ATLANTA – As cars become more fuel efficient, federal tax revenues for road projects have declined, leaving government officials at the state and federal level looking at whether to levy a mileage tax for motorists to fund infrastructure maintenance and improvements.
According to a recent Government Accountability Office (GAO) report, “most drivers currently pay much less than the full cost of their highway use.” The report, which cited the Congressional Budget Office (CBO), suggested “mileage fees could provide a better incentive for efficient highway use than fuel taxes do because the majority of highway costs are related to miles driven.”
Currently, the federal gasoline tax stands at 18.4 cents per gallon. But, if that tax increased with inflation, the gas tax would be 29 cents per gallon as of 2011, the government contends.
As such, federal gas and diesel fuel tax revenues “have steadily declined in purchasing power … meaning that the 18.4 cents per-gallon tax on gasoline enacted in 1993 is effectively worth about 11.5 cents today,” the GAO said. Therefore, mileage taxes “can lead to more equitable and efficient use of roadways by charging drivers based on their actual road use and by providing pricing incentives to reduce road use,” the agency suggested.
Motorists today pay an average of $96 per year in federal gas taxes. But, a mileage-based tax could cost motorists between $108 and $248 per year, depending on the amount levied.
A 2009 report by the National Surface Transportation Infrastructure Financing Commission found that the nation’s surface transportation system is in a “physical and financial crisis,” and that “if we are to remain competitive in a global economy, we must thoroughly reassess the current approach to funding surface transportation infrastructure.”
Relying on the federal fuel tax “may not be a sustainable strategy in the long run” because “the fuel taxes that are the backbone of the federal transportation revenues will continue to shrink relative to use and needs of the system” as vehicles continue to become more fuel efficient, according to the report.
By model year 2016, federal Corporate Average Fuel Economy (CAFE) standards will require new cars and light trucks to have 34.1 miles per gallon (mpg), up from the 24.1 mpg standard in 2011.
In Wisconsin, one state looking at a mileage tax, the state’s Transportation Finance and Policy Commission recommended a “user pays” approach toward funding transportation. However, Republicans in the state legislature are balking at such a tax.
In a December announcement, the National Highway Traffic Safety Administration (NHTSA) said the federal government wants event data recorders (EDR) — better known as “black boxes” — added to all light passenger vehicles starting Sept. 1, 2014. That has concerned privacy experts, who say the data could be used for nefarious purposes or even to levy additional taxes.
The government said the devices would not collect any personal data.
In 2009, lawmakers in Oregon considered a proposal to start taxing drivers based on how many miles they drive. Late last year, the state started a pilot program in which “40 volunteers will pay a charge for each mile that they drive during the three month pilot, rather than paying the state gas tax,” the state’s DOT said.
The state legislature in Oregon is considering levying a mileage tax for vehicles that average 55 mpg or better. The bill, however, would only apply to cars starting with model year 2015, not current vehicles, according to the state’s DOT.
