California exploring getting rid of the gas tax, replacing it with road charge program

As much drivers crook to zero-emissions vehicles, which don't person to wage thing astatine the pump, California's state taxation could soon beryllium a happening of the past.

The authorities is exploring implementing a California Road Charge, which would regenerate the state taxation with a mileage-based idiosyncratic interest for drivers who usage the roads. Essentially, charging by the mile alternatively of the tank.

California's state taxation is presently astir 59 cents per gallon, the country's highest rate. It generates millions of dollars to money roadworthy repairs crossed the state.

According to Caltrans, Californians with gas-powered vehicles wage astir $300 a twelvemonth successful authorities state taxes.

But with a emergence successful electrical vehicles, lawmakers are disquieted it won't make capable money.

Caltrans officials launched a pilot program successful Aug. 2024 to trial the roadworthy complaint system. It concluded successful January. The results of the programme are expected to beryllium released aboriginal this year.

Gas taxation gross is acceptable to fall

Motor substance taxes are the largest root of proscription gross for states, according to the National Association of State Budget Officers' astir caller study connected authorities expenditures. But the wealth they bring successful has fallen: Gas taxes raised 41% of proscription gross successful fiscal twelvemonth 2016, compared with astir 36% successful fiscal twelvemonth 2024, the radical found.

In California, wherever zero-emission vehicles accounted for astir a 4th of car income past year, legislative analysts foretell state taxation collections volition alteration by $5 cardinal - oregon 64% - by 2035, successful a script wherever the authorities successfully meets its clime goals. California and Oregon are among the aggregate states that volition necessitate each caller rider cars sold to beryllium zero-emission vehicles by 2035.

The downward gross inclination is already playing retired successful Pennsylvania, wherever state taxation revenues dropped an estimated $250 cardinal past twelvemonth compared with 2019, according to the state's autarkic fiscal office.

Inflation has besides driven up the outgo of proscription materials, exacerbating fund concerns.

The Associated Press contributed to this report.