California Joins Oregon In Testing VMT as Gas Tax Alternative

A Governing article (2016-05-24) reported that California is set to join Oregon in testing alternatives to the state’s gas tax, including charging by vehicle miles travelled (VMT). The article noted that California is launching a nine month pilot project starting this July in response to its declining gas tax revenues.  From the article:

The pilot project comes as the gas tax continues to lose its buying power. In nearly two-thirds of states, gas taxes have not kept up with inflation. What’s more, California estimates it will lose half of its fuel tax revenues by 2035 because of increased fuel efficiency. …

While states are a long way off from scrapping their fuel taxes entirely, these initiatives help them prepare for the future, said Jim Madaffer, a former San Diego council member who now chairs the California Road Charge Pilot’s technical advisory committee. “The whole purpose of the pilot is to come up with some ideas so we can find a way to have a long-term, reliable funding source.”

Under California’s trial, drivers will get to choose how to keep track of the miles they drive, either by buying a decal for an allotment of miles or using GPS-enabled systems to tally them. That’s more options than Oregon offers its drivers under its mileage tax program, which launched last summer. …

While both states designed programs for 5,000 vehicles, fewer than 900 were participating in Oregon’s program as of April. More than 8,000 Californians, on the other hand, have signed up for the program there.

The article also stressed that other states are watching Oregon and California closely and that the federal government is also providing incentives to states that test gas tax alternatives:

[Declining gas tax revenue is] one reason states will be watching California’s and Oregon’s experiments closely. Another is that the federal government wants states to test alternatives to the gas tax. The FAST Act, the transportation funding law that passed Congress last year, includes $95 million over five years to help states run programs similar to California’s and Oregon’s.

Useful Links

Oregon’s “OReGO” VMT Tax Website