Posted in: Exclusive

National Trend: Support for Taxing Vehicle Miles Grows

Posted on May 6, 2016

National Trend: Support for Taxing Vehicle Miles Grows

Sean Kilcarr | Fleet Owner Publication | Feb 25, 2016

A vehicle miles traveled (VMT) tax “seems to be the lead possibility” in terms of constructing a national mechanism for replenishing the highway trust fund (HTF) going forward, according to Rep. Sam Graves(R-MO), chairman of the Hours of Representatives’ subcommittee on highways and transit.

“Everything is on the table” in terms of ways to generate more funds for transportation infrastructure needs, Graves explained during the American Assn. of State Highway and Transportation Officials (AASHTO) annual Washington Briefing meeting held here in the nation’s capital.

“We’re looking at more tolls – which I am not in favor of – and increasing fuel taxes along with a VMT tax,” he said. “There is some opposition in the House but a VMT tax is still the lead proposal. We should come to a decision [on funding mechanisms] in about a year.”

Though the Obama administration hasn’t supported VMT taxes in the past, the concept is being pilot tested by several states, especially Oregon, with more on the way due to federal funding.

The Mileage-Based User Fee Alliance (MBUFA) noted that Section 6020 of the FAST Actfive-year highway bill signed into law last creates a $95 million grant program for further testing of mileage-based user fees in across the country.

The big question surrounding the VMT tax issue is whether it will replace fuel taxes or be added on top of them, largely because $70 billion of the just-passed $305 billion five-year highway bill came from the federal government’s general revenue fund.

“The concern is how to establish long-term stable funding,” noted Jeff Paniati, executive director and CEO of the Institute of Transportation Engineers (ITE), during a panel discussion following Graves’ remarks.

“There’s $70 billion of ‘pay-fors’ in the highway bill and we have to figure out how to fill that funding hole,” he said, pointing out that mileage fees are one way to account for alternatively fueled vehicles (AFVs) that don’t pay fuel taxes.

“We’re grateful that the FAST Act got passed but we’re not grateful that we side-stepped the funding issue again – we’re relying on gimmicks” like the $70 billion general fund transfer, he said.

Yet Peter Ruane, president and CEO of the American Road and Transportation Builders Assn. (ARTBA), forcefully stressed that, regardless of the ultimate funding solution, more money for transportation infrastructure must be found.

“We need a long-term, reliable and sustainable source of funding,” Ruane emphasized. “The job is not done – not even close. Let’s not kid ourselves; we cannot paper this over. We need more funding.”

He stressed that the one key to making the need for more funding palatable to the general public and to the political establishment in Washington D.C. is to become better “story tellers” about the transportation industry.

“We need to tell the story about the impact of transportation investments on our economy and our quality of life – and frankly, we’ve not done a good job on that,” Ruane said. “We are always moving on to the next project; we don’t stop to measure the benefits of our investments and explain it to the public. Because, if the public understands how transportation benefits them, the politicians will pay attention.”

9 Responses to National Trend: Support for Taxing Vehicle Miles Grows

  1. John Reply

    May 6, 2016 at 11:10 am

    If I am going to pay higher taxes for living out in the country I will demand that my road get paved!!!

  2. bob fulford Reply

    May 6, 2016 at 11:19 am

    To “John”:

    Your road will get paved. The benefit of these proposals is that YOU will pay for the paving, not ME who lives inside the urban service area.

    • John Reply

      May 10, 2016 at 8:24 am

      That is where you are wrong, our property taxes are at the same rate as anyone else. The county has told us flat out that there is no way our area will get paved. The only way it can happen is if 90% of the homeowners agree to pay for it though higher taxes, and since 55% of the homes out here are “bank owned” or rental property – it will never happen.

      • Paul Henry Reply

        May 10, 2016 at 2:12 pm

        A Municipal Services Taxing or Benefits Unit operated at the county level is the solution for paving (higher cost) or stabilizing (lower cost) non-connecting private residential roads that only residents use. They do not require a 90% vote, only a 50% +1. The cost is spread out over time, so it makes good sense to utilize such a program in both poor and wealthy areas. The people that receive the benefit shoulder the cost.

        This should NOT be confused with a “miles driven” FEDERAL tax is collected from everyone and then like housing grants sees a lot of overhead before any benefit is realized.

  3. Franklin Thompson Reply

    May 6, 2016 at 1:19 pm

    There’s plenty of $$$. Get busy and cut the nonsense $$$ out and it will appear…almost immediately.

  4. Rebecca Reply

    May 6, 2016 at 1:32 pm

    Maybe some of the money spent on all the sidewalks built to nowhere (in places where no one ever walks) could have been used for this fund. Or they could use money spent planting huge palm trees at interstate off ramps or reduce the number of street lights that burn for 10 hours every day. They always say “there is such a small amount of money spent on these things.” But add 1,000 of these little expenditures together, it mounts up.

  5. phil Reply

    May 7, 2016 at 6:55 pm

    Let’s let the feds figure it out and other urban areas implement it before we go stepping into dog doo-doo.

  6. Preston Scott

    Preston Scott Reply

    May 8, 2016 at 4:08 pm

    The problem with any of this is if, for example, the county goes with some form of mileage fee it will likely KEEP the gas tax as well. Government just wants more and more money. Remember the bed tax which was increased to collect money for a publicly funded performing arts center? The PAC bites the dust, but has the tax increase? No. The issue is never revenue, but what it gets spent on.

    • Paul Henry Reply

      May 10, 2016 at 2:17 pm

      “…if, for example, the county goes with some form of mileage fee it will likely KEEP the gas tax as well.”
      That’s exactly correct. In a legislative presentation a few years ago, the former DOT Secretary mentioned the VMT as an addition to the gas tax, since people were using less gas.

      Consider that we have government rules such as corporate average fuel economy (CAFE) that adds a lot of cost to making cars. Add to this incentives for hybrids or electric cars. Now since so many people have complied with the “steering” of the government to this type of vehicle (check out the number of Prius in Leon County sometime), the gas tax has fallen off. This is like driving with feet on the brakes and gas at the same time.

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