Vehicle miles traveled tax
A vehicle miles traveled (VMT) tax is a policy of taxing motorists based on how many miles they have traveled.
It has been proposed in the United States and elsewhere as an infrastructure funding mechanism to replace the fuel tax, which has been generating billions less in revenue each year due to increasingly fuel efficient vehicles.
Instead of using a tax on fuel consumption as a way of financing road infrastructure, a VMT tax would charge motorists based on their road usage measured in mileage. A VMT charge is implemented using GPS units on board a vehicle to record distance, assign it to the appropriate taxing jurisdiction, and calculate the amount owed. Only the final billing information would be released outside the unit, to protect privacy. VMT charges could differentiate the charges based on vehicle class, when they drive, where they drive, and the type road surface they drive on.
Since 2000, fuel tax revenues have declined significantly as a result of less driving and increasing fuel efficiency. As fuel tax revenues dwindle, policymakers have had to divert billions from the general fund and other non-transportation funds to pay for infrastructure. This is increasing pressure on transportation policy makers to search for new, viable road financing mechanisms.
In 2007, Oregon conducted a VMT tax pilot project and found that the concept was "feasible."
On February 20, 2009, U.S. Secretary of Transportation Ray LaHood stated that VMT was an idea "that should be looked at." However, in response to Lahood's remarks, Press Secretary Robert Gibbs said that VMT "will not be Obama administration policy."
On February 26, 2009, the National Surface Transportation Infrastructure Financing Commission released its final report, recommending VMT as a means of financing road infrastructure that would eventually replace the fuel tax.
In June, 2009, ITS Institute (RITA), Minnesota Department of Transportation published a research report, "Technology Enabling Near-Term Nationwide Implementation of Distance Based Road User Fees."
In March 2011, the U.S. Congressional Budget Office issued a report comparing the relative merits of fuel taxes, vehicle excise taxes, vehicle tire excise taxes, and a hypothetical vehicle miles traveled tax. It emphasized the disproportionate road wear of cargo trucks versus the current tax rate paid, but noted that costs assessed to this sector would be passed along to the consumer. Also noteworthy was a chart indicating that the excise tax on tires could provide motivation to vehicle owners to reduce many external costs of vehicle travel and road maintenance, but it is currently set far too low to have much effect. The report noted that a GPS-based tax would have a unique trait in allowing taxes to be increased in high congestion zones where tolls are not practical, with the caveat that advances in toll collection technology would mitigate this advantage. The report also emphasized that both tire taxes and vehicle mile traveled taxes would have to be rated based on weight-per-axle to properly distribute wear-related costs of highway use.
VMT charges are unpopular with anti-tax advocates, libertarians, and others. In 2009 the conservative Civitas Institute in North Carolina found that only 21% of voters favored the idea. A two-year trial program of VMT charging completed in 2011 found that just 41% of participants favored the idea beforehand, but after the trial 70% favored it.
Many motorists also are concerned that VMT charging could be an invasion of their privacy, as location information is utilized. They view the program as "Big Brother" or a "Nanny" state. Advocates of VMT charging have sought to address privacy concerns by keeping all location information within the car's on-board unit, and only having the unit release the total dollars owed to each jurisdiction.
Many experts believed in 2009 that it would will take a decade before VMT was implemented.
- Paying Our Way: A New Framework for Transportation, National Surface Transportation Infrastructure Financing Commission Final Report, 2009
- Eco-Friendly Vehicles Draining State Road Repair Budgets - US News and World Report
- Toll Road News article on VMT developments in the US
- Hanley, Paul and Kuhl, Jon. National Evaluation of Mileage-Based Charges for Drivers. Transportation Research Record, 2011.
- Article on the decrease in driving in America
- Where Did the Senate Get the Extra Money to Pay For Its Bill? | Streetsblog Capitol Hill
- Oregon Daily Emerald Article on VMT Tax
- MSNBC article on Obama Administration's views on VMT
- Technology Enabling Near-Term Nationwide Implementation of Distance Based Road User Fees, ITS Institute (RITA), Minnesota Department of Transportation, June 2009
- Former US DOT Bosses Call for Mileage Tax and Congestion Fees | Streetsblog Capitol Hill
- United States Congressional Budget Office "Alternative Approaches To Funding Highways", March, 2011
- A road map to better US roads - CSMonitor.com
- Civitas Poll: Vehicle Miles Traveled Tax Unpopular - Civitas Institute
- CNN article: US President Obama will not pursue mileage tax