Cash Strapped California Exploring Vehicle Miles Traveled Tax
California is exploring the possibility of a voluntary Vehicle Miles Traveled (VMT) Tax to help make up for the shortfall in highway funding that is derived from the increase in vehicle fuel efficiency.
The VMT was proposed by State Senator Mark DeSaulnier (D-Concord), who says that the gas tax is no longer a sufficient source of revenue for highway maintenance. Both Oregon and Washington have voluntary VMT programs, with Oregon charging 1.5 cents per mile.
The spectre of a gas tax funding shortfall was first explored by former EIC Ed Niedermeyer back in 2011. Rather than summarize Niedermeyer’s conclusions, I’d urge you to read it in full for a primer on the issue.
As it stands now, the United States has very low gas taxes relative to the rest of the world, and increasing it would be political suicide for many politicians. Americans have oriented their lifestyle towards driving long distances in big trucks and SUVs. Anyone attempting to mess with that formula is sure to have a very short political life.
The irony is that in the endless quest for fuel efficiency, gasoline consumption – and by extension, gas tax revenues – have fallen to the point where they are no longer sufficient to pay for highway maintenance and badly needed infrastructure repairs. The VMT is being proposed as an alternative in some jursidictions.
Of course, the VMT has numerous implications, including privacy concerns. The current climate is already somewhat hostile to further government intrusion, given the recent NSA spy scandal. With driving considered as one of the last activities that is largely free from data logging or excessive government oversight, the idea of tracking, via GPS technology or other methods.
Beyond that, there are likely incentives associated with a move to VMT. Will people drive less, and avoid paying the tax? Will motorists hang on to older vehicles longer, in an attempt to avoid being tracked, which in turn weakens sales of newer, fuel efficient cars? The whole thing seems like a giant Catch-22. It’s not the last we’ll hear of it.
More by Derek Kreindler
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