Vehicle Miles-Traveled (VMT) Tax
With a massive infrastructure bill looming as the next item on the legislative horizon, talk of replacing the gas tax in an possibly electric car future with a Vehicle Miles-traveled, or VMT Tax, is coming into vogue.
The Oregon task force put the state at the forefront of the new approach, known as a road-user charge or a vehicle miles-traveled (VMT) tax. The state launched a voluntary program in 2015. Legislators in Salem are considering a bill that would make the program mandatory for new vehicles with a fuel economy rating of 30 miles per gallon or higher starting in 2026.
State Rep. John Lively (D), the bill’s sponsor, said the state has demonstrated that a program can work and that it is time to take the next step.
“If we don’t get the date set certain, we’re never going to get there,” he said.
Utah’s program was launched last year and has enrolled more drivers than Oregon’s. A dozen states are considering legislation this year to update, launch or study programs, including California — where the governor wants to end sales of gas-powered cars by 2035 — and Wyoming.
“We’re in the beginning, the very beginnings of the tangible transitions to this now,” said Douglas Shinkle, transportation project director at the National Conference of State Legislatures. “There’s a lot of palpable excitement.”
At the federal level, the idea of taxing mileage has gained traction in both parties as leaders promise an infusion of spending on transportation infrastructure, even as lawmakers disagree on how to pay the bill.
The federal government has issued tens of millions of dollars in grants to back state projects exploring mileage-based tax programs. A bill that passed the House last year would have set up a national pilot program to tax vehicles by miles driven, and a Senate committee endorsed the idea. The Federal Highway Administration is beginning to explore how a pilot program might work, a spokeswoman said.
Sales of electric vehicles account for about 2 percent of annual new-car sales, with some forecasts projecting that number to grow rapidly.
The 18.4-cent federal gas tax was last raised in 1993. By 2008, Congress was shifting other money into the Highway Trust Fund to make up for shortfalls.
The gas tax brought in about $26 billion and a tax on diesel an additional $10 billion in 2019, before the coronavirus pandemic pushed down the number of miles Americans drove. The Congressional Budget Office forecast in May that gas-tax revenue would decline about 1 percent each year as fuel economy improved and growth slowed in the number of miles driven. At the same time, it projected that transportation-related spending would increase in line with inflation, leaving the highway fund increasingly out of balance…
…Bill Sullivan, executive vice president for advocacy at the American Trucking Associations, said if the idea continues to gather support at the federal level, he could see disagreements arising. Sullivan’s group supports boosting the gas tax before turning to a new way of raising money, but that idea has little traction in Congress…
“VMT has one thing going for it,” he said, “and that’s that it’s not the gas tax.”
I wonder how they deal with drivers who live near borders and spend equal time in both states.Report
I have crap shopping in my state, so I drive the ~40 ish miles into Texas for better shopping, and now this will really make me go “is it worth it or do I mail order yet again” especially if I have to do the accounting myself of “Oklahoma miles vs. Texas miles” and report it
I dunno. How are they gonna keep track of miles traveled? Make us all have snooper devices on our cars? Rely on us to accurately report? Photograph license plates? Just levy an average on people? Every Road A Turnpike?
This is going to hit people who live in remote areas the hardest.
I don’t mind at all paying for road upkeep (if the money *actually* goes to that) but I don’t think this is a good system or an equitable systemReport
This seems like a terrible idea on its face.Report
This is like a Neighborhood Covenant, but, like, better.
Keep those people to the neighborhoods where they work.
I guess the only problem would be domestic help.Report
I really don’t get this.
New Zealand has road-user charges for diesel, but that’s because petrol taxes are intended to pay for roading and a lot of diesel is used for non-road purposes.
Barring that specific case, this looks like a fuel tax with extra steps.Report
People driving electric and other alternative fuel vehicles use the roads, but don’t pay gas taxes. I’m pretty sure that that’s what this is about.
To get incentives right, we’d want to tax both carbon emissions and road usage. So IMO a VMT makes sense, but it should be in addition to a gas tax, not a replacement.Report
Ah yes, electrics that makes sense.Report
It’s also a little bit like the new tax/usage fees the electric companies place on Solar customers for ‘Line Maintenance’ … the concern is that as solar increases, the cost of solar will go up to cover the remaining infrastructure costs. In the case of on-grid Solar, there’s perhaps something to be said for that. But ultimately the cost structures for the infrastructure are tied to metrics that are declining.
So adding a mileage tax could make sense as a cost-neutral funding shift. The interesting thing (more akin to solar) is what happens if road miles decline owing to, say, massively reduced commuter miles as workers work from home. If the reduction in miles results in a commensurate reduction in costs/maintenance it could be a wash… but while some reductions would occur, a lot of maintenance is tied to time/weather and not simply weight/use… so possibly we’ll have to also tax for ‘ghost miles not driven’ — which just means a higher tax for miles, but disproportionate… potentially wiping out the gains of not commuting. I suppose we could tax the rich for our not driving.Report
If the reduction in miles results in a commensurate reduction in costs/maintenance it could be a wash… but while some reductions would occur, a lot of maintenance is tied to time/weather and not simply weight/use…
I’ll push back a little on that last statement. My neighborhood asphalt street wasn’t resurfaced for the 30 years we lived there and was still in good shape. On the nearest interstate highway, same time and weather, the big trucks managed to wear ruts two inches deep in new concrete in much less time than that. It’s fair to blame it on the big trucks, since surface wear is roughly a fourth-power law: increase the weight per axle by a factor of ten and the damage is increased by 10,000. When I lived in New Jersey decades back, I regularly drove on the section of the Garden State Parkway where there was a serious weight limit: 10,000 pounds with significant fines for violations. Surface wear was noticeably less than the parts a few miles away where the big trucks were allowed.Report
Agree with Michael, in that some basic inspections and simple maintenance can keep an underused road/bridge in good shape for a very long time, because the surface doesn’t flex that much unless the earth significantly shifts (and roadbeds/foundations are designed to limit how much of those shifts reach the road surface).
Once you put traffic on it, the surface flexes a lot, and it does so with a (relatively) high frequency, which introduces fatigue stress to the surface. Heavy vehicles increase the amplitude while maintaining the frequency, causing greater fatigue stress.Report
Understood; my point is that it’s a calibration question that I’m not sure is going to be calibrated… that is, if revenues are going down *and* maintenance is going down, then we don’t necessarily have a problem. But, if revenues are going down and the goal is to make sure that revenues don’t go down… then we’ll calibrate for revenues not going down.
But there’s also a problem that revenues go down faster than maintenance goes down… so we have to subsidize the non-use.Report
Is the general amount of upkeep our roads seem to require reasonable? Like, are we being penny-wise and pound-foolish by using cheaper materials that require constant repair/replacement? Is there something better than what we’re using but we don’t use it because it is too costly upfront?
I’m sure it has to do with usage patterns but it amazes me that some roads seem to never need any work while others are basically perpetually broken despite constant resurfacing and such. Is there more at play than just what is driving on them and how often?Report
It depends on local weather, underlying geology, expected usage, actual usage, competency of your local contractors, expected local graft, etc.
Ideally, reinforced concrete is the material of choice. It’s the strongest, longest lasting material we have for road surfaces. It’s also expensive and requires a great deal of work to lay. It’s also more costly to maintain and replace. This is why when you see concrete in use, it’s typically for roads that need the strength due to high use and heavy loading.
Asphalt is perfectly fine for smaller roads, or roads that can be easily re-worked. For example, there is a stretch of I-90 near my house that is asphalt. It’s a high strength asphalt, but still asphalt because when they need to resurface, they can literally resurface the 20 miles of all 6 lanes in about a month, and it’ll last 10 years.
How does it last a decade? Simple, we don’t freeze the way the mid-west or the northeast does. That freeze thaw cycle is bad news. It’s hard on concrete and murder on asphalt. When you think about roads that are constantly in bad shape, look carefully at how well water will drain away from the roads. If the drainage is poor, that road is going to be constantly in need of repair.Report