A road map to better US roads
It sounds Orwellian, the idea of tracking drivers from space, then taxing them based on miles traveled. But taxing miles instead of gasoline is a more reliable way to pay for America's highways. And it's not the Big Brother intrusion it appears to be.
Gas taxes – at both the federal and state levels – must inevitably go the way of the gas guzzler.
As vehicles become more fuel-efficient, they'll drink less gas, and thus produce less revenue to maintain and improve America's aging roads and mass transit. Add electric cars to the mix, and this revenue stream turns to a trickle.
This is one reason why a bipartisan blue-ribbon panel this week unanimously recommends replacing the federal gas tax with a tax on "vehicle miles traveled" (VMT) by 2020 – and indexing it for inflation. (At 18 cents per gallon, the federal gas tax has gone unchanged since 1993.)
In Europe, the Netherlands will transition to a VMT by 2014 and Denmark by 2016. Massachusetts, Oregon, Rhode Island, North Carolina, Minnesota, and Idaho are looking at a mileage tax.
Behind this trend lies another important realization: Financing for transport infrastructure can no longer depend on indirect fees hidden in the overall cost of a gallon of gas but must rely more on direct user fees, such as tolling and congestion pricing.
Gasoline taxes may have sufficed to build the highways of the 20th century, but they've done little to influence vehicle use of roads. Changing behavior is the key to 21st century transport that must unclog crowded highways and reduce dependence on fossil fuels. Taxing miles alerts drivers to the real cost of using roads and can better motivate them to drive less.
But critics are ringing the privacy alarm, and also warning of costs to the poor who must drive.
These fears can evaporate once Americans learn how the VMT works. Oregon tested the idea in 2006 with vehicles outfitted with GPS transponders. When the drivers pulled up to designated gas stations, devices at the pump calculated how much they owed in mileage tax and adjusted their gas bills.
Like a one-way television signal that doesn't communicate back which TV show a person is watching, Oregon used a one-way signal that simply tracked miles, not destinations.
As for burdening the poor, the VMT is a wash compared with a gas tax. People who drive a lot today – whether poor or not – pay more in gas taxes because they buy more gas. The same would hold true for a mileage tax: Drive more, pay more.
As it turns out, 9 out of 10 of the drivers in the Oregon experiment preferred the mileage tax to the gas tax; about 20 percent changed their driving habits.
Last week, the US Department of Transportation secretary spoke favorably of the VMT, but the White House press secretary quickly dismissed the idea – odd for an administration interested in innovation.
Members of Congress, which commissioned the panel in the first place, can drive the VMT idea when they reauthorize the surface transport bill, which expires this year. Well they know the fragility of the federal Highway Trust Fund, which last year neared bankruptcy and needed an $8 billion infusion because the gas tax couldn't keep up with repair and improvement needs.
A VMT is the more reliable and efficient way to pay for transport. Its time has come.
