SACRAMENTO — California is moving forward with plans to study a “road charge” based on how many miles a person drives. State officials hope the system can eventually replace the gas tax and help fill a multi-billion dollar funding gap for road repairs.
On January 29, 2026, the California State Assembly approved Assembly Bill 1421. This measure directs the state to research how to make a mileage-based system fair, determine how much it would cost drivers, and evaluate how to put it into practice. The bill has now moved to the state Senate for review.
Addressing the Funding Gap
The shift comes as California’s primary source of transportation funding—the gasoline tax—faces a steep decline. Currently, motorists pay approximately 61 cents per gallon at the pump, the highest rate in the United States. This tax provides 80% of the state’s road maintenance funds, costing the average driver about $300 every year.
However, the California Transportation Commission projects a $31 billion loss in gas tax revenue over the next 10 years. This decline occurs because more people are switching to fuel-efficient and electric cars. These drivers pay little or nothing in gas taxes, even though they still use the roads.
Testing the Road Charge
A road usage charge system taxes motorists based on the number of miles they drive rather than how much gas they buy. California has been testing this model through various trial programs since 2016.
A recent pilot project that ended in 2025 tested a rate of 2.5 cents per mile for passenger cars and small trucks. To avoid "double taxation," the program offers credits or refunds for gas taxes or electric vehicle fees paid during the study.
Perspectives on the Program
Supporters, including Assemblymember Lori Wilson, say the study is necessary to find a steady way to pay for road repairs as the state moves away from gasoline. Wilson noted that the bill would look at how the system could include discounts or lower rates for certain groups of people.
However, the proposal faces pushback from Republican lawmakers and privacy advocates. Assembly Republican Leader Heath Flora and other critics argue that a mileage tax could unfairly hurt rural residents, low-to-middle-income families, and people with long work commutes. There are also concerns regarding the privacy of tracking how many miles a vehicle travels.
Timeline for Future Changes
The state's research will continue for several years. A report on how a road charge might affect drivers is due to the legislature in 2027, and the new law allows research to continue through 2035.
California is not the only state looking at this change. Hawaii passed a law in 2023 that will require electric vehicle owners to pay a road usage charge starting in 2028.
For more information on the program and upcoming studies, residents can visit the official website at https://caroadcharge.com/.
