Road usage fee bill is a necessary step toward sustainable roads — not a new tax

By Damon Conklin, legislative advocate (infrastructure)

California's transportation funding system is quietly approaching a fiscal cliff - and local governments will be among the first to feel the impact. But a bill put forth by Asm. Lori Wilson, AB 1421, could be the first step to averting the crisis.

For decades, the state's gas tax has served as the backbone of transportation funding, supporting local streets and roads, transit connectivity, and goods movement. However, as vehicles become more fuel-efficient and the state accelerates toward a zero-emission future, that revenue model is breaking down.

According to a report by the nonpartisan Legislative Analyst's Office, under current conditions, California will experience a net transportation funding decline of approximately $4.4 billion - nearly 31% - within the next decade.

For cities already struggling to maintain aging infrastructure, this decline is not theoretical: It is imminent. AB 1421 would extend the lifespan of the Road Usage Charge Technical Advisory Committee, the state body tasked with examining whether a mileage-based user fee could eventually replace the gas tax as California's primary transportation funding mechanism.

AB 1421 would not impose a new tax. Instead, it seeks to evaluate alternatives to a failing system. Cal Cities supports the bill, along with a coalition of unions, the California Chamber of Commerce, local government groups, industry partners, agricultural associations, and others.

Why does this matter to cities?

Cities rely heavily on gas tax revenues brokered by Cal Cities with the passage of SB 1 (Beall, 2017) to resurface streets, repair bridges, and maintain safe, reliable transportation networks for residents and businesses. As electric vehicles proliferate, drivers are contributing little or nothing to the system they use. The result is a growing mismatch between road use and road funding, one that disproportionately harms local agencies with limited fiscal flexibility.

How would it work?

The concept behind a road usage charge is straightforward: Since more drivers are not paying at the pump, they should pay based on how much they use the transportation system, rather than how much gasoline they consume. This idea preserves the long-standing "user pays" principle while aligning revenue with modern vehicle technology. Importantly for cities, a stable and predictable funding source tied to actual road use could help them avoid perpetual backfilling already-strained general funds to maintain local infrastructure.

California is not starting from scratch. A state pilot program completed in 2017 demonstrated that mileage-based reporting and simulated billing are technologically feasible at scale. Other states, including Oregon and Utah, have moved beyond pilots to implementation.

AB 1421 would keep local governments engaged in shaping how any future system might work - particularly on issues of equity, privacy, out-of-state travel, and how to integrate it with those still refueling at gas stations. Those details matter deeply to cities, and continued participation is essential to ensure local needs are reflected in statewide policy decisions.

Allowing the gas tax to decline without a replacement guarantees fewer resources for local infrastructure and greater fiscal uncertainty for cities. AB 1421 does not solve the problem overnight, but it acknowledges reality: California must modernize how it funds transportation, and cities must have a seat at the table.