Why is California Testing If VMT Road Fees Can Replace Gas Tax?

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DALLAS – Thousands of California motorists are participating in a nine-month pilot program to see if a road fee based on vehicle miles traveled could replace the state's falling gasoline tax revenues.

No money will change hands during the test period that began July 1, as some 5,000 motorists make simulated payments based on how many miles they drive.

The willingness of residents to volunteer for the VMT program is encouraging to state transportation officials, said Malcolm Dougherty, executive director of the California Department of Transportation.

Participants including drivers in every part of the state and from every socioeconomic background, Dougherty said. Some of out-of-state motorists will be included so California can determine how tourists and other visitors would be affected by the alternative funding mechanism.

"The opportunity to provide valuable input and evaluate the viability of a mileage-based user fee system demonstrates the commitment that Californians have to our roads and keeping them well maintained," Dougherty said.

Findings from the pilot program, which will end in March 2017, will be reported to the California Transportation Commission and legislative policy and fiscal committees. The state legislature will make the ultimate decision on a whether to enact a full-scale, permanent road charge program in California.

Dougherty said the VMT fee is based on the same principle as the gasoline tax, so that those using the roads pay for highway construction and maintenance.

"However, the gas tax no longer serves this purpose now that cars drive farther and need less fuel," he said.

California's gasoline and diesel taxes bring in $2.3 billion per year to fund work on Caltrans' 50,000 lane-miles and nearly 13,000 bridges on the state highway system, Dougherty said.

"This leaves nearly $5.7 billion in unfunded repairs each year," he said.

Modern vehicles are much more fuel-efficient than previous models, lowering the revenue from the gasoline tax, said Caltrans spokeswoman Vanessa Wiseman.

"We're seeing more and more vehicle miles traveled, but less and less money coming in to account for those extra miles," she said.

Six simulated payment options include a time permit that allows unlimited travel for a specific period, a mileage permit, and an odometer-based charge. More sophisticated options to record the vehicle mileage include a device that plugs into the vehicle's electronics, a smartphone app, and one that records mileage through the onboard technology found on most new vehicles.

The approximately 1,000 motorists in Oregon's year-old OreGO VMT program are charged 1.5 cents per mile in lieu of the state gasoline tax.

The California Trucking Association has recruited 50 trucks representing a cross-section of the industry for the pilot program, said Eric Sauer, the group's vice president for policy and government regulations.

"We pay our fair share to operate on California roads," Sauer said. "We hope to make it as seamless as the current system, where the general public at the pump often doesn't even realize there's a tax."

The California Transportation Commission voted in May to cut planned road and transit projects totaling $754 million from the state's five-year infrastructure plan and delayed another $755 million of planned work because of a decrease in gasoline tax revenues linked to falling fuel prices.

On the East Coast, members of the Interstate 95 Corridor Coalition are seeking a $1.5 million grant from the Federal Highway Administration to help fund a mileage fee pilot program in Delaware, Connecticut, New Hampshire, Pennsylvania, and Vermont.

States along I-95 need to double their road construction spending by 2040, but local gasoline taxes won't generate that level of funding, said coalition director Trish Hendren.

"Projections are very bleak for revenues," she said. "The gas tax is not a long-term solution."

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