RAND report suggests scrapping gas taxes in favor of per-mile levy
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Congress should get rid of fuel taxes and move toward a system that charges road users for the miles they travel, a leading national research organization said Wednesday.
A report by the RAND Corp. explored several different mechanisms for switching to a vehicle-miles-traveled fee, ranging from having motorists self-report their odometer readings to sophisticated onboard devices that track where and how far a driver goes.
A growing body of transportation experts, including two commissions established by Congress, has concluded that the per-gallon gasoline taxes that currently fund the lion's share of highway budgets are obsolete and inadequate.
The 18.4-cent federal gas tax hasn't been increased since 1993, and the advent of more fuel-efficient and alternative-fuel vehicles has further eroded that revenue source, causing the federal Highway Trust Fund to become insolvent.
"Failure to raise fuel taxes in recent years to keep pace with inflation and improved fuel economy has created significant transportation funding shortfalls at the federal and state levels," said Paul Sorensen, lead author of the RAND report.
"The prospect of more fuel-efficient conventional vehicles and alternative-fuel vehicles in the coming decades - though clearly beneficial in terms of the environment and energy security - threatens to make funding challenges worse. Shifting from fuel taxes to mileage-based road use fees would help to overcome this problem, and there are several promising options for implementing such a shift."
Since 1980, the total number of vehicle miles traveled in the United States has doubled but fuel consumption has increased only 50 percent, RAND reported. Charging by miles driven would place the burden for maintaining roads and bridges on those who use them most.
Any transition to a vehicle-miles-traveled, or VMT, fee would have potential drawbacks and might be controversial, the organization acknowledged.
Researchers said three options offered the most promise.
Mileage could be estimated based on fuel consumption. Vehicles would be equipped with an electronic ID tag, and when they are refueled, electronic readers at the pump would calculate the vehicle's fuel economy and determine its estimated mileage based on the gallons purchased. The VMT fee would be added to the purchase price.
The other two options involve using cellular technology or global positioning systems to track a vehicle's travel. The most sophisticated system also could be used to vary the VMT fee based on how many miles are driven during peak times on congested highways. So-called "congestion pricing" - charging more for peak-period travel on crowded roads - has been effective in encouraging drivers to shift their travel to off-peak times and less-congested routes.
The authors noted that systems that trace a driver's whereabouts and travel times would generate privacy issues.
"Even though people's movements can now be tracked to some extent through their cellular phone records, law enforcement officials often need a court order to access that data. Consumers will be understandably concerned about on-board devices tracking their vehicle's position and movement, and will want safeguards as to what kinds of data are recorded and who has access to that information," said Martin Wachs, director of RAND's transportation, space and technology program.
The RAND researchers rejected options that involve self-reported odometer readings or annual odometer inspections as unreliable and too difficult or expensive to administer and enforce.
VMT metering equipment could be phased in as consumers buy new vehicles, Mr. Sorensen said.
Liisa Ecola, another co-author, said there was no guarantee that VMT fees would be any less controversial than increasing gasoline taxes. "However, it's clear that the present system isn't working and fees based on vehicle miles traveled, if properly implemented, could result not only in more money to support the nation's transportation system, but also spread the cost burden in a more fair and equitable way."
First Published February 11, 2010 12:00 am