Taxing drivers by the mile and not by the gallon

A tax on vehicle miles traveled (VMT) was shot down last year by President Obama. But a new study by respected transportation experts – and a successful pilot program in Oregon – should revive the idea.

As more Americans buy hybrid or electric cars, drivers in traditional gas-only vehicles are bound to start asking: Why should I still be paying more in fuel taxes? Don’t we all use the highways?

Indeed, the gas tax is quickly becoming an unjust way to finance the costs of roads and bridges. All vehicles, whether they be a Hummer or a Prius, use the same infrastructure, which needs to be built and maintained regardless of a car’s fuel type.

There is an alternative, one that is fair, already proven, and, based on a new study by some 80 experts, the best way to start financing surface transportation.

It is a pay-as-you-go fee system based simply on distance, or a tax on “vehicle miles traveled” (VMT). The idea is the centerpiece recommendation of the study, released Monday, called “Well Within Reach: America’s New Transportation Agenda.” The report is based on a recent three-day conference of experts at the University of Virginia.

Oregon already tested a VMT system in 2006-07, using 299 volunteer motorists. The pilot program equipped their vehicles with devices that allowed gas stations to track their mileage during each fill-up. More than 90 percent of the participants said they would agree to use it in lieu of the gas tax, and the state’s governor is now seeking $10 million to expand the program.

At least a half-dozen states are studying a VMT system, which was endorsed by President Obama’s transportation secretary last year – that is, until the White House shot down the idea over political concerns of any talk of a new tax.

The study should help revive this necessary change for maintaining the nation’s 61,000 miles of highways. They’re in urgent need of repair and improvement – even as governments, especially the Federal Highway Trust Fund, collect less and less from gas taxes.

“Innovative thinking is needed to develop the next generation of user fees,” the report states. “Specifically, future funding mechanisms should not depend primarily on fossil-fuel consumption – which the government is actively seeking to discourage through a number of other policies.”

Taxing drivers by the mile won’t be easy. But the report does a service by offering proposals to overcome several obstacles and objections.

The first step is more research, preferably at the state or regional level. A federally funded $16.5 million “road user charge” study is under way in six cities, conducted by the University of Iowa. The prime focus of such research should be to devise a tracking technology that can overcome fears of Big Brother following every driver’s movements. Privacy needs are essential with a VMT system, although the various types of tracking may be no more onerous than what can be done with today’s use of cellphones and credit cards.

The user fee can be calculated by various methods, including the way some states now check mileage during vehicle inspections or by tracking cars using toll-road transponders. Heavier vehicles such as freight trucks that severely damage roads would need a special system.

The report recommends pricing be varied as an incentive to discourage travel during peak traffic or to encourage more fuel-efficient vehicles. And fees need to be indexed to inflation – unlike the current federal gas tax (18.4 cents per gallon for cars), which hasn’t changed since 1993.

“A fee of just one penny per mile would equal the revenue currently collected by the fuel tax,” the report states. “A fee of two cents per mile would generate the revenue necessary to support an appropriate level of investment over the long term.”

Electric vehicles are due to hit the mass market by 2012, and Mr. Obama is pushing automakers to increase their miles-per-gallon averages by 2016. Such changes call for phasing out the gas tax and starting a new financing system that is still based on the concept of users paying for this government service.

The nation’s 50-year-old federal highway system needs it – as tragically seen in the 2007 collapse of an eight-lane bridge in Minneapolis that killed 13 people.

As Oregon already found out, a VMT system would be a welcome alternative to a gas tax that is quickly becoming inequitable.

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