Rethinking How We Pay for Transportation Infrastructure

Our transportation system faces two problems, one new and one old. The foundational issue is that it’s fundamentally inequitable. Marginalized communities have long borne the brunt of negative transportation impacts while paying a disproportionately larger share of their income to get where they need to go. 

The second problem is that as California drivers switch to EVs and gas-powered cars become more efficient, the gas tax revenue we use to fund transportation infrastructure will decline. 

California’s transportation spending continues to prioritize highway expansion over more sustainable modes, but we have a chance to change direction at the intersection of these two fundamental problems. In July, Transform and the Coalition for Clean Air hosted a webinar focused on how a statewide road charge to replace the gas tax can present an opportunity to redress inequalities and reduce climate emissions.

Replacing the gas tax

Darnell Grisby, Chair of the California Transportation Commission, kicked off the webinar with a big reality check: California’s transportation system has a shortfall of more than $215 billion through 2035. He pointed out that the system needs not just road maintenance but also “investing in a more multimodal system and responding to the climate crisis.” Further, existing revenues are dropping, and more than 70% of our state’s transportation funds come from fuel taxes. Automobiles are becoming more fuel-efficient and, as fuel consumption goes down, gas tax revenue is projected to drop by $31 billion over 10 years.

Transform’s Zack Deutsch-Gross pointed out that a road charge — where drivers pay based on how many miles they drive instead of how many gallons of gas they use — is the most likely replacement for the gas tax. “The key is not just to have a flat per-mile charge that backfills revenues,” he said, “but to use it as a tool to advance climate, equity, and affordability for California.” For example, the road charge could be tiered based on income.

Deutsch-Gross showed why there is such an urgent need for affordability. The lowest-income families spend about 30% of their income on transportation on average, but those with a car spend a whopping 38%. But low per-mile rates aren’t the only path to equity with a road charge. He pointed out that transportation expenses represent just 5% of income for low-income families that don’t own a car. So when we are talking about affordability for all Californians, we need to also invest in transit, walking, biking, and affordable housing near transit.

Putting equity into the equation

Sofia Rafikova, Policy Advocate for the Coalition for Clean Air (CCA), drilled deeper into the solutions, highlighting three ways the road charge can advance climate and equity goals. “The state should look at implementing an income-based rate structure, which could reduce the economic burden placed on low-income households,” she said. To promote cleaner, safer vehicles, CCA and over 20 groups in the ClimatePlan network are recommending charging higher rates for higher-income drivers with low-efficiency and larger vehicles. In this setup, EV owners would pay less than owners of gas-powered vehicles.

CCA would like to see the road charge funding prioritize fix-it-first road maintenance and alternatives to driving, rather than expanding climate-destroying highways.

Surveys show public support for equitable pricing

To counteract negative perceptions of road charges and how they may affect both policy opportunities and communication, Dr. Asha Weinstein Agrawal from the Mineta Transportation Institute provided useful insights from her 16 annual surveys on this topic. For example, there was more support for a mileage fee that charged higher rates for vehicles with higher pollution. She said this is a strong counter to the common argument that “anything besides a flat rate will be too confusing and people won’t like it.” A full 63% of people Agrawal surveyed support a rate structure tiered by income, with lower rates for low-income drivers. Her information is critical for making strong, data-backed arguments for equity and clean air.

A statewide road charge is likely within the next few years. However, we’ll need a movement to overcome inertia and pressure from those invested in maintaining the status quo. This webinar is a great starting point to learn where we need to go.

Watch the full webinar.