By-the-mile road tax could replace by-the-gallon federal fuel tax

The most disturbing quality of this story, IMO, is the surveillance grid made possible by GPS devices in every car.

By-the-mile road tax could replace by-the-gallon federal fuel tax
The Kansas City Star

The year is 2020 and the gasoline tax is history. In its place you get a monthly tax bill based on each mile you drove — tracked by a Global Positioning System device in your car and uploaded to a billing center.

What once was science fiction is being field-tested by the University of Iowa to iron out the wrinkles should a by-the-mile road tax ever be enacted.

Besides the technological advances making such a tax possible, the idea is getting a hard push from a growing number of transportation experts and officials. That is because the traditional by-the-gallon fuel tax, struggling to keep up with road building and maintenance demands, could fall even farther behind as vehicles’ gas mileage rises and more alternative-fuel vehicles come on line.

The idea of shifting to a by-the-mile tax has been discussed for years, but it now appears to be getting more serious attention. A federal commission, after a two-year study, concluded earlier this year that the road tax was the “best path forward” to keep revenues flowing to highway and transportation projects, and could be an important new tool to help manage traffic and relieve congestion.

The decision by the 15-member National Surface Transportation Infrastructure Financing Commission was unanimous, which surprised Robert Atkinson, the group’s chairman. But he said it became clear as the commission’s work progressed that a road tax on miles traveled was the best option.

“If you’re committed to the system being improved then it was a no-brainer,” he said.

The commission pegged 2020 as the year for the federal fuel tax, currently 18.5 cents a gallon, to be phased out and replaced by a road tax. One estimate of a road tax that would cover the current federal and state fuel taxes is 1 to 2 cents per mile for cars and light trucks.

The commission said work needed to start soon to prepare for a road tax. But more work has already been done than most people probably realize.

Oregon did a field test in 2007, concluding it was possible to collect a road tax. The University of Iowa’s Public Policy Center — with support from the Federal Highway Administration and 15 states, including Kansas and Missouri — began work a decade ago on how a road tax could be deployed.

Now the University of Iowa, with the help of a $16 million federal grant, is beginning the field test that will eventually include 2,700 vehicles in six states. The vehicles equipped with computers and GPS devices will keep track of the miles traveled and send the data through wireless technology to a billing center that will compute “simulated” tax bills.

“There is a lot of work nationally going on that is beneath the surface,” said Pete Rahn, director of the Missouri Department of Transportation.

Missouri, like the federal government and other states, has been watching revenues from the gas tax decline. Last year that revenue was down more than 3 percent, and so far this year it has declined a similar amount. The state’s highway budget was about to “hit the rocks,” he said, but federal stimulus funds gave it some breathing room.

Even when the economy recovers, the gas tax will remain under pressure.

“The Chevrolet Volt won’t pay a penny of fuel tax,” Rahn said of the electric car that will make its debut next year.

Rahn, past president of the American Association of State Highway and Transportation Officials, said some states have considered implementing a road tax without waiting for the federal government to act, but a national system would probably work best.

Privacy concerns have been raised, and federal legislation also could set limits or otherwise provide safeguards on all the data that could be collected from GPS devices in vehicles. The Iowa study is looking at ways to protect privacy.

U.S. Transportation Secretary Ray LaHood earlier this year said the road tax should be among the options considered for future financing, but he backtracked with a statement that such a tax was not Obama administration policy.

The U.S. commission recommending a road tax believes a measured approach would work best. The federal Highway Trust Fund should be replenished with a higher gas tax as an interim move, the commission said, with work continuing on getting a road tax enacted and deployed.

Congress would have to pass legislation phasing in the tax and settling such issues as whether there should be a higher tax for thirstier and higher-polluting vehicles.

A low-tech approach in collecting the tax could amount to an annual reading of each vehicle’s odometer. A high-tech approach would involve equipping cars and trucks with GPS devices and computers.

The commission favors the higher-tech approach, in part, because far more can be done with it. For example, it could be tailored to help reduce traffic congestion by charging different rates throughout the day. A Brookings Institution study estimated that peak travel could be reduced up to 20 percent if the tax made it cheaper to travel outside of rush hour.

Deb Miller, Kansas secretary of transportation, said a road tax was an issue the federal government would need to take the lead on and help resolve such issues. She is on a National Research Council committee working on a proposal that among other things would ask Congress to consider further study of a road tax and how it could be deployed.

The public will have to be educated and convinced that a road tax is needed, but it is something that needs to be considered, Miller said.

“I thought for a long time the most promising option was going to a vehicles-miles-traveled tax,” she said.

Gas tax gap

•The gasoline tax is mainly divided into federal and state portions. The federal tax is 18.4 cents a gallon. In Missouri, the combined federal and state fuel tax is 35.7 cents a gallon. In Kansas, it is 43.4 cents.

•If current state and national trends and gas tax rates continue, a national commission estimates that in the next quarter-century the U.S. will have only about one-third of the $200 billion needed each year to keep up and improve the highways.

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