Explore the Bay Area Monitor

December 2014/January 2015

Road Test: Pilot Program to Explore Mileage Fee

By Quynh Tran

The California Legislature’s new law on road use may eventually lead to drivers paying for how far they travel. Senate Bill 1077, passed on September 29, will create a pilot program to test the potential of replacing the state fuel tax with a road usage charge based on miles driven.

Supporters of the bill said the state will face decreased revenue for transportation needs as vehicles become more fuel-efficient and less gasoline is used in the future.

“The gas tax is ultimately an unsustainable way to fund adequate maintenance of our roads. We will need to examine several alternatives to the gas tax,” said SB 1077’s author, state Senator Mark DeSaulnier, in a press release issued while the bill underwent legislative review earlier this year.

Currently, California drivers pay 36 cents per gallon in state gas taxes and 18.4 cents per gallon in federal taxes. The Bay Area receives $350 million annually from the state from revenues generated by state gas tax. According to a report from the Metropolitan Transportation Commission, a road usage charge of a half cent per mile alone would raise $285 million a year for the region.

Gas taxes are considered regressive because they absorb a higher share of budgets in low-income households. A road usage charge is less regressive and would also equalize spending rates between all types of vehicles (whether electric, hybrid, or gas guzzlers) and types of road use (whether inter-state, regional, or local).

The current gas tax funds specific transportation needs such as the construction and maintenance of highways, bridges, and pedestrian and bicycle paths, as well as the construction of mass transit systems. However, it does not include the operations of mass transit or purchases of its vehicles, such as BART trains.

Because the eligible uses of a road usage charge have not been defined, once implemented it potentially could fund the operations of mass transit systems as well as the purchases of new trains, an attractive option for Bay Area commuters.

California’s pilot program will be in place by January 2017 using several thousand volunteer drivers who are willing to have their mileage recorded. A 15-member technical advisory committee will guide the project and report its findings to the Legislature by June 30, 2018.

Selected by the chair of the California Transportation Commission, the committee members will represent the telecommunications industry, highway user groups, data security and privacy rights advocates, regional transportation agencies, and national research and policymaking bodies.

California is not alone in facing a transportation funding shortfall. Other states — including Oregon, Washington, and Minnesota — have examined the issue and provide clues to how California may implement its study.

After two earlier pilot programs, Oregon will launch a full-fledged program next July. The state will charge 5,000 volunteer drivers 1.5 cents per mile, which can be recorded using a GPS tracker, a daily logbook, or an odometer device. Drivers will be billed monthly and then reimbursed to offset the gasoline tax they’ve already paid.

In Oregon’s most recent pilot program, drivers had four plans to choose from for reporting their mileage. The basic plan reported all miles driven. The participants installed their own mileage reporting devices into the diagnostic port in their vehicles, and in most cases did so easily without help and additional tools.

The advanced plan reported miles driven by location, which required a more sophisticated mileage reporting device or “dongle.” Possibilities already exist on the market with systems such as General Motor’s OnStar, Ford’s SYNC, Mercedes’s mbrace, and Toyota’s Entune.

The smartphone plan required a smartphone application that recorded all miles or Oregon miles only; participants could control when location data was enabled or disabled.

The flat fee plan charged drivers $45 per month, equivalent to roughly 3,000 miles. This option turned out to be the most expensive, as it did not adjust for mileage changes throughout the study. Accordingly, few volunteers chose this plan.

Opponents of the California law cite privacy concerns. However, SB 1077 includes specific language to protect drivers from misusage of their information and excessive monitoring. Part of the reason for conducting the study is to see if a mileage-based fee could be collected in a manner that is respectful to the privacy of drivers, according to DeSaulnier’s office.

Quynh Tran is a writer and communications professional based in the East Bay.

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