With fuel taxes falling, states are charging charging per mile instead of per tank
COLUMBUS, Ohio (AP) — Evan Burroughs has spent eight years touting the virtues of a pilot program in Oregon that would tax motorists based on the distance their vehicle travels rather than on the gas it guzzles, but its own mother still hasn’t agreed.
Margaret Burroughs, 85, said she does not plan to put a tracking device on her Nissan Murano to record the miles she drives to run errands or attend embroidery meetings. She thinks it’s much less of a hassle to just pay at the pump, as Americans have done for more than a century.
“It’s probably a good thing, but on top of everyone else’s stress today, it’s just one more thing,” she said of Oregon’s first initiative in the country, which is run by the state’s transportation department where her son works as a survey analyst.
Burroughs’ reluctance illustrates the myriad hurdles American states face as they experiment with road tax payment programs aimed at one day replacement of motor fuel taxes, which generate less every year, partly due to fuel efficiency and the rise of electric cars.
The federal government is about to test its own such program, funded with $125 million from the infrastructure measure President Biden signed in November 2021.
So far, only three states — Oregon, Utah and Virginia — are generating road tax revenue, despite the looming threat of a widening gap between gas tax revenues and their transportation budgets. Hawaii will soon be the fourth. Without action, the gap could grow to $67 billion by 2050 from fuel efficiency alone, estimates Boston-based CDM Smith.
Many states have taken emergency measures, such as imposing additional taxes or registration fees on electric vehicles and, more recently, adding taxes per kilowatt-hour of electricity accessible from public charging stations.
Last year, Colorado began adding a 27-cent tax to home deliveries from Amazon and other online retailers to help fund transportation projects. Some states are also testing electronic toll systems.
But road use charges—also known as mileage-based user fees, distance-based fees, or mileage taxes—are capturing the bulk of academic attention, research dollars, and legislative activity.
Doug Shinkle, director of the transportation program at the nonpartisan National Conference of States Legislatures, predicts that after some 20 years of anticipation, more than a decade of pilot projects and years of voluntary participation, states will soon have to mandate the programs.
“The driver right now isn’t so much about revenue collection, it’s about getting these systems in place, working out the kinks, getting the public familiar with them and raising awareness around them,” he said.
According to the U.S. Bureau of Labor Statistics, electric car sales in the U.S. rose from just 0.1% of total car sales in 2011 to 4.6% in 2021. S&P Global Mobility predicts they will account for 40% of sales by 2030. while other forecasts are even rosier.
Patricia Hendren, executive director of the Eastern Transportation Coalition, said figuring out how to account for multistate travel is especially important in the eastern U.S., where states are smaller and closer together than those in the west. Virginia’s program, which will launch in 2022, is already the largest in the country and will yield valuable lessons, she said.
Hendren’s organization, a 17-state collaborative researching transportation safety and technological innovations, participated in one of the first pilot projects and eight more since. The biggest hurdle, she said, is educating the public about the dwindling revenues from the gas tax long paid for roads.
“This is about the relationship between the people who use our roads and bridges and how we pay for them,” Hendren said. “We’ve been doing it one way for 100 years, and that way isn’t going to work anymore.”
Eric Paul Dennis, a transportation analyst with Michigan’s Citizens Research Council, said the failure of states to turn years of research into even one fully functional, mandatory program has now raised questions about whether road tolls can really work. .
“There’s no program design I’ve seen that I think can be implemented at scale in a way that’s publicly acceptable,” he said. “That doesn’t mean a program can’t be designed to do this, but I feel like if you can’t even imagine the program architecture resembling something that would work, you probably shouldn’t put too much faith in it set. in it.”
Indeed, a chicken-and-egg dispute over how to proceed in Washington state has hampered road tax efforts there.
Lawmakers last month approved a bill that would have taken the first steps toward a program by allowing voluntary collection of odometer readings from motorists. However, Democratic Gov. Jay Inslee vetoed the measure, arguing that Washington needs a program before it begins collecting personal data from citizens.
States must also grapple with the social and environmental implications of their plans to replace the gas tax, said Asha Weinstein Agrawal, director of the National Transportation Finance Center at San Jose State University’s Mineta Transportation Institute.
The institute has conducted national surveys every year since 2010 and found growing support for mileage-based reimbursements, special rates for low-income drivers and rates tied to how much pollution a vehicle generates, she said.
Weinstein Agrawal said government policies and the way transportation is funded often fail to reflect states’ growing emphasis on reducing carbon emissions as a way to deal with climate change.
“To move to a system that makes it cheaper to drive a gas guzzler and more expensive to drive a Prius,” she said, “seems both symbolically problematic and sending, in the most literal way, the wrong economic incentives to people.”
Evan Burroughs said his 85-year-old father, Hank, who drives an electric car, won’t have to pay a hefty registration fee by participating in the Oregon program, while Burroughs himself paid an extra dollar or two each month for his Subaru outback.
“For me, it’s worth being a part of the experiment,” he said, “and knowing that I’m paying my share for the roads.”
