When the 6 Wins Network persuaded the Metropolitan Transportation Commission to study our “Equity, Environment and Jobs” scenario as an alternative to Plan Bay Area, we included a new source of revenue: a “vehicle miles traveled” charge. The idea was that drivers would pay a penny per mile, or about $120 a year, with the new revenue – $7.9 billion over 28 years – going into improved bus and BART service. In MTC’s computer model, those transit improvements resulted in a big boost in transit ridership, less traffic congestion, and better air quality and public health.
That money, like the transit service it funded, existed only on paper.
Now, however, California is looking at the possibility of replacing its gas tax with a per-mile charge on road use. Last year, Governor Brown signed SB 1077 (De Saulnier), creating a Road Usage Charge Technical Advisory Committee. The Advisory Committee will develop a pilot road usage charge program that could ultimately replace the current gas tax. Over the coming year, it will meet monthly around California to solicit community input. (The meeting schedule and other information are posted on the Advisory Committee webpage.)
When the California Transportation Commission asked if I would serve as the social equity voice on the Advisory Committee, I immediately agreed. Here’s why I think the issue is so important, to the state as a whole and to its low-income residents in particular.
What’s the Problem?
Replacing the gas tax is increasingly urgent for two reasons: first, because like the federal gas tax, it isn’t raising enough revenue to meet California’s important transportation needs; and second, because it is an especially regressive tax.
Let’s start with the revenue issue. California’s gas tax is one of the most important funding sources for a range of important transportation needs. Yet while the cost of meeting those needs has increased over the years, California hasn’t increased the gas tax since 1994. With inflation, the 18 cents per gallon rate set twenty years ago has just 10.5 cents of purchasing power today. (Had it been indexed to inflation, it would now be at about 31 cents.)
What’s more, newer cars generally, and hybrids in particular, are much more fuel efficient than older cars. Of course, increased fuel efficiency is a great thing, but it masks the fact that, while Californians are buying less gas, we are actuallydriving more. As the San Jose Mercury News reported last month, gas sales in California have fallen by 8 percent since they peaked in 2003. Since the gas tax is pegged to the sale of gas, state revenues from the tax have fallen by $250 million from 2003 to 2013.
A recent state report noted, “By 2030, as much as half of the revenue that could have been collected will be lost to fuel efficiency.”
As a result, the state is running out of money to run its buses and trains at the same time that California is promoting Transit Oriented Development. Something’s got to give.
The silver lining in this revenue crisis is that it is has opened the door to discussing a more equitable way to ask drivers to contribute to the state’s transportation needs. The current gas tax is a doubly regressive tax. All sales taxes on non-luxury goods are regressive because they end up costing low-income families a much higher percentage of their income than wealthy people.
But in the case of the gas tax, low-income drivers are actually paying more dollars, not just a higher percentage of their income. Wealthier people can afford brand new hybrid and electric vehicles which consume far less gas. But these vehicles cost too much for most low-income people. The older cars that low-income families can afford (if they can afford a car at all) may get just 20 miles to the gallon, meaning they can pay twice as much for the same miles driven as someone who can afford a new fuel-efficient vehicle.
True to Public Advocate’s mission and model of working, I will be consulting with low-income and minority community stakeholders throughout the state so that I can bring their smart ideas and priorities to the Advisory Committee.
By making real the voices and needs of California’s low-income communities of color, I am confident that California can seize this moment to come up with a new and better way to fully fund the state’s transportation needs and do so in a way that narrows the wealth gap.