A National Road Tax?

As Americans explore ways to lower energy costs by purchasing fuel efficient vehicles and taking fewer trips, their conservation efforts have sparked concern over ways to fund the nation's aging transportation infrastructure. We have reduced our gasoline consumption too much and worried the powers-that-be. On February 19, 2009, Transportation Secretary Ray LaHood stated the traditional federal and state gasoline taxes are no longer a reliable source of transportation funding. One of the suggestions presented by Secretary LaHood is a pay-per-mile road tax to be levied on every vehicle on the nation's roads.

To be accurate, Secretary LaHood is not the only voice calling for this mileage tax. The National Surface Transportation Infrastructure Financing Commission's 250 page report, "Paying Our Way: A New Framework for Transportation Finance", was released to the President and Congress on February 26, 2009. In it, over thirty pages are devoted to the topic of toll, cordon, and vehicle mileage taxes. In comparison, analysis of the current gasoline tax funding system takes a mere twelve pages. According to the report, a VMT, or Vehicular Mileage Tax, is extremely viable.

The Commission based their favor of a mileage tax on findings from a study of a voluntary pilot program in Oregon. In their own document on page 145, the Commission cites the disadvantages and advantages of the Oregon mileage tax as found in a November 2007 report by the Oregon Department of Transportation. The report states "Public acceptance is not guaranteed" but the in-vehicle recording device can be designed so the motorist is not likely to evade the tax. As with the gasoline tax, the national road tax would be computed when the motorist put gas in his vehicle. The report also finds the initial expense of retrofitting every vehicle in the country with the GPS chip and other equipment could be high, $150 or more per vehicle. The potential for non-compliance is a concern but fines would be levied when a motorist was found to be evading the system. The motorist could pay a higher mileage tax if the GPS chip indicates he drove during peak hours or in an area which was highly congested.

President Obama's press secretary Robert Gibbs affirmed this administration is not in favor of this tax policy. With the added pressure of the Commission report, will the President hold firm?

Ten states have either begun to collect a state mileage tax or are considering the possibility. This includes the state of Minnesota, where my family currently lives. My husband drives about 25 miles one way on an Interstate highway. While he goes to work in the morning well before many vehicles are on the road, he starts home at about the tail end of rush hour. US 61 is the main artery for anyone wishing to travel from Duluth, Minnesota, to Thunder Bay, Ontario. Will he be paying a $150 or more GPS installation fee as well as a mileage tax in the near future?

The road tax is not guaranteed to replace the gasoline tax. With the shaky economy, states as well as the federal government could be encouraged to make the mileage tax a supplement to the gasoline tax. An increase in the federal gasoline tax was also proposed by Secretary LaHood.

As everyone knows, the government giveth tax policies; rarely, does the government taketh away the same.
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Sources:
"Massachusetts Joins States Contemplating Pay-Per-Mile Road Tax Plans", John O'Dell, Green Car Advisor, Edmunds.com. 18 February 2009, http://blogs.edmunds.com/greencaradvisor/2009/02/massachusetts-joins-states-contemplating-pay-per-mile-road-tax-plans.html.
"Panel: Raise Gas Tax, Charge Drivers by the Mile".
http://www.foxnews.com/politics/2009/02/27/panel-raise-gas-tax-charge-drivers-mile/
"Obama nixes plan to tax motorists on mileage", Joan Lowy, 21 February 2009. http://news.yahoo.com/s/ap/20090221/ap_on_go_ca_st_pe/lahood_vehicle_mileage_tax
"Will a Mileage Tax Replace the Gas Tax?" Dan Olson, Minnesota Public Radio, 16 January 2007, http://minnesota.publicradio.org/display/web/2007/01/02/mileagetax/.