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Prospectus Blog Vehicle Mileage Tax Push Alive And Well

U.S. House Transportation and Infrastructure Committee Chairman Rep. James Oberstar (D.-Minn.) says, enough already with studies and pilot projects. Why not just phase in over the next two years the controversial vehicle mileage tax, in order to supplement and eventually replace the flailing gas tax? More from Associated Press:

..Oberstar…(pictured, right) said he believes the technology exists to implement a mileage tax. He said he sees no point in waiting years for the results of pilot programs since such a tax system is inevitable as federal gasoline tax revenues decline. “Why do we need a pilot program? Why don’t we just phase it in?” said Oberstar, the House Transportation and Infrastructure Committee chairman. Oberstar is drafting a six-year transportation bill to fund highway and transit programs that is expected to total around a half trillion dollars.
A congressionally mandated commission on transportation financing alternatives recommended switching to a vehicle-miles traveled tax, but estimated it would take a decade to put a national system in place. “I think it can be done in far less than that, maybe two years,” Oberstar said at a House hearing. He was responding to testimony by Rep. Earl Blumenauer, D-Ore., who recommended…pilot programs in every state to test the viability of a mileage-based tax. Blumenauer said public acceptance, not technology, is the main obstacle to a mileage-based tax. Pilot programs “would be able to increase public awareness and comfort and it would hasten the day we could make the transition,” Blumenauer said.
Oberstar shrugged off that concern. “I’m at a point of impatience with more studies,” Oberstar said. He suggested that Rep. Peter DeFazio, D-Ore., chairman of the highways and transit subcommittee, set up a meeting of transportation experts and members of Congress to figure out how it could be done. The tax would entail equipping vehicles with GPS technology to determine how many miles a car has been driven and whether on interstate highways or secondary roads. The devices would also calculate the amount of tax owed.

Oberstar’s comments may be based in part on savvy bargaining tactics. It’s unlikely a nationwide plan for VMTs would be implemented in just a few years. But when it comes time for his committee and the House to sign off on the reauthorized surface transportation funding bill later this year, he can always justify a large appropriation for further (and important) investigations – and new state and multi-state pilot projects – by noting he’s backing down from an earlier proposal of his to go much faster. In any case, the idea of the VMT isn’t just to enrage taxpayers, though that’s certainly a near-term downside. More from AP:

Gas tax revenues — the primary source of federal funding for highway programs — have dropped dramatically in the last two years, first because gas prices were high and later because of the economic downturn. They are forecast to continue going down as drivers switch to fuel efficient and alternative fuel vehicles.

To get a sense of how the ground has shifted, consider this, in a Tulsa World guest op-ed, from conservative Republican and U.S. Senator James Inhofe of Oklahoma:

…the challenges in continuing to provide a safe and free-flowing transportation network have never been greater. One of the biggest…is addressing the decline of revenues coming into the Highway Trust Fund, the main source of funds that pay for construction and maintenance on our expansive network of highways and bridges. Today, the highway trust fund is primarily supported by taxing fuel by the gallon (18.4 cents for gasoline and a 24.4 cents for diesel). Unfortunately, due to the sluggish economy, high gas prices and an increase in fuel efficiency, we are experiencing substantial declines in tax receipts into the trust fund. This method of using federal fuel taxes to fund our nation’s highways and bridges is no longer adequate to support the growing infrastructure needs in the country. In fact, simply maintaining current levels of highway spending would result in a Highway Trust Fund deficit of about $70 billion by the end of the next highway bill.
In the short term, we are exploring numerous alternative financing mechanisms to increase revenues into the highway trust fund, because no single option will provide a complete solution. We must be willing to explore new options, including expanded use of public-private partnerships; and requiring all users, not just motorists, to contribute to the Highway Trust Fund. In the long term, to ensure that all those who use the system pay their fair share, transportation experts are discussing a user-funded fee for actual miles driven, known as a Vehicles Miles Tax. It is important to note that this system would not raise taxes, but replace the gas tax with a new more accurate collection mechanism.

Hmmnn. Anything that can unite James Inhofe and the deep green advocates at Grist magazine in Seattle, probably has legs. The University of Iowa’s Public Policy Center is currently running a six-region VMT pilot project called The Road User Study. Participants will test the concept on the byways of Austin, Baltimore, the Research Triangle of North Carolina, Eastern Iowa, San Diego, and – this is interesting – Boise. They’re using volunteers with on-board GPS devices in their cars, who will be billed by the miles they travel and which roads they use. They will not actually pay, but will report valuable information on how the system worked for them and under what circumstances they’d be willing to actually pay a VMT in the future. Results will include simulated revenue distribution to jurisdictions, and the thoughts of participants on travel information privacy. A major pilot project in Oregon found this concern could be addressed satisfactorily and that overall, test users would welcome implementation of a VMT system.
Many questions still remain, such as how VMT rates would be fitted to drivers of lower-weight, lower emission vehicles, and to rural area drivers. It’s already clear that in populous metro regions, there must be some degree of discounts for avoiding crowded roads and highways during peak hours, as well as for ride-share and transit vehicles. Another issue is whether the system users will see more robust benefits from federal or state management of a VMT system. Gabriel Roth of the Independent Institute argues strongly here for the latter.
Chairman Obertar’s “do it, already” view reflects some gamesmanship, or heartfelt impatience with the “study, study, study” ethic – or some of both. But his voice is an important one. Oberstar’s strong support for the VMT concept is likely to accelerate the pace of adoption. Because it is already a question not of whether, but when, and exactly how.
RELATED:
Taxing Miles Traveled Is The Most Logical Way To Increase Revenue To Repair Highways,” Janesville Gazette, 5/2/09
A Bridge To The Future,” Greensboro, NC News-Record, 4/30/09
Four Steps To Nationwide VMT,” Bern Grush, et al, Skymeter Corp.
Symposium On Mileage-Based User Fees, 4/14/-4/15/09, Austin, Texas, Texas Transportation Institute.
Hawaii Looks At Taxing Miles Traveled,” USA Today, 4/16/09
Virginia Must Consider Tax Changes For Road Funding, Official Says,” Richmond Times-Dispatch, 4/15/09
What Is It About Mileage Taxes Obama Doesn’t Understand?” Crosscut, 3/5/09
How To Pay For The Roads Still Traveled,” Crosscut, 10/21/08