Laura Bollen-Lopez of The Oregonian reports that ODOT is planning to test a new Vehicle Mileage Tax (VMT) program in the fall. VMT is a tax levied on the number of miles a vehicle drives, independent of fuel consumption, weight, or other factors which are captured (somewhat) by fuel taxes or weight-mile taxes. The pilot project, which will involve automobiles driven by various public officials in Salem, involves various tracking devices which would be installed in cars. One option includes a GPS-powered device that would only charge for miles driven on public roads in the state; out-of-state miles and miles driven on private property would not count. Another device, without GPS, would simply detect car movement and charge based on that (presumably at a lower rate; it’s not clear whether the unit counts miles if the car is towed). An earlier pilot program met with some resistance, in large part due to privacy issues. To address that this time, commercial hardware is being used rather than government-provided devices.
The stated purpose of the program is to respond to the loss of fuel tax revenue brought about by higher-efficiency automobiles, particularly hybrids and EVs. Fuel tax revenue has gone down, both because of greater vehicle efficiency, and also because people are driving less, for various reasons. While I don’t consider either a problem, it’s not hard to see why officials in charge of road-building might consider it to be an issue–building and maintaining roads is expensive, and not getting cheaper.
My main thoughts and concerns about this, after the jump:
- My biggest concern is that it might discourage the adoption of EVs and hybrids. While I would prefer a greater shift away from driving altogether, there are people who need to use cars. Much of our built-up infrastructure is transit-hostile, many places aren’t served at all, and many trips (such as freight shipments or deliveries) aren’t appropriate for a bus or train (or a bicycle). To the extent that these trips are made in fuel-efficient and/or low-emission vehicles, this is a good thing.
Tax policy needs to separate two concepts–construction and maintenance of roads and highways, and the environmental damage and other externalities caused by burning fossil fuels. EVs and gas-powered autos (in the same weight class) ought to pay at the same rate for the former; but zero-emission vehicles should not have to contribute to the latter, and low-emission vehicles should be charged less than gas-guzzlers. A system which fails to account for this, and which simply attempts to treat EVs as equivalent to fuel-burning vehicles for revenue purposes, is flawed. - The privacy issues are still a concern. From a civil-liberties perspective, I don’t care so much who makes the device (the private sector is perfectly capable of infringing on people’s liberties), I care about what can be done with the data that is collected. A necessary step would be legislation to put the data collected by government-mandated VMT hardware out of the reach of police, prosecutors, and the courts (other than as necessary to enforce collection of the tax)–much as the network of cameras that ODOT has installed to monitor traffic on the state’s highways are off-limits to law enforcement.
- What safeguards are in place to ensure that VMT tracking hardware is not disabled or removed from automobiles? Odometer-tampering is presently not a common problem, though currently the odometer only has an effect on a vehicle’s resale value–devices used in revenue collection are more likely to be messed with by cheaters.
- It appears that the amendment to the Oregon Constitution which bans fuel taxes being used for anything other than “construction, reconstruction, improvement, repair, maintenance, operation and use of public highways, roads, streets and roadside rest areas” would likely apply to a VMT as well. One other application of this technology, particularly the GPS-enhanced versions, might be the levying of local congestion charges–though whether this is consistent with the Constitutional provision is a good question. My suspicion is that so long the revenue is used for the intended purposes set forth in the state constitution, it doesn’t matter if it’s collected by a VMT, including one which has a time component. Local cities in Oregon are permitted to levy additional fuel taxes of 1¢-3¢ per gallon–giving them the right to likewise charge additional VMT would be a big win if local-government general fund monies dedicated towards roads could be replaced with charges borne directly by road users.
11 responses to “ODOT to launch VMT pilot program in the fall”
I think these concerns are generally misguided. First of all, there is no difference between EVs, hybrids, and gas-guzzlers in terms of the damage they do to the roads. As long as most of the money is spent on maintenance (probably the case given ODOTs massive amounts of debt), I think it makes sense to tax the amount driven rather than fuel consumption.
It is unlikely to have any affect on whether or not people buy fuel-efficient cars. The gas tax is only a small proportion of the cost of fuel, and EVs and hybrids never actually pencil out if you compare fuel savings to the higher cost of the car. People buy them out of a desire to do something good, not out of any economic sense.
You do make a good point that we need a separate system to charge for the pollution externalities of gas-burning vehicles. The appropriate charge for that would be a carbon tax, not a road user charge. It is important to remember that for an externality charge to work, the money raised can’t be funneled back into the system that is causing the externality. A carbon tax should go to the general fund, not directed to the transportation system.
Privacy concerns are not really an issue. Our cell phones already track our every move, and we have laws in place to prevent that information from being sold or used improperly. It is very simple to make sure that the information is encrypted, and many systems actually leave all the information in the car, and only the total mileage to be charged is uploaded elsewhere.
I think it is long overdue to replace the fuel tax with a VMT tax. It will ensure that spending is in line with actual road usage.
I wonder how much case law there is in defining the contours of “construction, reconstruction, improvement, repair, maintenance, operation and use of public roadways”. Certainly, it’s an open-and-shut matter that under present law, the gas tax can’t go to fund the Oregon Health Plan or the state system of higher ed. When the constitutional amendment was passed in 1980, one of the corresponding effects was transfer of funding responsibility of the Oregon State Police from the gas tax to the general fund. The OSP does many things besides highway patrol, but policing the highways is a major function; some states do fund their highway patrols out of road taxes.
Obviously, state law presently outlaws a carbon tax that goes to the general fund, at least as far as motor vehicle fuels go.
The point I’m getting at: Could things like environmental remediation be considered to lie within the gamut of the permitted purposes of the gas tax? Bike and transit infrastructure, if part of a road project, can be funded, though dedicated bikeways and transit lines probably cannot. How much case law is there on what is and is not fund-able with gas tax or VMT revenues?
The problem with environmental remediation is that that means you are treating the gas tax as an externality charge rather than a user fee. It upends the entire political rationale for the gas tax. This is why the constitutional requirement exists and makes sense. It is worth questioning whether the user fee system is a good one (European countries usually fund transportation from the general fund), but that is what we have and I don’t think there is much interest in replacing that concept.
I would hope that a carbon tax would not be subject to these restrictions since it would not be a tax on fuel, but rather a tax on the carbon within the fuel. It’s a very different concept. The tax would most likely be levied directly on refineries, so it’s not like consumers would be directly paying the tax anyway. In addition, estimates of the proper size of a carbon tax to deal with the externalities of pollution and greenhouse gas emissions is on the order of a few cents per gallon. It would not be a huge revenue-generator unless we follow the European model of explicitly treating fuel taxes as a source of general revenue and accepting the higher travel costs that result.
I think that along with the other projects that our National Laboratories are working on, there should be a focus on improving road pavement, too. After all, agencies like NASA, or labs like Oakridge fund all sorts of research. I looked at some of the aeronautical research projects that NASA has funded—with relatively small resources, at least for that department–and ask why not mundane things like road pavement, too?
As I’ve watched a lot of roads being repaved around here, a lot of them didn’t strike me as critical. Nevertheless, according to former engineer, Lynn Peterson, even if the surface is not visibly deteriorated there can be rain seepage down below the surface causing disintegration. But by now there should be some additives that reduce this. I certainly know that, generally, in construction technology there have been huge leaps forward. So why not in road paving?
Fuel tax revenues do have a bleak future. But as fuel economy is improving there will be some other breakthrough, too, such as in traction. I used studded tires regularly every winter on my van, but that was a rear wheel drive. With my front wheel drive car I never even think about it. I suppose tires with traction improving compounds (Blizzak, etc) would be a good winter alternative. And, I don’t know if every automobile driver does the same amount of damage, per mile, to the roadways.
If Ford Motors would combine their 70 mpg diesel—sold around the world, except in the US—with a hybrid system, then revenue agencies would have an even bigger headache. Here’s an example of how Mitsubishi motors is downsizing their electric motors and there’s so much research going on in batteries that the bulkiness of hybrid power systems should be going away:
http://www.greencarcongress.com/2012/03/mits-20120308.html#more
I think that along with the other projects that our National Laboratories are working on, there should be a focus on improving road pavement, too. After all, agencies like NASA, or labs like Oakridge fund all sorts of research. I looked at some of the aeronautical research projects that NASA has funded—with relatively small resources, at least for that department–and ask why not mundane things like road pavement, too?
Tangible road, street, and transportation advances shake out from NASA research already. I don’t think there’s any real argument for retasking our national research labs on such unimaginative avenues. Here’s some hodgepodge I found after searching for five minutes. There’s certainly thousands more examples of contributions to civil engineering.
Here’s a big list of transportation-related spin-offs at NASA.
Scotty, Regarding your middle two concerns, you need only look back to the final report from the trial back in 2006:
http://www.oregon.gov/ODOT/HWY/RUFPP/docs/RUFPP_finalreport.pdf
The devices don’t store any point location at all – at a given moment in time they figure out where exactly you are, log (like a tally mark) the distance travelled in the current “zone” (oregon, not oregon, portland) and then discard the specific location information. At the end of the day, the only thing stored (i.e. which could be retrieved later) is the number of miles driven in each zone.
So yes I guess there is some loss of privacy — i.e. maybe you’re on probation and aren’t allowed to leave Oregon and the device can show that in fact you did — but I think that’s a far cry from a device that “tracks every mile you drive”. That’s far less of an invasion than your cell phone, for example!
IMO: I think the solution here is to pitch to Oregonians as follows –
1) You can do nothing, have no GPS and pay the VMT tax based on odometer readings at fill-ups (i.e. you pay the tax for every single mile driven on your car). At registration we check the amount of tax paid vs. the odometer reading and give you a bill if there is some sort of imbalance.
2) If you want, you can buy a GPS device which will allow you to receive a CREDIT for the VMT tax paid for miles driven outside of oregon. Hell, you can even let the customer turn it on/off, plug it in, unplug whenever they want. If they unplug it when they’re out of state that’s OK — but the device will not log those out-of-state miles, and thus you’re not going to get your tax refund for those miles driven.
Transportation infrastructure budgets need to be divorced completely from gas taxes or efficient vehicles will become the enemy of good transportation facilities. The gas tax should be replaced with a mileage tax that scales with the weight of the vehicle and that fund should be used only for transportation infrastructure maintainence. A new gas tax should then be instituted based on the carbon content of the fuel in order to discourage driving. This fund should not be used on maintenance at all but should be used only for development of cleaner transportation techinologies.
Well, Aaron, if they have the technology, then I hope they start using it. I can think of a number of road surfaces around here that were repaved when there was very little surface damage. I’m just going off what Ms. Peterson told me.. that there is damage below the surface.
Thanks for the NASA list. I wonder what happened to the “RotaPower engine” (2001) which cuts emissions sixfold over four stroke designs. One source I saw on comparable emissions stated that electric vehicles only represent about a 40 percent improvement over gasoline– I suppose due to the reliance on polluting energy sources.
“First of all, there is no difference between EVs, hybrids, and gas-guzzlers in terms of the damage they do to the roads.”
Not true. Weight. I guarantee a 7000lb super-duty truck towing a 15,000 lb camper trailer is doing way more damage to roads than a Fiat 500.
This is why any attempt at a VMT system must take into account weight per axle (and include trailers)… Existing fuel taxes sort of take weight into account as most of the time a heavier vehicle will consume more fuel (not always – it is not a perfect system or we wouldn’t be discussing it here, right?).
That brings up another problem with the VMT ideas… Even with my regular truck, towing my small utility trailer reduces my mileage by a mile per gallon or so. So when I tow something I pay more fuel tax (in principle). With a VMT I would pay the exact same with a trailer as I would without a trailer – although with a trailer I am doing more damage to the roads. My trailer fully loaded only weighs about 2500lbs. What about massive trailers? I have seen campers/toy haulers that come in around 20,000lbs with only two axles being towed with single wheel heavy duty pickups – which means that we have close to 30,000lbs riding on 8 contact patches. How do we address that from a road maintenance perspective? And before someone says that is a rare occurrence I suggest they hit the highways on a holiday weekend and see how rare this actually is. :)
“But by now there should be some additives that reduce this. I certainly know that, generally, in construction technology there have been huge leaps forward. So why not in road paving?”
There is currently no lack of technology, skill, and technique. We can right now make roads that will last almost forever – no matter the weather conditions or vehicles are driven on them. However those kinds of roads cost much more money up-front.
We are penny-wise pound-foolish in this regard. Building a road right costs a lot more money than most people want to see assigned to a project – so to avoid sticker shock most agencies skimp on the initial construction. Preventative maintenance also costs money with no real visible product in return, so it is usually not given priority. You put the two together and it means we get stuck in an infinite loop of constant hacky maintenance. Far more costly in the long run – yet never any one single shocking number on a line item.