The California Transportation Commission convened the Road Charge Technical Advisory Committee on February 28, 2025, to discuss critical issues surrounding transportation funding and the potential implementation of a road user charge. The meeting focused on the evolving landscape of transportation revenue, particularly in light of declining fuel tax revenues and the introduction of transportation improvement fees.

The meeting began with a presentation highlighting the current state of Senate Bill 1 (SB 1) revenue collection, which continues to grow despite a noticeable decline in fuel tax contributions. This decline is somewhat offset by new fees collected during vehicle registration for both traditional and zero-emission vehicles. The committee acknowledged the importance of maintaining transparency regarding these revenue streams, especially as the state has been exploring road user charges for over a decade.

A significant portion of the discussion centered on the need for an evidence-based approach to evaluating various taxation methodologies. The committee commissioned a literature review to assess the pros and cons of different options available for California's transportation funding. The findings will culminate in a report that outlines the best practices for taxation in the transportation sector.

The committee identified seven key principles that should guide the evaluation of any new tax system. These principles include simplicity, robustness, fairness and equity, sustainable revenue generation, efficiency, security, and integration. Each principle was elaborated upon, emphasizing the need for a tax system that is easy for taxpayers to understand, equitable in its application, and capable of generating reliable funding for transportation infrastructure.

The discussion also touched on the importance of ensuring that taxes are imposed only on those engaged in the targeted activity, thereby reinforcing the concept of user fees. The committee underscored the necessity for transparency in how tax revenues are utilized, ensuring that taxpayers are aware of the purpose behind the taxes they pay.

As the meeting concluded, the committee expressed anticipation for the upcoming report, which is expected to provide a comprehensive analysis of the proposed road user charge and its potential role in California's transportation funding strategy. The next steps will involve reviewing the report and determining the best course of action to address the challenges posed by declining fuel tax revenues.