According to CalSTA, California is testing a “road charge” system as gas tax revenues dwindle. Participants report mileage voluntarily, aligning with Biden’s push for electric vehicles.

A “road charge,” which would impose fees on drivers based on their mileage rather than their petroleum purchases, is being tested in California, a state that depends on the gas tax and other fuel tax income to fund road upkeep. The California State Transportation Agency (CalSTA) announced the launch of the pilot program because it projects a decline in gas tax revenue collection in the upcoming years.

The pilot program was established by a statute approved in 2021, according to CalSTA officials, to investigate the viability of alternate funding sources for road maintenance in the state. The agency even claimed that these funding sources would “show net savings for some motorists under certain circumstances.”

While assistance in testing the system for the agency can yield prizes of up to $400, participation in the program is entirely voluntary. According to the organization, participants would pay various prices for road charges and then send the state comments regarding their experiences. They will have three options for reporting their mileage: manual odometer entry, in-vehicle telematics without GPS, or an onboard plug-in device with or without GPS.

Following the passage of state Senate Bill 1077 in 2014, which declared that it was “important for the state to begin to explore alternative revenue sources that may be implemented instead of the antiquated gas tax structure now in place,” the state has been looking into alternative sources of funding, according to Caltrans, the state’s transportation agency.

“California will be challenged to sustain its $2.5 trillion economy,” according to a 2017 review by Caltans if the state’s reliance on gasoline and diesel automobiles is reduced.

“One of the best-kept secrets of many Washington and local politicians is the importance of gasoline taxes on the federal and local economy,” stated Price Futures Group senior market analyst Phil Flynn.

States will find alternative means of covering expenses if that is removed, according to Flynn.

By 2030, President Biden wants to see 50% of all new car sales be electric. This will be accomplished, in part, by bringing down vehicle costs and expanding the infrastructure for EV charging. According to the Biden administration’s January report, sales of electric vehicles have more than doubled since Biden assumed office, with over 4.5 million EVs currently on the road.

States are, however, “already feeling the pinch,” according to Flynn, even though the proportion of electric vehicles isn’t that high right now.

For example, Flynn noted that California is undoubtedly suffering the most because it has the greatest number of registered automobiles. He claimed that although it’s a tiny portion, it’s seriously harming California and contributes to the state’s perception that “their budget surplus magically disappeared.”

He said “When you have an administration that is working to replace the oil and gas industry in favor of an industry that needs handouts, you better find a way to replace the tax revenue that the oil and gas industry provides,” he said.

He also mentioned the extent to which the American oil sector “stimulates the U.S. economy.”

Flynn expressed reservations about the way it is being evaluated, even if he is not overly troubled by paying drivers per mile.

A GPS tracking system on automobiles, according to him, “raises some of the same concerns that we saw with privacy that we have had with special media companies and cellphone data.”

The California State Transportation Agency, however, said that security measures are in place to safeguard personally identifiable information: “Participants choose their preferred reporting method and no one is being tracked. The GPS data is anonymized, and personal information collected during the pilot will be destroyed 30 days after the pilot concludes.”

Nevertheless, as of right now, the administration is not recommending any actions or modifications. Even if this is approved, there would still be a need for statutory authority and broad public participation in a road charge program, which is not being pursued at this time.

Recently, GreatGameIndia reported that, according to the Washington Post, EV charging stations cost US taxpayers $1 billion. However, after two years, only seven chargers and a meager 38 parking spaces have been built out of the allocated $7.5 billion.