Sacramento hits the gas on driving taxes

Sacramento hits the gas on driving taxes

state Gas Taxes Apr 2014Within a few years, California may choose to tax drivers by the mile. Taking up a controversial idea floated by the federal government and embraced by Oregon, Sacramento legislators recently passed a bill that could lead to a new “road usage charge.”

Senate Bill 1077 wouldn’t impose a driving tax right away. Instead, the legislation, introduced by state Sen. Mark DeSaulnier, D-Concord, would create a special group tasked to evaluate the tax. Through the California Transportation Commission, SB1077 would establish a Road Usage Charge Technical Advisory Committee. The committee would draft a driving-tax pilot program for the state Transportation Agency.

Taking the committee draft into account, the agency then would implement a final pilot program by Jan. 1, 2017. Finally, by June 30, 2018, the agency would formally report on the results of the program to the assorted committees involved.

The driving tax next door

With that four-year timetable, California legislators have opted to proceed at a measured pace. But in the Golden State and elsewhere, political interest in taxing drivers per mile has accelerated quickly. In Oregon, for instance, a pilot program has already been launched. Last year, Rep. Earl Blumenauer, D-Ore., floated a miles-driven tax; now, the scheme has begun to draw signups from citizen volunteers.

Oregon legislators decided to aim for 5,000 participants in the pilot program, the better to determine which method of mileage calculation to adopt. Initially, civil liberties groups bridled at potential calculation methods that relied on GPS readings, which could be accessed by law enforcement without a warrant. But Oregon moved away from those options, and the ACLU and others got on board with the program.

An infrastructure problem

Oregonians, especially along the Pacific Coast, have earned a reputation for small-footprint environmentalism. Their turn toward a driving tax, however, has been motivated by other factors. Like other states around the country, Oregon was recently forced to grapple with an unforeseen problem.

Despite a stopgap infusion of $11 billion, the federal government announced it will soon run out of money for its Highway Trust Fund. The federal gas tax has lost 40 percent of its value thanks to inflation; meanwhile, many state gas taxes have wound up in a situation nearly as bad, according to USA Today.

The weakening of gas tax revenues has teed up an unusual problem. Americans have long expected the quality of their highways to be maintained — free of tolls in most places — but they haven’t wanted to pay more. Although inflation has hurt the gas tax, the cost of gas has gone up, and basic foodstuffs have become more expensive over the same time period.

The problem could be solved by simply indexing state and federal gas taxes to inflation. But because the price of a gallon of gas is not indexed that way, Americans would be disincentivized to drive as much as they did before the tax increases.

Adding to policymakers’ woes, the rise of hybrid and electric vehicles — especially on the West Coast — has already chipped away significantly at gas-tax proceeds, with further erosion in sight. For example, because it’s entirely electric, a Tesla S pays no gas taxes.

That’s why Rep. Peter DeFazio, D-Ore., put forth a proposal to kill the federal tax at the pump and replace it with a per-barrel tax on oil, also indexed to inflation. With that approach, DeFazio argued, consumers would be sheltered from the direct impact of new taxes, as oil companies wouldn’t be able (or perhaps willing) to pass all the costs onto their customers.

Whatever the relative merits of the idea, DeFazio’s proposal hasn’t caught on in Congress. What’s more, it hasn’t captivated policy experts, who have enthused about the behavior-shaping potential of mileage taxes.

A system based on electronically calculated mileage would allow policymakers the theoretical power to calibrate driving taxes based not just on raw miles driven, but on routes, congestion and other factors. From that standpoint, the real potential of a driving tax would be as the first mile in a new expansion of government control over drivers’ activities.


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  1. Maxine
    Maxine 12 September, 2014, 16:47

    A recent editorial in our local weekly newspaper explained a very lucrative way for the state to make money on oil.

    “Currently California exports about a million and a half barrels of refined fuel every day. There are 42 gallons of gas in every barrel. The gasoline that is exported is NOT TAXED. If that fuel, for export, were taxed a dollar a gallon at the refinery, California would be able to pay of its $28 Billion Dollar Deficit in a little under a year.
    It only seems fair that those in other countries, who use our resources, should experience a tax for the pollution released into the air and for depleting the resources of the United States. There would, then, be no need to increase the taxes of hard working Americans to benefit others”

    This makes more sense than to constantly take more and more of our hard earned money. Penalizing drivers who drive long distances each day for work is wrong.
    And, if this happens, more and more of them will quit their work and go on assistance…..Then, WHO will pay the bills in Sacramento? Does anyone in the capitol have common sense?

    Reply this comment
    • ECK
      ECK 16 September, 2014, 21:39

      In answer to your last, no. But neither do you. This isn’t about “pollution” or resources, it’s about ROADS!

      Reply this comment
  2. Queeg
    Queeg 13 September, 2014, 08:01

    Representative government. Oh my!

    Your driving a Yugo sized car to cut gas costs in your personal budget. You risk a collision catapulting you two stories up in a roadside tree. Your family gets leg and rib cramps from being stuffed into a enviro friendly piece of shiny junk.

    Your State representative drives a Commissar approved Escalade. Wine and finger food all around.

    Your representated?

    Reply this comment
  3. Ricky65
    Ricky65 13 September, 2014, 08:45

    It’s all about continuing the war on the middle class and ruralites who moved further out of urban areas to secure a patch of green grass and backyards for their children. They moved out largely to flee crime ridden cities, crumbling schools and find affordable housing. The scarcity of housing close to job centers is caused largely by the imposition of “smart growth” policies by the ‘urban planners’ which limited affordable options and has driven the price of housing by creating an artificial scarcity of land.
    These hard pressed middle class folks are forced to live far away from their workplaces and drive long distances. They will now they will be pounced upon by the tax thieves in Excremento to further pick their already depleted pockets.
    It an unrelenting effort by the green gentry elite and their bought and paid for lackeys in the Dema-Rat party. The greens are directing this effort through checkbook legislation in an effort to de-populate the rural areas so Gaia can heal from the wounds caused by the unwashed masses and breeding class.
    Working class folks here is your future if you continue to vote against your own interests by putting liberal D-Rat politicians in office:
    You will be forced to live in a Soviet style 400 SF apartment next to the urban rail tracks. Kiss your backyard and garden space goodbye. You will have no automobile either because you do not need one. Your green oligarchy masters deem you not worthy. Those will be reserved for the Zuckerbergs, DeCaprios and AlGores of the world. Your mode of transport will be dirty urban trains reeking of urine and worse and populated by thugs, thieves and sexual predators.
    You will be forced to kick filthy homeless bums off your steps in the morning and drag your children onto the train into crumbling inner city schools taught by incompetents and ignorant union teachers.
    The Dema-rat of the little guy! What a joke..

    Reply this comment
  4. Queeg
    Queeg 13 September, 2014, 10:09

    Got on a train in Venice and by mistake was headed to Yugoslavia during the Cold War…..

    The stench of vomit and urine was awful…..luckily I dove off that mobile cesspool in time before becoming an inslaved Comrade!

    This rant above will become a CWD classic!

    Reply this comment
  5. Bill - San Jose
    Bill - San Jose 13 September, 2014, 21:46

    Turnpikes back East work very well. The reason they do is that you have a CHOICE TO USE THEM AND PAY THE FEE OR NOT USE THEM AND TAKE AN ALTERNATE ROUTE.

    Sacramento is removing any and all choices in a “free” society. I am not shocked.

    Reply this comment
  6. JPR11
    JPR11 14 September, 2014, 08:58

    In CA the never ending question, How do we tax the buffoons more? The effects are already obvious. Business and the middle class are leaving. CA is rated “Worst Business state and Worst Retirement state” year after year. Why work when Uncle Brown will pay you to stay home? Is it over? No yet but CA is fully on the Socialist Slide.

    Reply this comment
  7. Skep41
    Skep41 14 September, 2014, 09:11

    It’s all good! Because the doltish Republiclowns in this state are determined not to mention taxes, out-of-control unions, the Glow-Bull Warming scam and the fact that Cali is now one of the most poverty-stricken states in the union but prefer to campaign in favor of making abortion illegal, ending gay marriage and legalizing machine guns; while the truly retarded Losertarians have taken a hike so they can campaign to legalize PCP and heroin; the Demos have, with their total control of the media and billions in union slush-fund money, achieved effective permanent one-party rule in California. When Das Guvernator put those four union-busting initiatives on the ballot in 2005 in an attempt to break the Demo political monopoly the moronic Born-Agains turned their back on him because he wasnt right on abortion. That was the effective end of two-party politics in this misbegotten state. There is no place on Earth which deserves higher taxes more than Cali. Double them. Triple them. They’ll still vote for Democrats and do it with a self-satisfied smile on their faces because they have no choice.

    Reply this comment
  8. Bill Gore
    Bill Gore 14 September, 2014, 18:11

    James the Oregon mileage-based tax is far from being a ‘done deal’. While ‘sophisticates’ in the greater Portland and Eugene areas may sign on to being tracked, the rest of the state, which is far more rural than California, will probably give this a big thumbs down. Remember this is a state with no sales tax, which has soundly rejected the sales tax every time it has come to the ballot. In similar fashion I predict that the mileage tax will be a non-starter.

    Reply this comment
  9. Bc
    Bc 15 September, 2014, 13:35

    Taxes need not be indexed for inflation. If gas price doubles due to inflation tax revenue doubles too. Taxes already grow in lockstep with inflation. This is why govt must seek new taxes like the milage tax. People are too smart to go for indexing.

    Reply this comment

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Tags assigned to this article:
gas taxMark DeSaulnierJames PoulosSB 1077

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