Archive | Vehicle Mileage Tax

ODOT to launch VMT pilot program in the fall

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.