Senator Wiener Introduces SB 339 to Extend California’s Road Charge Pilot Program, Providing a Potential Future Source of Transportation and Road Funding

The voluntary Gas Tax Alternative Pilot would explore the viability of a road charge, or a fee based on road usage, as a replacement for the current gas tax
February 9, 2021

SACRAMENTO - Senator Scott Wiener (D-San Francisco) introduced Senate Bill 339, the Gas Tax Alternative Pilot. This pilot program, which allows California to explore charging based on vehicle miles traveled (VMT) instead of relying on gas taxes, is a critical strategy as the state transitions away from fossil fuels. Gas taxes fund California’s roads, highway system, and public transportation systems. With our transition to more fuel efficient vehicles — and ultimately away from carbon-fueled vehicles entirely — gas tax revenue will decline and eventually end. Road usage/VMT charges can replace gas taxes and ensure we can continue to fund our roads. Moreover, road charges are more equitable than gas taxes because wealthier people are more likely to be able to afford low and zero emission vehicles, thus avoiding gas taxes while lower income people continue to pay.

The California Road Charge Pilot Program has existed since 2015, and under SB 339, will be extended to 2027 and expanded to include an actual fee collection program. Participation in the pilot program is entirely voluntary — no one will be forced to participate. The pilot program will allow state agencies to evaluate and refine the approach for future consideration of broader application.

With many drivers  – particularly wealthier drivers – switching to electric vehicles, and with Governor Gavin Newsom’s recent executive order banning the sale of new internal combustion engine vehicles by 2035, the road charge pilot program offers an alternative option for transportation and road funding. Right now, California’s road maintenance and transportation funding comes primarily from the gas tax, which must be constantly adjusted and raised due to inflation and increasing car fuel efficiency. The Gas Tax Alternative Pilot would expand the current California Road Charge Pilot to further explore a “user pays” system that requires drivers pay for their vehicle miles traveled (VMT) in order to fund road and highway infrastructure and maintenance.  

Rather than pay a fee at the pump when purchasing gasoline, a road charge system determines a driver’s VMT with an in-vehicle device, regular reporting of the odometer, or through various other methods. Unlike prior forms of the program which used mock invoices, SB 339 includes the actual collection of this road charge fee. The VMT fee will be paid by voluntary participants, and in return they will receive a credit at the end of the program that covers what they would have paid in gas taxes during the duration of their participation. This extension is a crucial step and will help better equip the state with the necessary information regarding the potential for a road charge system to replace the gas tax to fund transportation infrastructure and maintenance.

To generate consistent revenue for long-term transportation funding, California must both deal with inflation and find an alternative to a “pay-at-the-pump” model, which relies on fuel inefficiency to generate funding. While SB 1 (Beall, 2017) took positive steps to address inflation issues, the gas tax is not a viable long-term solution: revenue from the tax is based on fuel consumption, and as critically important climate-friendly policies discouraging fuel consumption continue to be implemented, gas tax revenue will go down. 

The current tax structure also causes an inequitable burden that has an outsized impact on low-income communities. Fuel efficient vehicles, hybrids, and electric vehicles on average cost more than less efficient vehicles. This allows those with the financial means to drive an efficient car — thus using less gas — to pay less overall to fund the roads they’re driving on. A road charge program would allow for funding to be based on how much a person is using the road, rather than how much gas they purchase, more equitably distributing the costs of road and transportation maintenance. 

SB 339 is sponsored by Transportation California and supported by the California Transportation Commission. Assemblymembers David Chiu (D-San Francisco) and Phil Ting (D-San Francisco) and Senator Bob Wieckowski (D-Fremont) are co-authoring the legislation. 

“A road charge is an equitable solution to our road and transportation funding problem,” said Senator Wiener. “SB 339 allows California to study this progressive solution and assess how works for everyday Californians. We need to ensure our struggling transportation systems have a stable source of funding, especially as climate change worsens and investments in sustainable transit become even more critical. We all share the roads, and it’s time to equitably share in how we fund them.”

"As we work to combat climate change and vehicles become more fuel efficient, it's crucial that we sustain our transportation and road funding," said Assemblymember David Chiu (D-San Francisco). "This pilot program offers us an equitable solution to a difficult problem."

“It’s a fact that by consumer choice or long-standing governmental policy and regulations, the fuel efficiency of our extended passenger fleet will continue to increase,” said Kiana Valentine, Executive Director for Transportation California. “We have long relied upon user fee-based funding through the gas tax here in California, and as our fleet’s efficiency improves, we will see that the gas tax is unsustainable as a means to support our system. We must turn to another user-based approach and fortunately, SB 339 will continue the technologically robust examination of road charge system.”

“California’s transportation network is critical for getting people to work and to school, and for ensuring our economic competitiveness” said California Transportation Commission Executive Director Mitch Weiss. “We need to look to a road charge as an equitable, sustainable way to pay for transportation, that eventually will replace the gas tax. And we need to be prepared for this eventual transition and make sure we’ve studied it thoroughly for when the time comes.”