Obama Wants to Study Viability of Mileage-Based Fee for Transpo Revenue

Thanks to The Hill and CQ for reading President Obama’s transportation bill draft [PDF] more thoroughly than I did – they discovered a significant detail that I’d missed. Despite his administration’s insistence that they won’t consider an increase in the gas tax or other user fees, Obama’s bill includes language establishing a Surface Transportation Revenue Alternatives Office within the Federal Highway Administration, which would in turn create a Surface Transportation Revenue Alternatives Policy Decision Group to study the feasibility of a VMT fee.

A monitor like this would be installed in cars to track their mileage. Photo: ##http://www.statebrief.com/briefblog/2011/03/26/energy-efficiency-is-overrated/##State Brief##

The bill language specifically acknowledges the need to include in such a system vehicles that don’t use taxable fuel. That’s a primary reason for the switch – reliance on a gas tax becomes less and less sensible when more and more vehicles are using alternative fuels, or less fuel altogether.

Besides, a vehicle-miles-traveled fee can also sense if you’re traveling into a city a rush hour and charge you a congestion fee, or can levy different charges if you’re leaving one jurisdiction and heading into another.

In addition to conducting field trials to test VMT tracking systems, the bill also seeks to “increase public awareness regarding the need for an alternative funding source for surface transportation programs.” Funding for the program jumps from $20 million the first two years to $130 million the third year, presumably when the field tests get underway, then falls again.

Some field trials and pilot studies of mileage tracking systems have already been conducted. Paul Hanley, a transportation engineering professor at the University of Iowa, conducted a trial over eight months in 12 regions, from major metropolitan areas to small towns. His team gave 2,500 people an onboard computer to track their driving and charge them accordingly. During the eight month study, those 2,500 people drove more than 22 million miles in all of the lower 48 states.

Researchers found that the technology was adequate, that it captured needed data well and that users accepted it. However, the installation of the onboard computers was time-consuming and expensive – potentially offsetting the fees collected from the system.

One of the major concerns that arise with VMT systems is that they’re an invasion of privacy, since they track where people drive. Hanley’s team confronted this problem but found that it was not “insurmountable.”

Every month, the study participants received a bill. They found it invasive when the bill was too detailed an audit of their every movement, but liked that they could figure out where the charges came from. Thirty percent of them felt the VMT tracking system was inherently too invasive, but 70 percent thought it was a viable replacement for a fuel tax.

In the end, Hanley found that VMT tracking, despite kinks yet to be worked out, offers a viable and potentially preferable system to the fuel tax. We’ll be interested in the results of President Obama’s study team – if Congress appropriates the funding to create it, of course.

13 thoughts on Obama Wants to Study Viability of Mileage-Based Fee for Transpo Revenue

  1. Another John Kerry Flip Flop for Obama. In 2009 he is quoted as saying that he was opposed to this type of taxation. Now in 2011 he is giving the go ahead for a study that will cost 130 million. This system is going to be expensive adding hardware and a whole new agency. Big brothers had deaper in your pocket, how does it feel?

  2. Prius and the Escalade would be charged at the same rate–brilliant. More tax would generated from cars in rural and suburban areas–brilliant. NYC with its mass transit would dodge the bullet–brilliant.

    Not gonna’ happen.

  3. Any VMT needs to be proportional to the weight of the vehicle since the wear and tear on the roads is proportional to the weight of the vehicle. It is grossly unfair to charge a Smart car the same tax per mile as a Hummer.

    I agree with other comments that a VMT tax will be 1) an invasion of our privacy, 2) will require implementation of an expensive technology that is subject to failure and 3) will require a separate bill that has to be sent out, paid and accounted for. It seems apparent that a large portion of the tax collected will have to go towards the overhead required to administer this tax, thus grossly reducing the potential revenue collected.

    In contrast, raising the gasoline tax would 1) require no additional collection costs, 2) require no additional technology 3) at least somewhat reflect the damage vehicles inflict to roads since heavier vehicles tend to use more gas and 4) encourage use of higher mpg vehicles which is what we need anyway in order to get our country off oil. Rasing the gas tax could also be implemented immediately without years of study.

    The only real benefits I can see to a VMT are 1) since people like the novelty of gadgets, the populace may be more amenable to a VMT tax on that basis alone, 2) if they truly base the rates on the congestion level of the area being driven through it could discourage congestion and 3) if they truly base the rates proportional to the weight of the vehicle it could discourage people driving 5000lbs of metal around to get a loaf of bread.

  4. If you read the document referenced in The Hill, you will notice that this IS the 2009 bill, that Obama already opposed. It includes references to FY 2009 revenues. Transportation weekly just brought up the old report and said it was a new idea that Obama was floating. Obama nixed it immediately then, and immediately said that he is not for if now.

  5. Oh my gracious alive. I am 46 and would never had thought I see this as a subject-much less the reasoning. I am a homehealth nurse and I put in 300- 500 miles per week. PER WEEK………

  6. I agree. This is the worst thing I’ve ever heard of and the over head cost would be amazingly high. They need to stick with the fuel tax…

  7.  Will they ever consider cutting spending, rather than more taxation? Obviously not. You ignore the will of the population at your own risk.Will they ever consider cutting spending, rather than more taxation? Obviously not. You ignore the will of the population at your own risk.

  8. Um, Obama’s budget proposal released in February had a lot of cuts to a wide range of programs.  Your comment suggests that you haven’t looked at the facts.

  9. It’s a matter of time, especially with hybrids and all-electric vehicles becoming more common—there’s no reason that a Tesla driving millionaire like David Letterman should be able to use the highways tax-free. I’m sure the fight will be enormous, but the other alternative is to institute a monthly tax on car ownership itself. That’s a REAL non-starter.

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