As more drivers switch to electric and hybrid vehicles, which are not subject to the gas tax, California projects a $31 billion revenue loss over the next decade.

SAN DIEGO — California lawmakers remain divided over legislation that would allow the state to continue a multi-year study examining whether a mileage-based road fee should eventually replace the current gas tax as revenue from fuel taxes declines.

The state’s gas tax, the highest in the nation at 61 cents per gallon, currently funds road repairs and maintenance. As more drivers switch to electric and hybrid vehicles, which are not subject to the gas tax, California projects a $31 billion revenue loss over the next decade.

Democratic Assembly Member Lori Wilson proposed Assembly Bill 1421 to extend a committee studying alternatives to the state’s declining gas tax revenue. 

“I want to be very clear – AB 1421 does not impose a new tax or a fee,” Wilson said.

She emphasized that “AB 1421 is about getting the facts right,” and argued that the study is necessary to understand the revenue shortfall’s impact. Supporters highlighted the consequences of inaction. 

“It’s going to show up as rougher roads, fewer bridges being maintained and repaired, and less funding for transit, bicycle and pedestrian infrastructure,” said Kiana Valentine, executive director of Transportation California, which is sponsoring this legislation.

One alternative under study is a mileage-based road usage fee that would charge all California drivers based on miles driven. According to USD Economic Professor Alan Gin, “It would 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.”

A key concern among critics involves potential double charges for drivers currently paying the gas tax. Wilson directly addressed this concern, saying: “People who are currently paying the gas tax are not going to be paying more.”

Republican Assembly Member Carl DeMaio strongly opposes the measure, calling it a “mileage tax.” 

“This mileage tax is insane,” DeMaio said, adding that “this is going to be a fatal blow to working families’ household budgets. We’ve got to defeat it.”

DeMaio questions the study’s intentions, saying: “These politicians don’t study anything they’re not already deciding to do. This study is window dressing, and the conclusion, of course, the foregone conclusion, is that you need to pay a mileage tax! That’s what these politicians are doing. Hook or crook, they want more of your money. In this case, it’s more crook than hook.”

De Maio plans to push for a ballot initiative requiring voter approval for any new road usage fee, stating that the “voters should be the ultimate deciders on whether or not we should have a higher gas tax or a mileage tax.”

“We have to stand up for working families and our campaign is doing that,” he said.

The Assembly has already passed AB 1421, and the state Senate currently considers the measure. If approved, the bill would require lawmakers to receive a full report on possible gas tax alternatives by January of next year.

Any future road usage fee proposal would require a two-thirds vote by the state legislature to pass. Legislators also plan to conduct town halls throughout the state, including one in San Diego, over the coming year to gather resident input before making any final decisions.