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 taxes 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 funds, but have been isolated in transportation “trust funds†to be used only for specifically designated transportation purposes. As an instrument of taxation, motor fuel taxes have much to recommend them fiscally, politically, and administratively. First, as motor fuel consumption has soared over the past eight decades, so have tax proceeds. Federal and state fuel taxes yielded $4.3 billion in California alone in fiscal year 1996-1997. Second, the tax is paid in small increments, and the current 36.4 cents per gallon levy (18.4 cents of federal tax plus 18 cents of California state tax) is relatively hidden in the price of motor fuel. This particular feature of the tax has tended to minimize organized public opposition to it. Finally, the tax is easy to administer and collect, from both the taxpayer’s and the government’s point of view. The gasoline tax is collected from gasoline distributors rather than directly from retailers or consumers, which minimizes the opportunities for evasion and reduces the cost of collection to an historical average of one-half of one percent of tax proceeds (Crawford 1939;Highway Statistics1945-1995; State Board of Equalization 1923-1997).