California law extends vehicle miles traveled pilot program

October 1, 2021

Keith Goble


California Gov. Gavin Newsom has signed into law a bill to extend the state’s mileage tax pilot program.

Since 2015, the program allows the state to study a road user charge based on vehicle miles traveled as an alternative to fuel taxes.

Instead of paying at the pump when purchasing fuel, a mileage tax system determines a driver’s vehicle miles traveled with an in-vehicle device, regular reporting of the odometer, or through various other methods. Participation is voluntary.

Extension touted

The Democrat-led Legislature voted during the regular session to approve a bill to continue the program through 2026.

Gov. Newsom put his signature on the bill, SB339, to include an actual fee collection program to reimburse participants the amount they would pay in fuel taxes over that time.

Sen. Scott Wiener, D-San Francisco, said with the state’s transition to more fuel efficient vehicles – and ultimately away from carbon-fueled vehicles entirely – fuel tax revenue will decline and eventually end.

“Road usage charges can replace gas taxes and ensure we can continue to fund our roads,” Wiener said in a recent news release.

Wiener said the mileage tax pilot program will allow state agencies to evaluate and refine the approach for future consideration of broader application.

The legislation follows a recent executive order from the governor to ban the sale of new internal combustion engine vehicles by 2035.

“The road charge pilot program offers an alternative option for transportation and road funding,” Wiener said.

Critics question the need

Critics of the program say replacing the current fuel tax with a mileage tax would negatively affect people who must commute. Senate Republican Leader Scott Wilk of Santa Clarita said the state already has the highest fuel prices in the nation.

Sen. Pat Barnes, R-Laguna Niguel, added that the state needs better spending priorities and not more taxes.

OOIDA opposes mileage tax

The Owner-Operator Independent Drivers Association is opposed to the pursuit of a vehicle miles traveled tax.

“OOIDA and an overwhelming majority of our members have opposed VMT since the beginning. It’s the wrong way to fund our infrastructure,” said OOIDA Director of State Legislative Affairs Mike Matousek.

“We also suspect trucks would be singled out in the form of excessive and unaffordable per mile rates if something like this is ever implemented nationwide, in California, or any other state in the country. While our current system of fuel taxes isn’t perfect, it’s certainly better than a VMT. The bigger issue is how our tax dollars are being spent, not necessarily the amount of taxes being collected.” LL

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