We don’t have a true “user fee” for roads, but our funding policy tries to approximate one. One source of funds for road maintenance is a tax on fuel consumption; the more or less reasonable idea being that the more fuel you’re using, the more wear and tear you are placing on the roads. As fuel efficiency increases, that revenue declines. The Joint Committee on Transportation and Infrastructure Assessment and Solutions was introduced to the concept of a “vehicle mileage tax” (VMT). (See minutes of October 16, 2013 (pdf).)
If fuel efficiency was increasing more or less uniformly for all motorists, the response would be to increase tax per gallon. Sure, you’re “raising taxes” which is scary; but not really. In that situation, you’re just recognizing that you have to increase the ratio to continue to impose the same tax. Just because your vehicle is getting better gas mileage doesn’t mean that it’s doing any less damage-per-mile to the road. But, where there is a disparity in fuel efficiency, altering the ratio would be a tax increase for the less fuel efficient vehicles.
The VMT, on the other hand, would tie the funding to the number of miles traveled by the vehicle. Concerns with that would have to do with making sure some allowance is made for the fact that heavier, more fuel consuming vehicles, cause more wear and tear on the roads; with accommodating a reluctance to GPS or similar technology being imposed by the government for purposes of taxation; and with desires to maintain incentives for people to acquire more fuel efficient vehicles.
Your point is very well taken. I am baffled that the tax is an absolute number (as opposed to a percentage of the sale — as is the case with, say sales tax or typical VATs). If the tax was a percentage, then the higher price of gasoline would increase tax revenue but the consequent higher mileage would balance it out.
BTW, wiki says that only 60% of tax revenues go to highway projects, the rest to earmarks.
Mike Kole says
I would be very much for this- but! My great fear about implementation is that it would require GPS or other means of tracking the vehicle’s movement. Given the sort of spying on citizens we’ve been seeing lately, there is great reason to fear the unintended consequences.
User fees are a very fair way to fund the roads. However, the possible abuses outweigh the benefits.
More fuel efficient vehicles generally do less damage to the road, due to being lighter. Chevy Suburban at 5300 lb. is also twice the weight of a Prius.
almost, not also
I mean, you do make the point in your post. I guess the difference is, are we paying for use of the roads (in which case we would pay by the mile), or are we to pay for the damage we do to the roads (in which case, we would pay by mileage times vehicle weight).
I would argue for damage to the road; because what we’re really trying to do is pay to keep the road in shape. The road has a lot more bicycle miles in it than concrete truck miles.
I suppose some argument could be made for usage in the sense that you might want to recapture initial costs of construction which might be more of a pro rata expense.
Another thought to put into the mix is that electric vehicles and hybrids pay very little gasoline tax. In Oregan they have passed a tax on electric cars. How about dump trucks, semi’s and any other large heavy trucks that destroy the roads.
All this reminds me of the passage in the Godfather (highly recommended! beats the heck out of the movies!) where the New Jersey Don who controls a dump truck company. He would over load all of his trucks so they could wreck the roads, then his street construction company would get the contracts to fix them.
It also puts a huge burden on the poor. Poor people will drive any vehicle they can get or afford. Forget the nice fuel efficient expensive vehicle.They might say I was given or bought a Ford Explorer because it’s cheap and I can get all of my kids in it. Your taxing me more because I can’t afford a honda hybrid!
Another example of how the poor ultimately end up paying more because they can’t afford the upfront costs.
Didn’t the Democrats used to protect the poor? ;)
Lastly cars don’t destroy the roads. The weather does! So root for global warming so you won’t have as much contraction and expansion of the roads. My aunt in California (Huntington Beach) states that roads out there last 20 years or more because of the constant temperature.
One would think that someone with more sense than our Indiana legislature–not a great challenge–would have figured this out. How many areas can we count in which the state doesn’t want to pay for its own services by fairly taxing people who can afford them? Now, the reasons for that are probably obvious to us all, but they are not the right reasons in a society where infrastructure is critical. I just heard this morning that Colorado will use its marijuana tax to help pay for the schools, like we are supposedly using gambling tax to pay for our schools. So that’s how we value our education infrastructure?
I see no need for gps units in cars.
Just require a check-in every year and get miles traveled for the year.
Not perfect but way better than a GPS system.
You can also have scales for each vehicle type, weight, and usage. That way you can charge more for say a dump truck than a motorcycle.
It’s a state tax to pay for state and local roads, so I’d think you would want something that approximates miles driven in the State.
True, but I would think it would be preferable to do something like this than a GPS unit.
I’m sure an actuarial analysis could come up with a reasonable estimate that approximates how many miles an average vehicle class drives in the state.
An interesting edge case is car rental places. This would be one cost that is typically externalized to the renter through gas taxes. A mileage tax wouldn’t be something they could invisibly externalize, it would have to go into the rental fee.
A very complicated subject and can be emotionally charged. The tax on gas is not an easy answer for a variety of reasons including those point out by Doug and others. The distribution of tax revenue raises (for some) a variety of concerns such as taking from the fund for police and the distribution based on cars (not including trucks) as examples. The reality is we all (no matter age or financial status) depend on transportation that uses roads to deliver goods and services (including emergency, etc.) to our community. Yes, the cost of transportation is included in cost of purchasing, but that is not directly related to any cost of government providing the roads and thus no direct payment for upkeep. While it would likely never survive it might be feasible for some payment of taxes for roads that has nothing to do with gas purchases. Many use streets, county roads (perhaps of multiple counties) and state roads to work, play, and shop so it is a complex funding need. Roads just like police and other emergency services are needed by everyone regardless of any personal factors and thus need to be funded in a reasonable manner.