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California mulls trading gasoline gallon tax for tax on miles driven

November 23, 2010
California would scrap the state tax on gasoline, now 18 cents a gallon, in favor of a tax on every mile each car and truck travels, in a proposal advocated by the state's new Department of Motor Vehicles director. The notion is gaining acceptance among transportation and budget experts. As Californians drive increasingly more fuel-efficient cars, state officials are alarmed that the gasoline tax will not raise enough money to keep up with road needs. But charging people for the miles they drive worries some owners of hybrid cars because it could wipe away any gas-tax savings. And privacy advocates worry about the government tracking the whereabouts of every car in California. In one scenario, currently being tested in Oregon, tracking devices send a signal to a GPS satellite following the car, and that information is used to calculate the tax bill. Other devices send a signal from the car to the pump, which figures the tax based on the odometer reading. Annalee Newitz, a policy analyst for the Electronic Frontier Foundation in San Francisco, which monitors privacy issues, said if the device "can communicate with a satellite and then communicate back with another device on the ground, it could be used for something else. That would be my concern: How are limits placed on how this device could be used?" Yet some transportation experts say the technology has wider implications. Officials are intrigued by the idea because California could begin taxing people for using specific roads at specific times. To keep people off freeways at peak hours, for example, per-mile fees for city streets could be pegged at a lower rate than the highway. That could prompt people to use alternative routes. Revenue from the gas and diesel fuel tax-about $3.3 billion-will have declined 8 percent between 1998 and 2005, adjusted for inflation, but the amount of miles traveled by cars and trucks on California roads has increased 16 percent, analysts said. The California Transportation Commission said the state needs about $100 billion in road and freeway repairs. With more Californians driving fuel-efficient cars, auditors warned, less gasoline consumed means less money for the state's coffers from the gas tax, even though people are driving and damaging roads just as much.