[TransportNews] LAO: Road Charge Pilot Program Update
Road Charge Pilot Program Authorized in 2014
Evaluate Alternative to Gas Tax. Most state funding for highways and roads in California comes from excise taxes on gasoline. Essentially, the gas excise tax serves as a proxy charge for road usage, as taxes paid roughly correspond with miles driven. However, over time changes in the type and fuel efficiency of vehicles have eroded the relationship between fuel taxes and road usage. For example, as vehicles have become more fuel efficient, less gas is used for each mile driven—resulting in a lower amount of gas tax revenue collected even if the number of miles driven remains the same. At the same time, rising construction costs and aging roadways have increased the overall cost of maintaining the state’s highways and roads.
In light of these issues, the Legislature enacted Chapter 835 of 2014 (SB 1077, DeSaulnier), to study the feasibility of a “road charge”—an amount charged to individuals for each mile they drive. The legislation requires the California State Transportation Agency (CalSTA) to conduct a road charge pilot program to analyze various methods for collecting road usage data and report on the feasibility of implementing a road charge on a statewide basis. SB 1077 also required the California Transportation Commission (CTC), in consultation with CalSTA, to create a Technical Advisory Committee (TAC) to guide the design, development, and evaluation of the pilot program. (Please see our March 2015 report The 2015-16 Budget: Transportation Proposals for additional information regarding the requirements of SB 1077.)
Road Charge Pilot Program Implementation
Advisory Committee Released Recommendations in December 2015. In December 2015, theTAC released its recommendations on the structure and features of the pilot program. Figure 1 summarizes several of the TAC recommendations related to the implementation of the pilot program. As shown in the figure, the TAC recommended that the pilot include at least 5,000 vehicles across varying geographic regions, offer various methods for participants to record mileage, and establish privacy protections. The TAC also recommended that participants of the pilot program make simulated payments without actual money being exchanged. In addition to recommendations on the implementation of the pilot program, the TAC also recommended specific criteria to evaluate the program after it is completed, such as the administrative costs of collecting a road charge.
Technical Advisory Committee Recommendations Regarding Implementation of Pilot Program
Offer drivers a choice in mileage recording methods.
Include at least 5,000 vehicles that reflect the fleet currently using California’s roads.
Offer methods to exempt miles driven on private roads or out of state.
Feature specific governance, accountability, and legal approaches to protect privacy.
Test data security features and check for anomalies in mileage reporting.
Assess impacts on lower-income and rural persons.
Simulate payment options and develop a revenue neutral per-mile rate.
Caltrans Selected to Implement Pilot Program. CalSTA selected the California Department of Transportation (Caltrans) to implement the pilot program. The 2015-16 budget provided $8.8 million for Caltrans to contract with consultants to both provide technical assistance to the TAC and to implement the pilot program. In July 2016, Caltrans began a road charge pilot program based on the TAC’s recommendations. By August 2016, Caltrans enrolled 5,000 vehicles from individuals who volunteered to participate in the pilot program. Most of the enrolled vehicles (91 percent) are privately owned, while the remainder of the vehicles are commercial, out of state, governmental, or from tribal lands.
Program Participants Report Miles Driven Through Various Options. In order for the pilot program to effectively determine the feasibility of charging road users based on the number of miles they drive, accurate methods to report actual miles driven is required. The pilot includes multiple mileage reporting options for participants to record the number of miles driven on public roads in the state. These options are categorized as either low-technology (manual) reporting or high-technology (automated) reporting. Low-technology options include pre-purchased time and mileage permits, as well as manual odometer reading. High-technology options include vehicle plug-in devices, smart phone applications, and built-in technology found in newer vehicles. The various options were offered in order to (1) address privacy concerns by providing some options that do not involve electronic tracking and (2) assess the accuracy of reports of miles driven under various methods. More than 80 percent of privately owned vehicle participants chose a high-technology option that automatically records their mileage.
Pilot Program Will Continue Through March 2017. The pilot program will last for nine months, terminating in March 2017. During this time, Caltrans will conduct several key activities including:
Simulate Payment of Road Charge. As recommended by the TAC, participants of the pilot program will not exchange actual money. Pilot participants will receive simulated invoices for their reported mileage and will only make simulated payments for those charges.
Assess Accuracy of Mileage Reporting. In order to assess the accuracy of the miles reported by participants, the pilot program includes a review of data anomalies. However, mileage reporting fraud and the type and level of enforcement necessary to prevent or identify individuals attempting to avoid paying a road charge will not be tested in the pilot.
Survey Program Participants. Throughout the pilot program, interviews and surveys will be conducted periodically to assess the experiences of the participants. For example, participants will be asked whether their chosen technology was user-friendly and appeared to accurately report their miles driven, and their views on making simulated monthly payments.
Final Report on Road Charge Pilot Program Due June 2018. After the conclusion of the pilot program, SB 1077 requires CalSTA to submit a report on the results of the pilot to the TAC, the CTC, and the Legislature by June 30, 2018. Specifically, the report shall include the following information:
Costs, feasibility, and public acceptance of charging a mileage-based fee.
Recommendations to ensure individual privacy rights are protected.
Advantages and disadvantages of various types of data collection technology.
Any issues related to road charge implementation or complexity.
After the road charge pilot program is completed, the Legislature will want to review the final report and ensure that it has sufficient information necessary to determine whether a road charge should be implemented on a statewide basis as an alternative to fuel taxes. Such necessary information includes the (1) specific costs and challenges related to the enforcement of a mileage-based road charge, (2) privacy concerns of the general public related to collecting their mileage data, and (3) overall administrative costs for a road charge program at the statewide level.