California Just Hid a “Mileage Tax” To Charge Drivers Per-Mile Into the Budget Bill

California’s most recognizable taxpayer advocate, Carl DeMaio, says Sacramento just tried to slip a new “mileage tax” past the public – by burying it inside a larger budget bill. In a video on his Reform California channel, DeMaio, who also serves in the State Assembly, flatly declared he voted “no” and laid out what he sees as the playbook: pass an obscure provision first, normalize the concept, and then expand it until every mile you drive can be taxed.

From Gas Tax to “Track and Tax”

DeMaio argues this was always the endgame. He traces the roots to 2017’s SB 1 gas-tax package, which authorized a per-mile pilot, and claims the broader push picked up steam in Washington with President Biden’s 2022 climate legislation. In DeMaio’s telling, the strategy is “track and tax”: install vehicle technology to measure miles and then charge drivers per mile. Whether you agree with his federal interpretation or not, his larger point is clear – California’s political class is looking for a revenue stream that survives the shift from gasoline to electric vehicles.

The New Play: Hide It in Housing

What makes this moment different, DeMaio says, is how the state is moving. Rather than upfront per-mile charges on drivers, he says lawmakers tucked a “vehicle miles traveled” (VMT) mandate into the budget – he cites Assembly Bill 130 at one point and later refers to AB-150, a reflection of how tangled Sacramento’s omnibus budgeting can be. The key, in his view, is that the state will assess VMT charges on housing projects – not motorists – then let those costs flow through the economy. “Houses don’t drive on roads,” he quips, calling the structure a deliberate end-run around public scrutiny.

How a “Developer Fee” Becomes Your Monthly Bill

DeMaio’s warning is simple economics: developers don’t absorb six-figure fees – they pass them along. If a VMT levy is stapled to each new unit, he argues, it gets baked into the sale price or rent, then spread into mortgages and monthly payments for decades. Politicians will blame “greedy builders” while the root cause sits in statute. You don’t see an itemized “mileage tax,” but you still pay it – every month, for 30 years.

The Eye-Popping Number: $324,000 Per Unit?

The number DeMaio keeps returning to is astonishing: $324,000 per housing unit, which he says is the state’s own estimate of what these VMT charges could add to the cost of a home or apartment. As he notes, that’s roughly the price of an entire house in many parts of the country. If that figure holds even partially true, it’s hard to imagine a state already mired in a housing affordability crisis absorbing it without severe pain. My take: the Legislature owes the public a line-by-line explanation of where that estimate comes from, exactly how it would be calculated, and who, precisely, writes the check.

California’s Cost-of-Living Squeeze, by DeMaio’s Tally

To illustrate the stakes, DeMaio cites a Transparency Foundation analysis claiming the “California penalty” for a typical middle-class family is $28,372 a year, driven heavily by housing costs – 108% higher for homeowners and 47% higher for renters than the national average, by his figures. Layer a six-figure VMT fee onto new housing and, as DeMaio frames it, you supercharge that penalty. Even if one challenges the exact percentages, the underlying reality is indisputable: California housing costs already strain families to the breaking point. Any policymaker advancing a new fee with six-figure implications should have to defend it in the open.

The “Not a Replacement” Warning

DeMaio also stresses that a mileage tax won’t replace existing taxes. He argues you’ll still pay California’s high gas tax and climate surcharges – and then pay again per mile. He floats per-mile rates of 6 to 9 cents, which at 15,000 miles a year is $900 to $1,350 for a two-car family. That’s not theoretical. In states piloting VMT, those are the ballpark numbers planners talk about to backfill declining fuel-tax revenue. If California wants to go there, the bare minimum should be a one-for-one swap: every new dollar of VMT must retire an old dollar of fuel taxes, with a hard cap and an enforceable sunset.

Evergreen Claims About Federal “Trackers”

The most provocative part of DeMaio’s video is his claim that federal legislation now effectively mandates in-car tracking capability, setting the table for nationwide VMT. Whether you agree with his interpretation of Washington’s recent laws, the privacy questions he raises aren’t fringe. Who collects the data? How is it secured? How long is it kept? Can law enforcement access it without a warrant? Even VMT supporters concede these are real civil liberties issues. If California insists on experimenting, it should start with privacy-by-design (local, encrypted, minimal retention), independent audits, and a statutory bar on non-tax uses of mileage data.

Why Now? The Politics in Sacramento

DeMaio says a direct mileage-tax bill was introduced this session and defeated. In his view, that’s exactly why the VMT appeared in the budget: when a policy can’t withstand committee hearings, roll it into a thousand-page must-pass bill. He expects Gov. Gavin Newsom to sign; the Governor’s office has made no secret of its desire to decarbonize transportation and “modernize” road funding. My view: if the administration believes VMT is the future, it should sell it on the merits – public hearings, district-level modeling, and a clear, voter-facing tradeoff – rather than hiding it in the appendices of a budget trailer.

Will a VMT Improve Roads – or Just Add Costs?

Here’s the policy tension VMT tries to solve: EVs pay little or no gas tax, so as the fleet electrifies, traditional road funding dries up. A per-mile fee aligns revenue with road use across all drivetrains. In theory, that’s efficient. In practice, design matters. Rural drivers rack up more miles getting to basic services; tradespeople and delivery drivers can’t escape the odometer. If VMT is layered on top of existing taxes, it’s regressive. If it’s truly a replacement, with offsets for rural and low-income drivers, maybe there’s a debate worth having. DeMaio’s critique is that Sacramento hasn’t offered the replacement – only the addition.

What Happens to Housing Supply and the Project Pipeline

Tying a VMT fee to housing approvals is an especially volatile choice. California already stacks impact fees like pancakes: school fees, parks, utilities, “inclusionary” mandates. Cities then ask why builders are abandoning projects. If VMT becomes another six-figure line item, marginal projects won’t pencil – and units that might have come to market simply won’t. DeMaio’s core argument lands here: if you want fewer car trips, build more housing near jobs, streamline approvals, and fix transit – not smuggle a road-funding mechanism into construction budgets.

The Implementation Questions No One Is Answering

Even setting housing aside, a real VMT program raises wicked practical questions. Will it be odometer snapshots, GPS dongles, or telematics? How do you charge out-of-state drivers who use California roads? What about privacy for domestic-violence victims or public figures? How do you treat miles on private land, or mixed-use vehicles? DeMaio calls the concept “track and tax” because he thinks Sacramento hasn’t come clean on these mechanics. Until lawmakers can answer them in plain English – and put those answers in binding law – skepticism is warranted.

DeMaio’s Call to Action – and Our Take

DeMaio closes by urging Californians to fight the budget-embedded VMT and to prepare for a renewed push to tax drivers directly per mile. He points viewers to Reform California’s campaign hub and argues that when voters organize, they can still beat bad policy – even in a deep-blue state. My take: regardless of your partisan lean, you should want this debate in daylight. If VMT is so essential, put it on the table with three safeguards: (1) dollar-for-dollar gas-tax replacement with a constitutional cap, (2) hard privacy protections with independent oversight, and (3) exemptions or credits for rural, low-income, and essential-service drivers. Anything less looks like a money grab.

The Bottom Line for Drivers

Per Carl DeMaio, the state just planted the seed for a mileage tax by attaching a “vehicle miles traveled” charge to new housing via the budget – shifting the cost from the gas pump to your mortgage and rent. Even if you’re sympathetic to the long-term need to rethink road funding in an EV world, this is the wrong way to do it: opaque process, no clear tax swap, and massive knock-on effects for housing affordability. Californians deserve a transparent, voter-facing conversation about how we fund roads – not a stealth odometer tax hidden in a budget bill.