The San Diego Association of Governments board voted recently to formally ditch plans for a regional road user change, sometimes referred to as a “mileage tax.”
A mileage tax was seen by some local officials as a way to reduce greenhouse gas emissions and/or a funding mechanism for transportation projects. Similar systems are in place across Germany, Hungary, Switzerland, New Zealand and other countries. Other states are also exploring the idea, including Illinois and Oregon.
The idea of a mileage tax has been hotly contested locally. Supporters said it was more fair than current gas taxes, while opponents felt the idea of tracking drivers was un-American and a violation of privacy.
Q: Did the SANDAG board make the right call on excluding the mileage tax?
Bob Rauch, R.A. Rauch & Associates
YES: The SANDAG board made the right choice to stop the mileage tax. It would cost most taxpayers between $550 to $800 per year on top of requiring us to pay among the highest tax rates of any state. It would require a tracking device that would clearly be an invasion of privacy. When we stop following the state’s lead on taxes and regulations, we will once again emerge as America’s Finest City.
James Hamilton, UC San Diego
YES: A mileage tax punishes people who invest in electric or fuel-efficient vehicles. By contrast, a gasoline tax is directly related to the vehicle’s carbon emissions. A new mileage tax would also require costly and intrusive new infrastructure to collect the tax. We should instead be looking for ways to spend our highway funds more efficiently. According to 2021 data from the Reason Foundation, California spends almost eight times as much in administrative costs per mile of lane compared to Texas.
Austin Neudecker, Weave Growth
YES: The milage tax seems contradictory to the stated goals of raising the gap in funds for road repair and disincentivizing pollution. If one goal is achieved, the other is sacrificed. Californians already pay the most for gas, yet traffic is not decreasing. Meanwhile, the economics and feasibility of owning an electric vehicle continue to improve. I am also concerned about the implementation of a law that requires tracking each vehicle for accurate assessments.
Chris Van Gorder, Scripps Health
YES: SANDAG must develop policies that generate enough revenue to maintain our transportation infrastructure and reduce pollution. However, in a state with one of the highest, if not the highest, total taxes in the country, this would have been the most unpopular of all. A mileage tax would have hurt the most vulnerable in our communities and would force some people to avoid leaving their homes in their cars because of the cost.
Jamie Moraga, Franklin Revere
YES: The proposed mileage tax was controversial and widely disliked by most San Diego County residents. San Diegans are already burdened with high taxes, skyrocketing gas and utility prices, and median housing prices hitting $1 million. Adding another tax that tracks and taxes residents per mile violates personal privacy and erodes public trust. There needs to be a more carrot versus stick approach — imposing more taxes is not the solution.
David Ely, San Diego State University
YES: Gasoline taxes paid by San Diego drivers are already burdensome. There are implementation challenges to overcome, including how to accurately measure mileage and protect privacy. However, with declining revenue from gas taxes, funding alternatives need to be identified. Pilot programs exist and may lead to workable models for taxing mileage. If the federal government or California decide to replace their current gas tax systems with a workable mileage model, then local governments could follow.
Caroline Freund, UC San Diego School of Global Policy and Strategy
YES: While user charges make sense to fund infrastructure, now is not the right time for a new tax. Many folks are already struggling to make ends meet, given high food and energy prices. Moreover, the advantage of gas tax is it incentivizes a shift to smaller, hybrid and electric vehicles. Before implementing a mileage tax, understanding and developing a plan to address potential distributional consequences would be important.
Haney Hong, San Diego County Taxpayers Assoc.
NO: With electric cars becoming more and more prevalent, fuel taxes are no longer the best way to gauge usage. In fact, the burden of financing transportation infrastructure is getting more and more concentrated on those who live farther out and who cannot afford a Tesla. The SANDAG board ought to have instead taken out the gas tax and separately pushed for its repeal while keeping a mileage tax in the plan.
Kelly Cunningham, San Diego Institute for Economic Research
YES: With energy prices already among the highest in the nation, switching to more equitable distribution of usage taxes could be improved, instead of adding yet more layered transportation charges. Such taxes are highly regressive meaning they disproportionately burden low-income households as they take a larger percentage of income from lower earners than higher earners. Costs also fall harder on suburban and rural residents who must drive more for work and daily living than city-dwelling counterparts.
Lynn Reaser, economist
YES: SANDAG was correct in voting against a mileage tax but for maybe the wrong reasons. The means to log miles driven in limited trials (Oregon) have been expensive. A mileage system needs to be nationwide not piecemeal. Electric vehicles now have a free ride. This becomes critical with eventual demise of gas sales and tax. All vehicles will need to be charged not only for miles driven, but also for weight since both factors hasten road aging.
Phil Blair, Manpower
YES: It seems the California public is not comfortable with Big Brother knowing where they drove when. But AI is here to stay so we need to understand the parameters. We do need the find a solution to avoid EVs from riding for free.
Gary London, London Moeder Advisors
NO: No one likes to pay more taxes. But, as the proportion of electric vehicles on the road increases, the level of gas taxes collected decreases. It makes the most sense that users of the roads pay for the roads. That is what they do today. This is a substitution tax. Our policymakers are ignoring the obvious, making excuses, while simply kicking the can down the road so their successors can take the hit.
Alan Gin, University of San Diego
YES: Two worthwhile goals conflict here. The mileage tax is desirable in terms of financing road maintenance under the principle that users of roads should pay for their maintenance. People who drive electric cars don’t pay any gas tax even though they are using the roads. But the gas tax helps in terms of conservation and protecting the environment by giving people an incentive to buy more fuel-efficient vehicles. So excluding the mileage tax is OK and avoids the issue of invasion of privacy.
Not participating this week.
Ray Major, SANDAG
Norm Miller, University of San Diego
Have an idea for an EconoMeter question? Email me at phillip.molnar@sduniontribune.com. Follow me on Threads: @phillip020
