California is exploring a mileage-based tax system that would charge drivers based on the number of miles they drive, rather than how much gasoline they buy.
This concept is often referred to as a “road charge” or mileage-based user fee and is being tested in pilot programs by the California Department of Transportation (Caltrans).
The mileage tax idea has gained traction because gas tax revenues — which fund road repairs — are declining as more drivers switch to electric and fuel-efficient vehicles.
California currently collects a gas tax of about 59–61 cents per gallon, and it raises billions for transportation each year.
With more electric and hybrid cars on the road, less gasoline is sold and less gas tax is collected, creating a funding gap for infrastructure.
Under the proposed mileage tax, drivers could pay a small amount for each mile they drive, for example 2 to 4 cents per mile in pilot tests.
Pilot programs have tested different reporting methods, including manual odometer readings or on-board telematics devices (with various privacy safeguards).
Participants in the pilot may receive credits or refunds for gasoline taxes or electric vehicle registration fees they’ve already paid.
The goal of a mileage tax is to create a fairer and sustainable revenue source that ensures all drivers pay for road use — including those in electric vehicles.
Supporters argue that it better reflects actual road use and makes funding more equitable across different vehicle types.
Critics, however, worry it could disproportionately burden low-income drivers and people with long commutes.
TOpponents also raise concerns about privacy and the idea of tracking miles driven.
Some advocacy groups claim a mileage tax could amount to a new form of taxation on top of existing gas and vehicle taxes.
So far, the mileage tax remains largely in the pilot/testing phase, with future policy decisions still pending legislative action and public debate.
If fully implemented, the mileage tax could reshape how California funds transportation infrastructure in the decades ahead as fossil fuel use declines.