Mario Vargas, an electrical engineering junior, carpools five days a week from Santa Maria to Cal Poly. Vargas could expect an up to $24 increase in monthly vehicle taxes from his commute, if a new state bill passes, according to the California Road Charge calculator.
Californians could pay a new mileage tax instead of the current gas tax if a new assembly bill passes through the legislature. Introduced in 2025, AB 1421 has sparked debate over affordability and road safety for Californians.
“The only good thing would be if they can speed up road repairs with the bill,” Vargas said. “The roads are pretty rough. Santa Maria has been doing some construction recently but we’ll see.”
The mileage-based fee system, drafted by Democrat Assemblymember and Transportation Committee Chair Lori Wilson, would create a pilot program to research and assess the system. The Transportation Agency would then implement the pilot program based on their research findings.
“As California leads the transition to fuel efficient and zero emission vehicles, we must modernize our transportation funding system,” said Wilson in a state assembly hearing. “We need to continue to examine proposed solutions to address the state’s funding needs in a way that is fair, affordable, transparent and built to last.”
The proposed mileage tax would apply to all cars, including electric vehicles. Kenzie Cassara, an English sophomore, voiced her concerns about the bill’s cost and impact on college students.
“If it’s supposed to level out the playing field and pay as much as gas vehicles, by raising taxes for everybody you’re making it worse for gas drivers already and now electric vehicles,” Cassara said.
John King, a wine and viticulture senior, is an out-of-state student from Washington and said his state is experiencing issues similar to California.
“We also had a huge increase in electric vehicles, which has caused a problem,” King said.
The state and counties will face a $31 billion shortfall by 2035 due to declining revenue from the gas tax, according to the California Transportation Commission. The decline is largely due to the push for zero-emission and electric vehicle manufacturing in the automotive industry. King expressed his optimism for the bill.
“In the long run, it will benefit us,” King said. “Road infrastructure is so important for the economy. Down the line, the research they come up with could really help the state.”
California is the state with the highest paying gas tax per gallon, sitting at 0.71 cents. The gas tax is the largest source of funding for the state’s transportation infrastructure. It is used exclusively for “research, planning, construction and improvement of exclusive mass transit guideways,” according to AB 1421.
“How do we ensure all motorists pay their fair share, no more and no less, while protecting affordability?” Wilson said.
She said that all income groups are impacted differently. Lower income residents are more likely to drive less fuel efficient vehicles, costing them more.
However, Republican State Assemblyman Carl DeMaio expressed his concerns with the bill in the same hearing. He described the mileage-based fee system as a “sucker-punch” to middle class families.
California’s AB 1421 will go to the Senate committee on March 24, according to CalMatters.
How is San Luis Obispo responding to the gas revenue decline?
San Luis Obispo County lawmakers have considered a half-cent transportation sales tax, which would implement a tax on any sale in the county. The increase would help supplement the loss in gas tax revenue due to increased electric vehicle drivers, according to the County of San Luis Obispo Board of Supervisors. The bill was estimated to generate $35 million annually with a gradual increase in revenue over time.
If passed, lawmakers would allocate the generated revenue to road, highway and freight line repairs. The rest of the funds would go towards senior, disabled and veterans mobility improvements, as stated in the County of San Luis Obispo Board of Supervisors meeting.
San Luis Obispo County and California are not alone in this struggle. Connecticut’s gas tax revenue fell by 4.2% from 2012-2021, and West Virginia’s revenue will fall between 11% and 20% by 2030, according to Wilson.
The San Luis Obispo tax will be on the ballot in the upcoming November 2026 midterm elections.