California tests gas tax alternative

California is trialing alternatives to the gas tax in a bid to raise highway funding, which has been severely depleted by the popularity of electric cars.

The state currently taxes drivers on the gasoline they buy, with Californians on average paying about $300 a year.

This critical gas tax is used to support road maintenance and other transportation projects, with approximately 80 percent of highway and road repairs being funded by it, according to the California Department of Transportation.

Meanwhile, electric car owners pay an annual tax for road repairs, but this comes to about a third of the average gas tax, according to Caltrans’ Road Charge Program.

“What’s happening right now as we see this growth in different types of vehicles… we’re seeing this increasing unfairness in what people are paying,” Lauren Prehoda, manager of the program, told the Los Angeles Times.

The new pilot program will pay Californian drivers of any vehicle type up to $400 to test alternative options for six months starting in August.

It aims to switch from taxing drivers based on fuel consumption to taxing them based on how many miles they drive.

The program will test two alternative taxes, either a flat per-mile rate or an individual rate based on a vehicle’s fuel efficiency, Prehoda told the Times.

The new pilot is the fourth of its kind, as the state continues to try to adapt to the rising numbers of electric cars on the roads.

Drivers in California bought a record number of new electric cars in 2023, a total of 446,961, which was a 29% increase from the previous year, according to nonprofit Veloz and the California Energy Commission.

The state will also ban the sale of new gasoline-powered vehicles from 2035 in an effort to reduce impact on climate change.

The new pilot, which is seeking about 800 participants, will focus on testing the collection process and how reliable and fair it is, Prehoda said.

Californian drivers who are interested in joining the pilot scheme are encouraged to sign up online.

People will be told if they have been selected for the scheme in July, and will be asked to register online and select a method for reporting their miles.

Prehoda told the outlet that there will be three different ways to report miles.

“Some are very low tech, some have a location-sharing aspect. It’s up to you to choose what you do,” she said.

She encourages people to sign up to help improve the tax system, and in turn help improve California’s roads.

“This is your opportunity to figure this out together with us; to solve an issue that the state of California has,” Prehoda said, per the Times. “We all need good roads to get around.”