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McClatchy Washington Bureau
McClatchy Washington Bureau
National
David Lightman

Congress taking a serious look at taxing miles driven

WASHINGTON _ Take the little black box that's about the size of a fist. Plug it into the data port that in most cars sits under the dashboard. It'll record how far your car is traveling.

Using that information as a potential tool for raising taxes to fund infrastructure is an idea that Democrats and Republicans are seriously discussing.

In Oregon, reading the box is how the state calculates a driver's road usage, which in turn is used to figure a tax on miles traveled. This sort of tax, if expanded nationwide, could be a big way governments pay for all those infrastructure improvements that the White House and Congress are striving to fund.

"That's where we're headed in the future," Rep. Peter DeFazio, an Oregon Democrat who chairs the House Transportation and Infrastructure Committee, said of the idea.

States all over the country are experimenting with different plans, searching for a way of replacing or at least reducing reliance on the gasoline tax. DeFazio supports a nationwide pilot program, and Rep. Sam Graves of Missouri, top Republican on the committee, likes the idea of a vehicle mileage fee.

The gasoline tax is widely seen by economic and transportation experts as a 20th-century anachronism. Vehicles are becoming more fuel efficient, if they're using gasoline at all.

"Everyone understands the gas tax is unsustainable," said Rep. Pramila Jayapal, a Washington Democrat who testified at the committee's infrastructure hearing to urge consideration of a road user fee.

The federal gas tax has been 18.4 cents a gallon and the diesel fuel tax has been 24.4 cents a gallon since 1993. The nonpartisan Congressional Budget Office estimates that revenue from the taxes will drop at a rate of about 1 percent a year over the next decade because of better vehicle fuel efficiency and slower growth in miles traveled.

There is support at the White House and in Congress to raise the gas tax. But even nearly doubling the tax would bring in $515 billion over the next 10 years, far short of the $2 trillion President Donald Trump and Democratic congressional leaders are seeking for an infrastructure package.

So lawmakers are looking for new, out-of-the-box ideas.

"We're going to spend a lot of political capital to do whatever we do whether that's a gas tax or whatever," Graves told McClatchy.

"So my thought is if we're going to spend all that political capital and then we're going to have to turn right back around and change something because the gas tax is so regressive, let's spend the capital and do something different," he said.

Big hurdles remain. To some Republicans, the usage fee is another tax the public does not want.

"Uniformly, they're opposed to it," said Rep. Paul Mitchell, a Michigan Republican and committee member said of his constituents.

Rep. Ben Cline, a Virginia Republican, represents a district that includes Interstate 81, a major north-south route widely used by trucks and tourists. He called the usage fee: "intrusive." Mitchell agreed, saying "It has a Big Brother quality to it.,"

Supporters counter that argument by saying today's electronic devices already can pinpoint where someone is and what they're doing.

"Your car today probably has all of the sensing systems that know exactly where you are at any time," said Rep. John Garamendi, a California Democrat and committee member. "Your cell phone is doing the same thing."

The more vexing questions involve whether such a program can work on a large scale, whether it would be unfair to people in rural areas who travel long distances, and how much revenue it could generate. DeFazio wants such concerns addressed in a nationwide pilot program.

States have been trying out pilot programs, with some federal help. The most extensive so far has been in Oregon, where by most accounts, the state has successfully implemented its OReGO system. But it's limited to 5,000 vehicles.

Launched in July, 2015, volunteers for the program contact private sector contractors certified by the state's transportation department. The private agencies manage drivers' accounts, provide them with the plug-in devices, and send statements each month for miles driven.

Drivers are charged 1.7 cents a mile. Since they are still paying the state's fuels tax at the pump, the bill includes a credit of 34 cents a gallon.

A 2017 report by the state's transportation department found relying on fuel taxes "is simply not sustainable," though it offered no estimate as to how much more could be raised with the usage tax.

What's important at the moment, the report said, is that the OReGO system works, and "since the explosive adoption of smartphones, people are less concerned about privacy and data security."

The Federal Highway Administration in February gave Oregon $950,000 to study ways to expand the system. The state will work with several others, including California and Washington, to share ideas that several states could also use.

The federal government has given a total of $39.9 million in innovation grants for 22 projects in 10 states since the grant program began in fiscal 2016. Missouri got $1.78 million in February to look at "innovative strategies," including a vehicle registration fee.

Missouri's gas tax is 17 cents a gallon, and the state also charges owners of electric vehicles $75 a year and hybrid owners $37.50 annually. The state considers the gasoline tax a true user fee, since only 3 percent of what's collected goes to administrative costs.

But projections are that gas tax collections will shrink, so state officials are looking at alternatives such as having vehicle owners pay a graduated rate based on the fuel efficiency of the vehicle.

Owners of an electric vehicle, which uses no gasoline or diesel fuel at all, could pay a rate set by the legislature, now estimated to be between $175 and $210, to attain parity with the revenues from traditional gasoline- and diesel- powered vehicles. A vehicle that has a miles-per-gallon rating estimated at 29 MPG or less would pay the current flat rate of around $24.

There are potential obstacles, said Michael DeMers, director of innovative partnerships and alternative funding for the Missouri Department of Transportation.

Is it fair to charge people a tax on miles they drove out of state? One answer to all this, said DeMers, is set up a national system to tax road usage.

All these experiments are the way to build support for a gas tax alternative, said Jayapal. "We're not quite at the place where we've gathered all the information to say 'OK, we're ready to expand it,'" she said, "but the first stage has already happened. Now what's the second stage and then the question is, what's the final stage?"

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