It is about time that politicians in Washington and at the state level started paying attention to this foreseeable problem. For at least six years, we have been writing about and telling anyone who would listen that the current gas tax is obsolete.
Why does the system need be changed? Several reasons, primarily though, is that the revenue is going to fall due to the increase in gas mileage in cars and the emergence of the electric car. An electric car such as a Tesla Model X, that costs anywhere from $80,000 to $100,000 gets a literal free ride on our roadways. Since they do not purchase gasoline, they do not pay any gas tax and therefore they pay $0 to maintain the roads and bridges on the interstate system or their local roads.
Meanwhile the young person who has put together a summer mowing route to put money away for college, is buying gas for their mowers and therefore paying to maintain the roads that their mowers will never touch. Hardly seems fair.
A mileage tax is a user fee, the more you drive, the more wear and tear you cause to the roads, the more you pay to maintain the roads. Seems fair and reasonable.
When we started working on this issue, five or six years ago, we began to write an article to give to one of the trade journals. There was one problem, we could not get one member of congress or one congressional staffer to go on the record with any type of comment about altering the gasoline tax. To have members of congress, republican committee chairman openly discussing the issue is progress. Good for them and let’s get this problem solved.
What are your thoughts?
Christopher M. Hopkins
River Landing Solutions
Congressman Graves supports a switch to a VMT fee, but it’s a long way off
Graves‘ idea has at least one important champion: House Speaker Paul Ryan.
By TANYA SNYDER 05/08/2018 11:38 AM EDT
It’s by no means assured, but if Rep. Sam Graves takes the gavel of the House Transportation Committee next year, he’ll be well-positioned to try to push through a shift away from gasoline taxes toward a vehicle miles traveled fee — but such a move toward a largely unproven regime with risky political optics would require an enormous sea change away from the status quo.
Could he do it?
He certainly seems interested. The Missouri Republican, who is vying for the chairmanship along with Jeff Denham (R-Calif.), wrote in a recent op-ed that “if we aggressively pursue this option we can put ourselves in the best position to achieve the goal of long-term, sustainable funding for infrastructure projects — something we all want.”
Robert Poole, director of transportation policy at the libertarian Reason Foundation, praised Graves as “far-sighted” for “seeing that we need to make the transition.”
A “user pays” principle is a foundation of the U.S. transportation system, but cars are increasingly more fuel-efficient, and some don’t use gasoline as a fuel at all, which erodes the Highway Trust Fund. Plus, the gas tax has been stuck at 18.4 cents per gallon for the last 20 years, while inflation has eaten away 43 percent of its buying power.
Raising or indexing the gas tax would help plus up the Highway Trust Fund in the short term, but tying transportation funding to gas consumption is a losing game in the long run. A VMT fee would free the HTF from reliance on gasoline and charge drivers more directly for their usage of the roads. In the process, Congress could index the new fee to inflation, solving the sustainability issue that has dogged the gas tax.
A VMT fee has its detractors, though.
Privacy concerns are the biggest public relations obstacle. Some people simply don’t like the idea that the state is tracking their movements — and as a political matter, this kind of concern is relatively easy to use as a wedge issue, which makes politicians nervous.
Another relatively common complaint about VMT is that it’s unfair to people who live in rural areas, where distances are greater. Congestion pricing could be a solution — charging people more for driving in congested urban areas — but it relies on GPS.
Besides, even the system’s greatest supporters warn that a national VMT system is still years away, leaving no good medium-term solution in sight, since raising the gas tax is politically anathema.
Poole has said for some years that though VMT is a good solution, it’s simply not ready for prime time; he has said it could take as much as a decade to properly lay the foundation for a switch-over.
“I think the best role for Congress at this juncture is to continue funding pilot programs and get us to learn as much as we can over the next five or 10 years,” Poole said. “I think the states very clearly will be the leaders in this, and the federal government will probably be the one that brings up the rear.”
Indeed, Congress approved $95 million in the FAST Act to support state experiments with VMT fees. So far, the Federal Highway Administration has awarded about $30 million in grants. A consortium of 14 Western states are studying everything from pay-at-the-pump options for VMT to interoperability issues when drivers cross state borders, but Oregon is the unmatched leader.
No longer in the pilot phase, Oregon now has a permanent VMT fee program, but it’s voluntary and doesn’t yet make any money.
“We’ve demonstrated that the technology works; we’ve demonstrated that the business model — the system around billing and things like that — that also works,” said Michelle Godfrey, spokeswoman for the Oregon DOT’s “OReGO” program.
Oregon is now working with California and Washington to test the interoperability of state VMT systems so that people can pay for their miles driven in the state where they drive them.
That works best when people opt for a GPS-based payment system, but Oregon law requires the option of an alternative to GPS, and a small fraction of OReGO’s voluntary users do opt for what is essentially an odometer reading.
Some industry interests, such as the American Trucking Associations and the U.S. Chamber of Commerce, are skeptical of a VMT fee. They say hiking the gas tax is the preferred solution because the system for collection is already in place and the public is used to it.
Darrin Roth, ATA’s vice president of highway policy, cautioned that setting up new administrative systems for fee collection will take a long time and require a huge amount of work on the part of the IRS.
“If every vehicle has to have an account, you’re looking at somewhere around 250 million individual accounts that will have to be tracked, taxed, enforced,” Roth said. “And those systems are nowhere near in place right now and likely won’t be in place for many, many years.”
After the hearing last month, Graves gaggled with a handful of reporters. “Everybody wants to talk about gas tax,” he mused. He said he thinks the gas tax is regressive and besides, “it’s a pretty tough lift” to get Congress to raise it. He argued for implementing VMT fees in the commercial sector “right away.”
Still, the political cost of raising transportation revenues at all, whether via gas tax or VMT, is too much for even Graves, who says a VMT system would have to be “revenue-neutral,” at least at the beginning — meaning it wouldn’t actually solve the HTF’s solvency crisis, at least initially.
Though the current T&I chairman, Bill Shuster (R-Pa.), flirted with the idea of VMT back in 2014, he’s now on board for a 15-cent gas tax hike. And President Donald Trump has reportedly said behind closed doors that he’d go as high as 25 cents.
Graves‘ idea has at least one important champion: House Speaker Paul Ryan, who in 2015 called a VMT fee “innovative” and suggested it would be “a more accurate, consistent system.” But with Ryan announcing his retirement this week, that’s one fewer powerful ally for Graves.
“Everything’s on the table,” Graves said after Ryan made his announcement. VMT “is my personal preference, and it was obviously Speaker Ryan’s and with him leaving that obviously takes his support away, but there are others out there.”
Brianna Gurciullo contributed to this report.