California’s Per-Mile Road Tax Proposal Gains Urgency as Washington Targets Newsom’s 2035 Gas-Car Ban
(CLAIR | Simi VAlley, CA) — California is rethinking how it funds its roads — just as Washington is moving to block the state’s most ambitious climate policy.
The California Department of Transportation (Caltrans) is studying a per-mile road charge that would eventually replace the state’s gas tax. For nearly a century, that tax has paid for most of California’s highways and bridges. But it’s now declining fast — a direct consequence of Governor Gavin Newsom’s plan to end sales of new gas-powered cars by 2035.
The 2035 Executive Order
In 2020, Governor Newsom signed Executive Order N-79-20, directing the state to phase out the sale of all new gasoline-powered passenger cars and light trucks by 2035. The rule does not ban existing gas vehicles or used-car sales, but it requires automakers to sell only zero-emission vehicles (ZEVs) moving forward.
The governor has called the plan “the most impactful step our state can take to fight climate change.”
But while the mandate supports the Governor’s environmental goals, it also undermines the primary funding mechanism for maintaining the state’s roads — the gas tax.
A Shrinking Revenue Stream
California collects 59 cents per gallon in gas tax — the highest rate in the country. Those taxes fund road repair and maintenance statewide. But as electric vehicles (EVs) and hybrids replace gas-powered cars, drivers are buying less fuel, and the money flowing into road maintenance is falling.
State transportation officials warn that by the time the 2035 zero-emission mandate takes effect, gas-tax revenues could decline by billions each year.
That’s where the per-mile road charge comes in. Instead of taxing gallons of gasoline, California would charge drivers based on how far they travel — ensuring that both EV and gas drivers contribute equally to maintaining the state’s roads.
A recent Caltrans pilot program tested multiple options for reporting mileage, including odometer checks, plug-in devices, and GPS-based transponders. Rates averaged about 2.8 cents per mile, roughly equal to what the typical driver currently pays through gas taxes.
“It’s a new way to collect funding for roads and highways — based on how many miles you drive, not how many gallons you buy,” Caltrans said when it announced the pilot.
Pushback from Washington: A Political Collision
California’s push for a zero-emission future — and the resulting need for a new funding model — has now drawn sharp resistance from Congress and the White House.
In May 2025, the U.S. House of Representatives voted 246–164 to overturn California’s plan to ban new gas-car sales. The resolution, known as House Joint Resolution 88, seeks to revoke the EPA waiver that allows California to set stricter vehicle-emission standards than federal law.
That waiver, first granted under the Clean Air Act, is what gives California legal authority to enforce its 2035 mandate.
House Republicans, joined by 35 Democrats, argued that California’s rules would effectively dictate vehicle policy nationwide. Representative Kevin Kiley (R–Rocklin) called the plan “California’s insane gas car ban,” while Representative Doug LaMalfa (R–Oroville) said the state was “forcing Americans into unaffordable electric vehicles.”
The Senate followed weeks later, voting to block California’s waiver as well. Senate Majority Leader John Thune (R–South Dakota) said the state’s large auto market — roughly 11 percent of all U.S. car sales — would make its rules “a de facto national mandate.”
Republicans also used a procedural change to bypass the Senate filibuster, passing the repeal by a simple majority — a move Democrats called unprecedented.
President Donald Trump is expected to sign the resolutions, effectively nullifying California’s authority to enforce its 2035 ban.
A National Debate Over the Future of Driving
The conflict underscores a broader question: how will the United States fund, power, and regulate its transportation system in a post-gasoline world?
The Infrastructure Investment and Jobs Act of 2021 required the U.S. Department of Transportation to test a federal Vehicle Miles Traveled (VMT) system — similar to California’s proposal — as fuel-tax revenues decline nationwide. States like Oregon, Utah, and Hawaii have already implemented pilot programs of their own.
In Hawaii, for example, electric vehicle owners now pay $8 per 1,000 miles, capped at $50 per year, or a flat annual fee. Oregon’s OReGO program charges volunteers 1.9 cents per mile while crediting them for the state gas tax they would otherwise pay.
California’s pilot is the largest and most complex, involving tens of thousands of participants and multiple reporting options. Its findings could influence how other states — and possibly the federal government — handle road funding in the electric era.
Road Quality and Spending Efficiency
California’s road system is among the nation’s most expensive but also one of its least efficient. The Reason Foundation’s 2025 Highway Report ranks the state near the bottom in pavement quality and congestion, despite some of the highest spending per mile.
Experts say that any new revenue system must also address how the money is spent. Without efficiency reforms, critics warn, even a per-mile charge won’t solve the state’s chronic infrastructure backlog.
What Happens Next
Caltrans will release its final per-mile pilot report later this year, and the California Legislature will decide whether to move forward with the program. Lawmakers must determine rates, technology, privacy protections, and whether to begin with electric vehicles or apply the system to all drivers.
At the same time, California faces a legal battle over whether it can enforce its 2035 mandate at all. If Washington succeeds in revoking the EPA waiver, the entire framework for the state’s clean-car policy — and its per-mile replacement tax — could be upended.
