Transportation Secretary Considers Pay-Per-Mile Tax

by Edward Niedermeyer

Published: February 20th, 2009

transportation secretary considers pay per mile tax

Transportation Secretary Ray La Hood is considering a transportation tax based on miles driven, to replace gasoline tax revenue. “We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled,” La Hood tells the Freep, echoing proposals being considered by Oregon, Idaho, Rhode Island, Massachusetts and North Carolina. La Hood argues that gasoline tax revenues “can not be relied on” to fund infrastructure maintenance, presumably because relatively high prices have caused a downturn in gas tax revenue. “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?” For La Hood the answer to that rhetorical question is “by putting GPS chips in your car and charging you by the mile.”

LaHood has firmly ruled out increasing the gas tax “in a recession,” but Vehicle Miles Traveled (VMT) is hardly a short-term solution. According to Rob Atkinson, president of the National Surface Transportation Infrastructure Financing Commission (the guy who figures out how to fund infrastructure) says it will take the better part of a decade to impliment a national VMT scheme. By then the “recession” argument against increasing the gas tax should be gone, and conveniently that method would avoid having to build, maintain and monitor millions of GPS chips. Meanwhile, the only real argument against raising the tax on gas (for which demand is quite inelastic) is political cowardice. La Hood might consider the VMT scheme “thinking outside the box,” but an enormous infrastructure of GPS chip makers, monitors, maintenance, and assessors (not to mention the possibility of privacy intrusions, a notion La Hood airly dismisses) is hardly a streamlined, efficient approach to the problem.

Edward Niedermeyer

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Johnthacker on Feb 24, 2009
johnthacker, again, you are dead wrong: the Houston study is particularly illustrative. Urban drivers (people who, when they drive, are much more likely to drive a given mile on a road that receives no gas tax funding) are paying most of the difference; general funds make up the rest. M1EK, once again, you can't read. First of, I said AT THE FEDERAL LEVEL roads were not subsidized until last year's highway bill. That is true. There were and are several different factions in Congress. One group of conservative Republicans both did not want to spend more highway money and did not want to raise the gas tax. Another group of liberal Democrats wanted to spend more highway money (and add some mass transit and rail funding) and raise the gas tax. A group of moderates in the middle wanted to not raise the gas tax but raid the general fund in order to raise highway money. The moderates won. I'm sure you could find some way to blame in solely on Republicans, M1EK, but note that the same thing happened in the stimulus bill as well. The Congressional Democratic Party, or enough of it, has decided that raising the gas tax is a political loser, but that more highway spending is a political winner. Mass transit and rail advocates are happy with the bigger crumbs that they're getting, and generally choose to ignore that fact that last year and this year have seen the largest federal subsidy of roads paid for by non-drivers in history. Secondly, I said that there's a distinct difference between arguing that "roads/drivers are subsidized in general" and "urban drivers subsidize suburban drivers." There are two separate arguments there. I said I think you're on much firmer ground arguing that urban drivers are more heavily taxed than you are arguing that roads in general are subsidized, or that urban non-drivers are penalized. Yes, I think that geeber is clouding the issue as well by mixing the two as well. Arguing about whether road funds getting siphoned off to mass transit, general fund, or public school projects outweighs any general fund contributions only affects the issue of whether roads in general are subsidized. However, I don't see much evidence for general fund contributions to the Texas State Highway Fund. Roads can be unsubsidized while certain drivers can still be subsidized by other drivers. One problem with a VMT tax is that it does not tax congestion or other inefficiencies like gas inefficiency. While many rural drivers drive inefficient vehicles, urban driving is inherently inefficient. I think it would be difficult in any case to line up the proper incentives to avoid congestion and make everyone satisfied.

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Geeber on Feb 24, 2009
KixStart: No, YOU go read what I wrote. I got 40 cars out of your way and replaced them all with just one bus. Happy now? You and those bus riders are still sitting in congestion, so getting 40 cars out of the way apparently didn't make much difference...that is based on what you wrote. If congestion had been alleviated, your post would have said, "I noticed that people on the bus looked quite contented as traffic flowed smoothly to its ultimate destination." But, you didn't write that...I'm sorry that this makes you upset, but the simple fact is that most people, when they hear talk about alleviating congestion, don't envision themselves still sitting in traffic, whether it's in a car or in a bus. The fact is that urban non-drivers living in the fine state of Texas benefit from federal gasoline and motor license funds revenues for non-road transportation projects. At the federal level, they are being subsidized by drivers, case closed. Unless they somehow pay federal gas taxes and motor license fees for the fun of it. I have no problem with this, but let's drop the nonsense that drivers are getting some sort of free ride at the expense of everyone else, while bike path users and mass transit riders are not. Second, the fact that you claim that urban non-drivers in Texas receive no state support is not relevant to the rest of the nation (each state raises state transportation funds in its own way), nor does it prove that drivers throughout the nation are getting a free ride. And, third, you keep ignoring that a large portion of Texas gas tax revenues and license fees are diverted to the general fund. When this no longer occurs, we'll talk. M1EK: Drivers ‘as a whole’ only ‘pay their own way’ in the sense that nearly everybody drives. In the sense that matters, i.e. whether they pay somewhat proportionally and fairly to the amount and type of driving they do, the jury is out: suburban drivers are welfare queens. Sorry, but no. And, considering that you are only talking about Texas, you can't extrapolate what happens in Texas to every other state in the union. Each state is responsible for how it raises and spends the money generated by state taxes.

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