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The vehicle miles tax

For all the talk about the need to raise the gas tax in Texas to meet our transportation needs, there is another possible way to do it, which is now under study: The vehicle miles tax.

The Texas Transportation Commission has directed a fresh study of the idea, and it is not alone. There are pilot projects in other states and nationally to gauge how such a tax would work.

Texas transportation officials say the study is meant to help give lawmakers information on options ahead of their next regular session in 2011, when they confront a funding squeeze that is expected to drain the highway fund of money for new construction contracts by 2012.

“We need to think differently about how we fund transportation,” Texas Transportation Commission Chairwoman Deirdre Delisi said at a Texas Taxpayers and Research Association forum in November.

Delisi said the vehicle-miles-traveled tax idea is controversial, but should be discussed because revenue from the state’s main source of transportation funding, the motor fuels tax, is declining. The gasoline tax has not been raised since 1991.

I first heard of this concept back in 2004, and am willing to see what the Texas Transportation Institute’s study will have to say. What’s not clear to me is why this might be any less contentious than a straightforward increase and indexing of the gas tax. I get the technical idea, but I don’t quite get the politics.

Just how a vehicle-miles-traveled tax would be assessed is part of the study. It could be as simple as drivers writing a check when they have their vehicles inspected or could involve in-car technology to more precisely track mileage, perhaps tacking on a charge when drivers fuel up by communicating with the gas pump.

The latter would allow for such things as different charges for rural versus urban driving, and for deductions when people travel out of state, noted Ginger Goodin, the Texas Transportation Institute research engineer leading the study. She said, however, that privacy concerns quickly arise when such technology is discussed.

Again, I’m willing to see what they come up with, but I think we can all see the argument that will be used against “in-car technology to more precisely track mileage”, and it won’t be pretty. Who will be willing to stand up to that, and will they be more willing to fight for that instead of a gas tax increase? That’s the question. EoW and Come and Take It have more.

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5 Comments

  1. Patrick says:

    This proposal may answer the fund-raising issues with the highway fund, but it undercuts the idea the benefits (and incentives) for driving more fuel efficient vehicles…which are usually lighter and and provide less stress on road surfaces.

    I think basing the tax on consumption of fuel is the most straight-forward and is more likely to help reduce foreign fule dependency and air pollution.

    Of course I do drive a Prius so….

  2. Jeb says:

    I think that the calculation is that a broadly applied VMT tax will have less opposition than a straight increase in the fuel tax which will be opposed by commercial vehicle operators. Also, a VMT tax is less subject to erosion as the number of fuel efficient vehicles increases.

    It will be interesting to see how this conversation develops.

  3. el_longhorn says:

    I totally agree with your analysis – I get the policy arguments, but it is bad politics and I don’t see how it is superior to a simple increase in the gas tax. We need to stop re-inventing the wheel and just do what we know works.

  4. Kent says:

    VMT is really a ridiculous idea. Especially when the existing fuel tax already works so well. It’s just too low.

    What are the implementation costs of raising the fuel tax by 10 or 20 cents/gallon? I can’t imagine they would be particularly high. Pumps would have to be adjusted. Some paperwork would have to change. But no big deal.

    Compare that to a GPS-based VMT.

    Cost of the GPS units? Say $100 each x 21 million vehicles in Texas? That comes to a cool $21 Billion (with a B) just for the units.

    Cost of installation? Say $10 each. That comes to $2.1 Billion

    Cost of maintenance and repair? What happens if I take a hammer to my GPS unit and put it out of commission? Do I pay no tax? Every community in Texas is going to need staff to keep these things running properly. Tack on a few more $ billion

    Cost of creating the massive new taxing database to track the driving habits of every Texan in the state? Hundreds of $ millions I would expect.

    Cost of billing every Texan for their miles driven? How would this be done? Through annual registration bills? Through pay at the pump in a parallel system to the gas purchase? Cost of the system alone will be in the hundreds of millions.

    Enforcement costs. GPS just works on the reception of radio signals from satellites. It would be a trivial electronics exercise to build a GPS jamming device from parts available at radio shack. The day such a law went into effect I would expect hundreds of ebay sites popping up with GPS jammers for sale. Put a jammer in your car and the government never knows that your car ever moved. How would Texas possibly enforce this?f

    And if we go with an odometer based system? What is to prevent me from pulling my odometer cable? I would lose my speedometer but I could put in a GPS to replace it.

    Then there are the legal privacy issues.

    If a major crime happens on some street. Could the police subpoena the GPS records to find what vehicles were in the area at that time? Seems like a major temptation for law enforcement to get their hands on these records for endless reasons from terrorism and kidnapping to simple hit-and-run accidents.

    All this because the legislature lacks the cojones to raise the gas tax? And they think the public would rather have every car in Texas tracked by GPS? Someone is dreaming here.

  5. Kent says:

    Oops….my math was off by a factor of 10 but the point remains the same. VMT would be incredibly expensive to implement.