Route Fifty: More Mileage From Mileage Fees

The national gas tax has remained 18.4 cents per gallon since 1993, and despite recent comments by President Trump that he would entertain the possibility of raising the tax to fund infrastructure improvements, many remain unconvinced that movement will happen on that front anytime soon. Clearly the country’s infrastructure could use additional funding: the American Society of Civil Engineers recently graded the U.S.’s infrastructure with a D+, estimating that it would take an additional $2 trillion by 2025 to bring that grade to a B. States are picking up the slack, reports Route Fifty: more than twenty have raised their own gas taxes, while others have increased registration fees and tolls.

Route Fifty argues that the time has come to assess a mileage fee, or Vehicle Miles Traveled (VMT) Tax:

One possible solution—the mileage fee, or VMT tax—seems to be one whose time has come. The tax reorients the transportation “product” that users are paying for with a philosophy more in step with how people travel now. Simply put, drivers pay for their travel based on a per-mile rate. It’s almost like slapping a toll on every road, except that mileage could be measured and billed based on a low-fi transponder, or a high-tech piece of cellphone gadgetry. Drivers could alternatively pay through a one-time annual fee, if they hate the feeling of being “tracked.”

Mileage fees would still need to be kept up with inflation, but they wouldn’t be sensitive to gains in fuel efficiency. They could also be adjusted to reward environmentally sensitive vehicle choices, and policymakers could send chunks of VMT tax revenues towards transit investments, so the fees needn’t be punitive or regressive. …

A VMT tax attracts a politically diverse following: State DOT leaders and policy wonks love it, but so do libertarians at the Reason Foundation. And in many ways, taxing miles better matches the current transportation landscape: This is, after all, an era where technology is rewriting the rules on how people move, and how they relate to transportationMobility is evolving into a service, rather than a commodity, that can be summoned and paid for by an phone—whether by buying a subway ticket, locating a bike rental, or hailing a shared autonomous vehicle. A VMT tax matches that reality. It would be a true “user fee,” gathering dollars from those who drive on roads, without forcing those who get around using other modes to subsidize them (which the current transportation funding structure does, given how weak the gas tax has become).

Route Fifty calls out Oregon, California, Minnesota, Pennsylvania, Connecticut, New Hampshire, Delaware and Vermont for exploring mileage fees and taxes. Maryland’s General Assembly, on the other hand, considered legislation this past session to prohibit the state and counties from assessing a VMT tax, as it has for the previous two years. Senate Bill 284 died in committee.

Read the full article here.