Blog Mileage Tax Gets Boost From Peters, Mineta Institute

Secretary of the U.S. Department of Transportation under George W. Bush, Mary Peters recently told the Austin-San Antonio Corridor Growth Summit that the country needs to move toward a vehicle miles traveled (VMT) tax to replace the failing gas tax. At the same time, a new survey conducted by the Mineta Transportation Institute at San Jose State University shows drivers warming to a mileage tax if lower emission vehicles get discounted rates. At issue is how to pay for maintenance and expansion of roads and transit systems after 40 years of vast growth in system use, and looking toward a tricky double-whammy. More population and jobs in coming decades will strain metro-region surface transportation systems, while flattening per-capita miles driven and greater fuel efficiency are curtailing growth in the per-gallon gas tax revenues that have traditionally been the prime source for surface transportation funding.
Broad implementation of the mileage tax is at least 10 years off, maybe 15. In the nearer term, variable-rate, electronically tolled express lanes are needed aside free lanes on major metro region highways, along with expanded opportunities for public private partnerships and other local and regional funding tools. Eventually, the mileage tax could be levied for travel on arterial and feeder roads, plus highways, with discounts for less congested routes, and possibly, lower emission vehicles. Incentives such as pay-per mile car insurance and meter-less, ticket-less parking could help compensate for privacy concerns. With a slew of VMT pilot projects, technical studies and surveys completed and more underway or coming, this bold policy initiative continues to gain momentum. Here’s the San Antonio Express-News on Peter’s remarks:

With gasoline tax revenue plummeting as people drive less and vehicles become more fuel efficient, federal and state agencies must find a new tax to maintain and expand the nation’s highway and road system, former U.S. Transportation Secretary Mary Peters said here Friday. Peters said she favored a vehicle miles tax, or VMT, as a replacement to the decades-old gasoline tax, not as a supplement to it. “The technology exists for it,” Peters told about 400 people attending the Austin-San Antonio Corridor Growth Summit at the San Marcos Convention Center. A vehicle miles tax would be levied by navigational devices in vehicles. Mileage information would be read by other devices at gasoline stations. The tax rate could be adjusted to higher rates for driving in high-traffic corridors and/or for larger, less-fuel efficient vehicles.
…”Americans are driving less, using less fuel and therefore contributing fewer revenues to transportation even at a time when our needs are increasing substantially,” said Peters…The federal highway trust fund required extra allocations beyond gasoline tax revenues the past two years to remain solvent, she said. “Medicare, Medicaid and Social Security are taking increasing amounts of federal nondefense discretionary revenues, leaving transportation to compete for funding with education, health care and climate change. We won’t win that battle,” she said.

Meanwhile, California drivers surveyed by the Mineta Transportation Institute warmed to the mileage tax concept (see p. 67 here), and higher vehicle registration fees (see p. 66), but only if lower emission, less-polluting vehicles were given discounts.
Best practices also stipulate that any mileage tax rates would be higher when a driver uses congested roads and lower when less-busy routes are used. California has been zeroing in on how to accurately report vehicle location in the trickiest environments. Field tests were supervised by California’s transportation officials with high-grade custom GPS units from Toronto’s Skymeter Corp., which Caltrans says clearly bested off-the-shelf competitors in revealing vehicle routes San Francisco’s tricky high-rise “urban canyons.” (Disclosure: Skymeter’s founder and Chief Scientist Bern Grush is an occasional contributor to this blog).
Lower resolution on-board units (OBUs) typically indicate general geographic zones – such as central city, first ring-suburbs, ex-urbs – but not often precise locations. High-resolution OBUs permit finer calibration of location and related rate effects, but can cost more to manufacture and install. Researchers and policy-makers will continue to grapple with whether to eventually mandate one type of OBU or allow both.