicles are more fuel efficient, helping to attain one of Gov. Jerry Brown's three environmental goals he stated in his January 5 inaugural address (posted here) to be reached by 2030:

• Reduce oil consumption by 50 percent — largely by increasing use of electric vehicles (EVs).

The bad news: For those very same reasons, motorists are paying less in fuel taxes to fund one of the governor's three infrasture goals he mentioned in the same speech:

  • Tackling the enormous $59 billion problem of deferred highway and bridge maintenance.

The solution, according to the governor, is to "find another way to finance the upkeep of the roads," reports Paul Rogers of Inside Bay When asked specifically if that meant moving to a "Road User Charge," the actual mileage fee term used in the SB 1077 legislation (initially posted here) that he signed last September, Brown responded that was the only option being considered by the SB 1077 technical advisory committee.

Certainly that would create funds whether people use electricity or natural gas or whatever they use. They are still wearing down the roads.

According to Rogers, the Road User Charge "could solve the problem -- or cause a political pileup."

The idea is far from reality, but it's raising a hornet's nest of practical and political questions [two were posted here], from how government would track the miles to what happens when people drive out of state or on private roads.

Rogers, who writes for The San Jose Mercury News, reports that "Silicon Valley is getting involved early. The chairman of the California Transportation Commission, which chose the 15 members of the study panel [formally known as the California Road Charge Pilot Program Technical Advisory Committee], is Carl Guardino, CEO of the Silicon Valley Leadership Group."

Meanwhile, Oregon's transportation department [which will begin the nation's first mileage fee program this summer] announced this month it has signed a contract with a San Jose company, Azuga that makes GPS tracking devices that plug in below a vehicle's dashboard.

Electric vehicles pose a conundrum. EV owners often oppose the road user change, stating that the solution is to raise the gas tax instead (as does one EV owner in the article), which, of course, is easier said than done. In fact, the political inability to raise the 36-cent gas excise tax, the main means of state road funding which hasn't been effectively raised since 1994, is one of the driving forces behind mileage-based user fees

California has more than 100,000 electric cars on the road now. That's less than 1 percent of the 23 million cars in the state. But electric vehicles -- whose owners pay no gas tax -- represented 3 percent of new car sales last year.

Furthermore, Gov. Brown signed a 2012 executive order to put 1.5 million electric vehicles on the road by 2025, so it's likely that number will be increasing.

Regardless of how much, or little EVs are to be credited (or blamed for the drop in gas tax revenue), "the amount of gasoline sold in California peaked in 2003, at 15.9 billion gallons," writes Rogers. [Planetizen posted here that it peaked at "nearly 16 billion gallons in 2006."]

It has fallen steadily since then, despite population growth, to 14.6 billion gallons in 2013, a drop of 8 percent. And as people have bought less gasoline, state gas tax revenues have fallen from $2.87 billion in 2003 to $2.62 billion in 2013.

However, oil consumption in California and the United States is on the upswing as are vehicle-miles traveled in California and the United States, a result of plummeting gasoline prices and an improved economy.

Surprisingly, Rogers makes a comparison of gas taxes to cigarette taxes that would appear misfitting.

Like cigarette tax revenue that falls as fewer people smoke, the gas tax is a victim of California's success in reducing oil dependency.

As Rogers explained earlier, declining gas tax revenues are primarily victim of political reluctance to raise the state gasoline excise tax since 1994, not at reducing oil dependency—96 percent of California's transportation fuel is petroleum-based. By contrast, less than 12 percent of California's adult population smokes.

As road construction expenses rise, the gas tax needs to increase. Due to falling gas prices, some states are mustering the political will to raise, if ever so slightly.

California instituted a one-of-a-kind wholesale carbon charge on petroleum-based transportation fuels of about 10-cents per gallon on January 1. However, none of the revenue will be used to meet the governor's infrastructure goals. The revenue will be directed to the Greenhouse Gas Reduction Fund rather than the Highway Users Fund.

Full Story:
Published on Saturday, January 24, 2015 in Inside Bay
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