University of California Transportation Center

Since 1923 motor fuel taxes have been the principal instrument by which revenues are raised for the construction and maintenance of the California highway system. Fuel takes are distinguished from most other taxes because they have been conceived of as a "user fee" rather than as a general tax. Federal and state motor fuel taxes, largely levied as charges per gallon of fuel purchased, were originally adopted as the functional equivalent of tolls. Drivers who pay a tax per gallon of motor fuel consumed are paying in rough proportion to their use of the system: those who drive more tend to pay more. In keeping with the user fee principle, the funds collected in fuel taxes traditionally have not been mixed with other government revenues in general revenue bands, but have been isolated in transportation "trust funds" to be used only for specifically designated transportation purposes.