California lawmakers are weighing how the state will pay for its roads as gasoline tax revenue declines.

SAN DIEGO — California Assembly Bill 1421 does not create a mileage tax, but it is a measure to continue a multi-year state study on whether the state should replace its gas tax with a mileage-based road-usage fee. 

California’s roads rely heavily on gas-tax revenue. Drivers currently pay about 61 cents per gallon in state excise taxes, representing billions of dollars for road maintenance and transit projects every year. 

“What’s happened now is that people are buying more hybrid cars, they’re buying more electric cars, and as a result of that, they’re not buying as much gas,” Alan Gin, PhD, an economics professor at the University of San Diego, said. “They’re still using the roads, but they have not been paying the gasoline tax.” 

California lawmakers are weighing how the state will pay for its roads as gasoline tax revenue dries up. 

AB 1421 extends the Road Usage Charge Technical Advisory Committee and directs the California Transportation Commission to compile research and deliver a full report to lawmakers by January 1, 2027. 

Any mileage-based charge would require a completely separate bill in a future session– one that would need a two-thirds vote of the legislature. 

“It’ll change the distribution, somewhat, in the sense that people who now drive electric cars and hybrids would probably end up having to pay more than they do now,” Gin said. 

Even the possibility of a mileage tax has stirred opposition and a heated debate amongst Californians. 

“I think one worry is the idea of government overreach in that people are going to be reporting, somehow, their mileage usage,: Gin said. “So, then some people are worried about the… bureaucracy that might be needed… be created… to do that.”

The California Transportation Commission estimates gas-tax revenue will fall by $31.3 billion over the next decade, which is why lawmakers say they need to study alternatives. 

“If nothing is done, the state is going to run out of money to help repair roads,” Gin said. “I think rather than seeing this as a tax increase, this is basically going to be roughly the same as what you were paying previously in terms of the gas tax. If they don’t eliminate the gas tax as part of this, then people who drive gas-powered cars will be paying twice. They’d be paying the gas tax, and then they’d also be paying this mileage tax.”Â