There's a lot of controversy surrounding DOT Secretary Ray Lahood's comments regarding a different way of funding road infrastructure payments, as seen in Barb's front page entry.
Lahood's idea isn't a new evil Republican plan cooked up overnight (and he isn't proposing a new tax, but instead pilot programs to study national feasiblity). It's been around for many, many years. And Oregon has already done a pilot program.
The PDF of the full report can be read here. Take the time to check it out and read their conclusions. Whether you support the idea or not, it's worth a skim.
The article from the AP writes and noted the cons of the program as a number of states are already planning pilot programs to test the feasibility of the VMT Tax, of which, there are some:
Most transportation experts see a vehicle miles traveled tax as a long-term solution, but Congress is being urged to move in that direction now by funding pilot projects.
The idea also is gaining ground in several states. Governors in Idaho and Rhode Island are talking about such programs, and a North Carolina panel suggested in December the state start charging motorists a quarter-cent for every mile as a substitute for the gas tax.
A tentative plan in Massachusetts to use GPS chips in vehicles to charge motorists by the mile has drawn complaints from drivers who say it's an Orwellian intrusion by government into the lives of citizens. Other motorists say it eliminates an incentive to drive more fuel-efficient cars since gas guzzlers will be taxed at the same rate as fuel sippers.
Fair, or not fair, transportation funding is going to be a headache for awhile to come. Most here may be unaware but the system almost ground to a complete halt last fall as the Highway Trust Fund that funds everything from simple maintenance to new capacity is, essentially, broke, due to decreased revenues caused by increasing fuel efficiencies, and increased costs due to last years oil bubble.
The program that funds the federal share of highway projects is part of a surface transportation law that expires Sept. 30. Last fall, Congress made an emergency infusion of $8 billion to make up for a shortfall between gas tax revenues and the amount of money promised to states for their projects. The gap between money raised by the gas tax and the cost of maintaining the nation's highway system and expanding it to accommodate population growth is forecast to continue to widen.
Among the reasons for the gap is a switch to more fuel-efficient cars and a decrease in driving that many transportation experts believe is related to the economic downturn. Electric cars and alternative-fuel vehicles that don't use gasoline are expected to start penetrating the market in greater numbers.
"One of the things I think everyone agrees with around reauthorization of the highway bill is that the highway trust fund is an antiquated system for funding our highways," LaHood said. "It did work to build the interstate system and it was very effective, there's no question about that. But the big question now is, We're into the 21st century and how are we going to take care of our infrastructure needs ... with a highway trust fund that had to be plused up by $8 billion by Congress last year?"
The Oregon Pilot program was volunteer. Its key findings were:
- The concept was viable
- Paying at the pump worked (as that was where the tax was calculated, as it is now).
- The mileage fee can be phased in.
4.Integration with current systems can be achieved.
- Congestion pricing and other pricing options are still viable.
- Privacy is protected as ODOT did not collect specific vehicle point location or trip data. Again, this would of course depend on how much you trusted your state government. The only centrally stored data was the VIN, mileage totals, and amount of fuel purchased.
- Minimal burden on business
- cost of implementation and administration is low.
Of course there are obvious cons, the privacy issue notwithstanding. It is a flat tax, so Hummers and Priuses would be taxed the same (although, in a sense, they are already, since the current gas taxes are also flat. One just gets better mileage then the other.) It isn't a direct carbon tax for those who support that. And revenue wise, it wouldn't capture electric cars (unless your state came up with a way to tax that outside of raising electricity rates.)
I found this interesting argument
But couldn't that kill the electric car?
The cost premium between electric cars and conventional vehicles is steep and it will be for at least a decade, maybe decades. Many believe this cost will be significantly recovered via the relative cheapness of electric power versus gasoline. However, won't pushing Americans to drive less - via a VMT tax - lead to less oil demand and cheaper oil prices?
Of course, the same could be said of electric cars. As they are embraced, there will be less demand for fuel and, therefore, cheaper fuel prices. Ironically, however, electricity prices will increase.
Essentially, our entire automobile culture no longer makes economic sense, at many levels, and fixing that problem is going to have a huge effect on American car culture, and solving the problem is not just going to come down to efficient technologies or even fuel prices.
Essentially that is correct. Car culture isn't sustainable, no matter whether you believe in the climate crisis or not. The current gas tax at both the state and federal levels isn't enough to fund even the basic maintenance of the system and transportation finance folks can only nickle-and-dime people for only so long. Some states charge property tax on cars. Others will just raise their gas taxes (which will plug the hole for a short while, but again, increasing fuel efficiences will erode away that revenue.) I do agree that it's past time for the Federal gas tax to be raised from where it is. I also think the VMT tax could work if a lot of the bugs (the privacy issues, the "fairness" issues) could be worked out. And I also think we should drive less if we can, but I'm not going to lecture people about that (because I don't drive and don't want to sound snotty. I will be driving though by the end of the spring, as I am moving out of town and will have a commute).
This idea may sound like ,on its face, a very bad idea but don't expect it to go away.
A vehicle-miles-traveled system of collecting federal highway taxes would be the best solution for replacing the current federal fuel tax, but a VMT system would offer several challenges, members of a national finance commission said.
The 15-member National Surface Transportation Infrastructure Financing Commission, one of two set up by Congress, has been working the past 18 months to bolster the troubled federal Highway Trust Fund, which commission members said is on the verge of going broke.
The financing commission's conclusions closely paralleled those reached by the separate National Surface Transportation Policy and Revenue Study Commission, but the financing commission operated under a narrower congressional mandate - focusing on the future of the Highway Trust Fund and what should be done about its declining revenue base, said commission member Geoffrey Yarema, of the Nossaman firm.
Yarema and three other commission members presented an overview of their findings, which they formally will give to Gongress in early February, to a meeting of the Transportation Research Board on Jan. 11.
This report will be released next week. Here's the
site.
Lastly, as an aside, if there's an interest in learning more about how we fund transportation I would be happy to occasionally write more diaries about it. Just let me know.