Key Takeaways
California’s push toward electric vehicles brings up the issue of how to pay for road maintenance when drivers are buying less gasoline.
Through a pilot program, state officials tested a per-mile tax.
Rather than tying revenue to fuel consumption, the system would track vehicle miles traveled and apply a per‑mile fee that is meant to mirror, and eventually replace, the gas tax.
Rural Californians will be affected the most by the tax since they must commute greater distances.
Oregon has a voluntary per-mile fee program, which they plan to extend to existing electric vehicles beginning in 2027 and new EVs in 2028 to cover road maintenance.
As the Washington Examiner explains, California’s newest tax proposal is basically a subscription service that bills monthly for how often a car is driven. According to KMPH 26, the state has been paying for road maintenance through an ever-increasing gas tax that covers about 80% of the state’s road maintenance. At the same time, the state wants people to transition to electric vehicles (EVs) to help meet its goal of carbon neutrality by 2045. As more people switch to electric and plug-in vehicles, California is realizing it needs a new way to cover road maintenance. The state ran a pilot program to test a per-mile fee that charged EV owners between two and four cents for every mile that they drove.
Via The Daily Overview, under the pilot program, volunteer drivers allowed the state to track their mileage using odometer readings, plug-in devices, or smartphone apps. Participants then received mock invoices showing what they would have paid under a per-mile road charge in place of the gasoline tax. The aim was to evaluate not only the technology behind mileage tracking, but also how motorists respond to seeing road use billed as a separate line item. An interim report to the legislature detailed how participants reacted to the various data-collection methods and pricing structures.
In 2017, California raised its state gas tax supposedly to maintain the state’s roads, despite a state budget of $179.5 billion. California has the highest gas tax in the country at 71 cents per gallon. But as more people switch to EVs, the gas tax will cover less of the state’s road costs. Despite California’s budget increasing to $325 billion, the state needs an additional tax to build and maintain its roads. The Washington Examiner argues that the per-mile tax will inevitably increase, as the gas tax did, requiring taxpayers to pay every month for the privilege of using state roads.
KMPH 26 broke down a possible hypothetical road tax as follows: “If you live in Hanford and commute to and from Fresno 5 days a week with a Toyota Camry, you would have to pay just over $11 if the road tax is 3 cents.” That is $11 per week if you commute about 40 minutes to work every day, not counting any other additional drives, or about $44 a month.
According to The Daily Overview, advocates say a per-mile tax more accurately reflects how much drivers use the roads and can be structured so that someone who drives 10,000 miles a year pays about the same as they would under the existing fuel tax, whether they drive a gasoline-powered SUV or an electric crossover.
Via CarScoops, there are issues with the program that need to be resolved, including drivers reporting lower mileage than actually driven. Options exist to monitor vehicle mileage, such as installing a tracking device that plugs into the car and logs the miles traveled. That could be an expensive option given the size of California, and balancing effective tracking with individual privacy rights could be a problem. Another issue is that a flat per‑mile fee would fall hardest on drivers who live far from job centers or cannot afford to live near transit, raising questions about whether the state should build in discounts or credits for low‑income households or rural residents. How the program is rolled out is another issue. Lawmakers will have to decide whether to phase in mileage fees first for EVs that currently pay little or nothing at the pump, or to move the entire fleet onto a per‑mile model at once.
Oregon’s Road Usage Charge
Oregon has a per-mile fee road usage program called OReGO. Volunteers pay a per-mile charge for the miles they drive and receive a non-refundable credit for fuel tax paid at the pump, and drivers of highly efficient vehicles and EVs are eligible for reduced registration fees. The current charge is two cents per mile driven, but beginning January 1, 2026, OReGO drivers will pay 2.3 cents per mile.
According to The Oregonian, the “road usage charge” of 2.3 cents per mile will go into effect for existing EV owners on July 1, 2027, new EV owners on January 1, 2028, and owners of hybrids on July 1, 2028. Hybrid owners will be reimbursed for any gas tax they paid. The mechanism for doing so still needs to be determined. Hybrid and EV owners who do not want the state tracking the number of miles they drive can pay a flat $340 annual “road usage charge” instead of 2.3 cents per mile driven.
Analysis
Transitioning to EVs requires broad economic and political reform, including new supply chains, charging infrastructure, and mechanisms for funding roads. California’s test of a road tax exemplifies an attempt to increase EVs’ share of the cost burden for road maintenance. It makes sense that EVs should pay for road maintenance when considering the costs their heaviness imposes on infrastructure. As we explained in When Government Chooses Your Car, “Due to their heavier weight, EVs contribute to increased wear on roads and bridges, leading to higher maintenance costs for infrastructure that are not typically accounted for in EV ownership costs.”
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