IE 11 is not supported. For an optimal experience visit our site on another browser.

Tax drivers per mile? California considers

California drivers are used to paying the highest gasoline prices in the continental U.S., but a proposal that their cars be outfitted with transponders to collect taxes by the mile has stirred privacy fears.
As in other states, drivers are now taxed at the pump in California, where gas prices are the highest in the continental U.S. This San Mateo station's price board was from last Oct. 11.
As in other states, drivers are now taxed at the pump in California, where gas prices are the highest in the continental U.S. This San Mateo station's price board was from last Oct. 11.Jeff Chiu / AP file
/ Source: Reuters

California drivers are accustomed to paying the highest prices at the gasoline pump in the continental United States, but a proposal that their cars be outfitted with transponders to collect state taxes by the mile has stirred deep-rooted privacy fears.

The policy idea is a response to the growing popularity of gas-electric hybrid cars and concern that as more fuel-efficient vehicles clog the California’s highways, a tax on gasoline consumption will no longer be the best way to finance road maintenance.

Gov. Arnold Schwarzenegger this week nominated Joan Borucki, a proponent of taxing motorists for every mile they drive, to a key position overseeing the state’s Department of Motor Vehicles.

A similar proposal is due to be tested in Oregon next year, but critics in California are already lining up.

Legislative resistance
“Under no circumstances would I ever support the idea of having a tracking device on your car,” said Kevin Murray, chair of the state Senate’s Transportation Committee.

Schwarzenegger was careful to distance himself from the tax by the mile proposal, telling reporters he had not had time to study the idea and so had no comment at present.

California charges motorists 18 cents for every gallon of gasoline they purchase to help pay for the state’s roads.

There is also a state sales tax of 7.25 percent on gasoline but with California deeply in debt, critics say those tax revenues have been “raided” in recent years to pay for other services such as education and health care.

“People are driving more miles, putting more wear and tear on the roads, but more fuel efficient cars are starting to erode the gas tax,” said Mike Lawson, executive director of Transportation California, a coalition of business and labor groups who back transportation infrastructure improvements.

A pay-per-mile plan involves the installation of a transponder into a car which is able to tell whether the car is within its home state. This is necessary so motorists are not taxed by two states for the same gallon of gas when they are traveling across the country.

Big brother fears
The device has raised “Big Brother” fears with some believing the state could track the movements of motorists and use the data inappropriately.

“This is entirely a figment of their imagination. We are very concerned about privacy issues,” said James Whitty, who is heading a pilot program due to start next year for Oregon’s Department of Transportation.

Whitty said the device would receive a signal from a satellite telling it which state the car was traveling in but does not communicate back to the satellite, making it impossible for others to know the location of the car.

“No location points are transmitted, no locations points are stored in the vehicle’s history,” Whitty said.

California state Senator Tom McClintock, who is deputy chair of the Transportation Committee, also raised fears that the tax would be more expensive to collect and would also discourage drivers from buying more fuel-efficient cars.

“Don’t we want to encourage fuel efficient vehicles?” he said, echoing the concerns of some environmentalists.

Gas guzzlers could pay more
Whitty said, however, the current system of gas taxes possibly could impose an unfair burden on lower-income drivers who are unable to afford popular new hybrids, which typically cost about $3,000 more than their gas-only peers.

Proponents also argue that a per-mile tax system could be crafted so that heavy vehicles, including gas-guzzling SUVs and trucks more likely to damage roads, would pay more for each mile driven.

State Sen. Kevin Murray, although an opponent of tracking devices, acknowledged the current system needed to be changed.

“We need to think outside the box to use an overused term to come up with new ways to fund transportation, no question about that,” he said.

Gas prices per gallon in California average $2.34, according to American Automobile Association, about 19 percent more than the national average.