Pay per mile for California roads and infrastructure – Capitol Weekly | weekly capitol

Keeping the roads free of potholes has been a challenge in California for decades.

But an unusual solution has emerged – a kilometer charge for motorists, called a road user charge, with the money going to build and maintain infrastructure, including roads and highways.

Four years ago, the state authorized a little-known pilot program for the Road Use Charge, or RUC, and 5,000 motorists participated in it over a nine-month period.

Currently, California has the highest gasoline taxes in the nation, with a total of approximately $1.18 in state and federal taxes and fees charged on every gallon of gasoline pumped.

“The pilot program confirmed the viability of many aspects of a mileage-based funding mechanism but did not test actual revenue collection,” according to legislative legal analysis. “Revenue collection was simulated in the pilot program through fictitious invoices and payments.”

Revenue is crucial. How should it be tracked and collected? Should it replace the existing state fuel tax per gallon, or should it be added to the existing tax? Gas prices are already high, irritating California motorists. So is the RUC politically feasible, given that this tax already goes to building and maintaining roads?

Currently, California has the highest gasoline taxes in the country, with a total of approximately $1.18 in state and federal taxes and fees charged on each gallon of gasoline pumped.

The federal government receives 18.4 cents per gallon in excise taxes; California charges 50.5 cents in excise taxes per gallon, which includes a recent increase of 12.7 cents specifically for infrastructure and transportation programs. It also charges variable sales tax, which averages about 10.7 cents per gallon, but differs by region.

In addition to taxes – a total of about 80 cents per gallon – there are several fees. These include a charge of 2 cents per gallon for underground storage tank security, 14.3 cents for the state’s cap and trade program, and about 22.6 cents for the water protection program. Low Carbon Fuel Standard environment.

Senator Scott Wiener, a Democrat from San Francisco, drafted SB 339, which Governor Newsom signed in September. The bill extends the pilot program, requires California Transportation to develop a working RUC system, and keeps a technical advisory committee in place at Caltrans to also review the issue.

A 2017 report said out-of-state driver fees would not be collectible without a gas tax.

However, nothing happens immediately: the final report to the Legislative Assembly is not expected until 2026, with an interim report two years earlier.

Although California, who has nearly 400,000 miles of track across the statereplaces its fuel tax with a road user charge, motorists could still be liable for federal gasoline taxes, over which California has no control.

And there is some confusion over how RUC money should be raised.

On the one hand, the state says it is considering using the RUC to replace the petrol tax.

But a 2017 report said out-of-state driver fees would not be collectible without a gas tax. It was therefore suggested in the report that the gasoline tax could remain in place and that Californians should seek reimbursement for any sales tax charged to them under an RUC program.

The original pilot project legislation was contained in AB 1077 by then-Congressman Senator Mark Desaulnier. His bill stemmed from a funding shortfall discovered by Caltrans resulting from increased adoption of zero-emission vehicles in 2010.

The bill authorized Caltrans to begin researching the feasibility of an RUC in addition to a pilot program to help see how the RUC would actually work if it went into effect.

Caltrans also oversaw the creation of a 15-member RUC Technical Advisory Committee to advise Caltrans on specific RUC system issues, including alternative programs, collections, and the potential dollar amount of any RUC.

One option is to use mileage data already tracked by insurance companies, while the other requires an annual odometer reading.

Caltrans released a road user charge report, which estimated that nearly 20% of the revenue generated by the RUC would be lost when collecting the charge.

The RUC would cost more per kilometer driven than the current petrol tax, because the existing tax is automatically covered every time a driver puts petrol in the tank.

But RUC is based on mileage tracking, and two main options have evolved.

One is the use of mileage data already tracked by insurance companies, while the other requires an annual odometer reading. Both of these methods have been suggested due to their low inherent cost.

An earlier, but more expensive possibility is the use of GPS transponders. These could track motorists whether they are in or out of state.

Adding to the complexity: Taxes are collected at the wholesale level from oil refineries in a gasoline tax model. Under a system of road user charges, the collection of taxes is passed on to the consumer.

Critics argue that the RUC denies the financial benefits of owning zero-emission vehicles.

Additionally, due to the large number of vehicles on California roads, approximately 15 million registered vehicles alone, the state opted instead to forego collecting the tax internally and planned to bring in account managers. private companies to collect the tax from motorists. These private account managers would be responsible for verifying miles driven, issuing statements and collecting payments.

Those most affected by RUC are commuters and owners of low- or zero-emission vehicles.

Currently, the state encourages the purchase of electric vehicles through rebates. Last year, the governor signed Executive Order N-79-20, banning the sale of new cars with internal combustion engines by 2035.

But critics argue the RUC denies the financial benefits of owning zero-emission vehicles.

In addition to EV registration fees, EV owners have enjoyed not paying vehicle use taxes that fund the roads. Like electric vehicle owners, hybrid owners have also saved a lot on gas taxes due to the strong fuel economy offered by their vehicles.

As currently expected, RUC charges would likely be paid via a statement similar to a utility bill or perhaps an annual lump sum payment.

However, many in the transport world note that for the roads to be funded, non-petrol vehicles must pay some form of tax, including the RUC, to fund the roads.

The other group most affected by RUC are commuters.

The average American drives thirty miles a day to and from work, and in California that average is significantly higher.

At a rate of 1.8 cents per mile traveled, which has been proposed, a commuter can expect to pay $5.76 per day for their ride, $28.8 per week, $115 per month, with a total $1,382.4 annually in mileage charges. Super commuters who travel more than 120 miles per day round trip can expect to pay $21.6 per day for their ride. This figure does not include kilometers traveled for pleasure by motorists.

Commuters are already paying more to drive due to their above-average purchase of petrol, and the RUC would fundamentally change the way motorists budget.

As currently envisioned, the RUC fee payment schedule would likely take the form of a statement similar to a utility bill or, as with an odometer reading, an annual lump sum payment.

Requiring one-time payment of fees could significantly affect low- and middle-income motorists.

That’s why Caltrans is actively looking at things like caps, taxable miles, or different mileage charges based on income level.

The RUC state pilot program with more than 5,000 volunteers is taking a big step this year to raise revenue.

“Our goal is to create a system for the legislature to consider what is fair, transparent, and sustainable over the long term and works for all of California,” said Lauren Prehoda, Caltrans’ RUC program manager.

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About Robert Pierson

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