The law of unintended consequences

Saturday January 19, 2013

For almost as long as the internal combustion engine has propelled vehicles on public roads, states and the federal government have paid for maintaining those roads with a tax levied on each gallon of gas.

In Vermont, that's about 20 cents a gallon. The federal government collects 18.4 cents per gallon in taxes.

In 2006, Vermont collected taxes on 361 million gallons sold, but by 2011, that amount had dropped to 330 million gallons, according to the Associated Press. While it's true that many of us have cut down on unnecessary car trips in the past few years, most of the drop in gasoline sales is attributable to carpooling and higher fuel economy and the use of hybrids and electric cars.

While that's good for the environment, it's not good for the Agency of Transportation, which hoped to raise $232 million in the 2012/2013 fiscal year but is falling short of that goal, just as it has over the past six years, according to the AP report.

Expect the tax revenues to drop even further as higher fuel-efficiency standards are implemented. By 2025, cars are mandated to average 54.5 mpg.

But it's not just about using the roads less or more efficient vehicles on our highways. In 1993, the gas tax was equal to 17 percent of the cost of a gallon of fuel. Today it's only 5 percent.

Now some states, including Vermont, are mapping out a possible alternative: Taxing drivers not based on how much fuel is burned but how far each vehicle travels.

Lawmakers in Oregon are hoping to introduce legislation that would impose a "vehicle miles traveled" tax on cars of 2015 model year or later that get 55 mpg or better. In Washington state, owners of electric vehicles will soon have to pay a $100 tax. In Massachusetts, the state is considering raising the gas tax or implementing a VMT.

Mileage fees would also go a long way to getting trucks to pay for the actual damage they cause to roads. According to the Federal Highway Administration, heavy trucks only pay for about half the damage they cause.

The Government Accountability Office recently issued a report that concluded mileage-based user fees "can lead to more equitable and efficient use of roadways by charging drivers based on their actual road usage and by providing pricing incentives to reduce road use."

Mileage fees could range from .9 cents a mile for cars and 3.2 cents for trucks to 2.2 cents per mile for cars and 8.4 cents for trucks, according to the GAO, depending on whether we want to maintain the status quo or actually improve the infrastructure.

Vermont Transportation Secretary Brian Searles told AP that calculating how much of a VMT tax is owed would be done through the global positioning system devices that are expected to be standard equipment in cars later this decade.

"It's a GPS device that is capable of tracking location, time," he said, adding that he was aware that might raise privacy concerns.

While Allen Gilbert, executive director of the Vermont chapter of the American Civil Liberties Union, didn't say whether he believed it was an invasion of privacy, he did tell AP "I'm sure there's going to be a big public outcry when people hear about this."

But it's not just GPS technology that can be used.

One device records miles traveled since a fill-up and then communicates with the gas pump on the next fill-up how much tax is owed.

There's a discussion about a flat tax, but it would be unfair to those who drive less than, say, 5,000 miles a year, while others are driving 10,000 or 20,000 miles a year.

Other people suggest we should just raise the tax, tack on a carbon fee and also use congestion pricing. Or electrics and hybrids could pay a tax separate from the tax paid by fossil-fueled vehicles.

Another question we would like answered is should a vehicle such as the Escalade pay the same VMT as a vehicle that registers one-third of the weight?

Other than the privacy and technical questions that need to be answered, there's also the question of whether the gas tax would be eliminated in favor of the usage fees. We hope a VMT would replace a per-gallon tax, but we wouldn't put it past the state or federal government to tack on the VMT without eliminating a per-gallon tax.

One thing is for certain, as mileage increases and more and more electrics and hybrids come onto the roads, a new system of taxation to help pay for our bridges and roads will need to be implemented. We look forward to hearing all the ideas.


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