Golden State might soon say goodbye to gas taxes and a warm hello to a mileage-based tax instead. That’s right, California, the land of sunshine and electric cars is considering a radical shift in how it funds its roads.
More than 1.2 million electric vehicles are already on California’s roads, humming up and down the busy highways. While the air quality might be improving, the government purse started feeling a bit light. The state’s Department of Transportation (Caltrans) worked out that California is missing out on $200 million every year. The culprit? Those pesky EV owners.
Electric Vehicle Taxing Dilemma
The math is pretty simple – owners of gas-powered vehicles cough up, on average, $300 a year in gas taxes. EV owners, on the other hand, pay absolutely nothing. 1.2 million electric cars not paying any tax? It’s a surprise it took Caltrans so long to figure this out. The argument is that while electric vehicles do not pollute, they still use roads. With an annual road maintenance bill between $8 and $9 billion, the extra money would literally go the extra mile.
In their infinite wisdom, Caltrans has proposed a mileage-based tax to level the playing field. Instead of paying the gas tax at the pumps, every mile driven will be taxed. Electric or gas-powered, all vehicles will pay the same rate. It’s a bold move, and one that many people believe is fairer and more sustainable in the long run.
A Pilot Program With Cash Incentive
Rather than wait and ponder over all the “ifs” and “buts,” California has sprung to action. The pilot program involves installing a tracking device on the vehicle. However, those worried about privacy can submit before-and-after photos of their odometer. The government is offering a $400 reward to sweeten the participation, although it comes in installments. The state is holding on to a $200 contingent to cover any mileage fees, but in the end, there should be some money left to pay out.
The new tax calculation might benefit the state’s coffers, but it raises some important questions. Many people jumped on the EV train because there was no fuel tax, and for that reason, running costs were lower. Will gas-powered vehicle owners see any change in their yearly costs? Finally, will the extra cash from electric cars actually improve California’s roads, or will it create another bureaucratic headache?
The California tax experiment is a fascinating development to watch. It is a sign of things to come; fewer gas-powered cars on the roads means fewer taxes are paid, and no government ever was happy about having less money. Our roads are getting older, and they desperately need help. Whether we like it or not, the money to fix them will come from our pockets.