Drivers test paying by mile instead of gas tax

Monday, September 24th, 2007

Drivers test paying by mile instead of gas tax:

Beginning early next year, drivers in six states will begin testing a new way to pay for roads and transit: Commuters will be charged for the miles they drive rather than paying taxes on gasoline purchased.

Researchers from the University of Iowa Public Policy Center will install computers and satellite equipment in the vehicles of 2,700 volunteers — 450 each from Austin, Baltimore, Boise, San Diego, eastern Iowa and the Research Triangle region of North Carolina.

Over the next two years, the drivers will get sample monthly bills for the number of miles they’ve driven. They can compare what they now pay in gasoline taxes with what they would have paid in per-mile fees.

“We want to assess the public’s attitudes and acceptance toward a system like this,” says Jon Kuhl, principal investigator on the $16.5 million Road User Charge Study and chairman of the University of Iowa Department of Electrical and Computer Engineering.

The nation is reassessing the way it pays for roads and transit. Since 1956, the Highway Trust Fund, financed by the federal tax on gasoline, has been a primary source of money for highway projects. But the National Governors Association and other groups and planners involved in road building have concluded that this method, supplemented by state gasoline taxes, no longer is adequate.

Americans are driving cars that get better mileage, and more are driving vehicles that use fuels taxed at lower rates than gasoline, such as ethanol, or making their own fuel and not being taxed. That means gas tax revenue isn’t growing nearly as fast as the number of miles driven.

In addition, the costs of road construction materials have skyrocketed because of heavy demand from India and China. Congress and many state legislatures are reluctant to increase gas taxes, especially at a time of high prices at the pump. The federal gas tax of 18.4 cents a gallon has not been increased since 1993; 24 states have not raised their gas taxes since 1997, according to the American Road & Transportation Builders Association.

That has made a mileage fee more attractive to some agencies. The University of Iowa study is funded by the Federal Highway Administration and 15 state departments of transportation.

Oregon this year finished a year-long experiment that tested a “virtual tollway” system that could eventually replace the state gas tax with a road-user fee. Volunteers drove vehicles equipped with state-installed Global Positioning System (GPS) devices and odometers that kept track of the miles they drove. When they gassed up, the drivers paid for their gas as well as 1.2 cents for each mile driven since their last fill-up; they did not pay the 24-cents-a-gallon state gas tax.

Federal, state, and local governments don’t want to increase gas taxes, because they know an increase will be unpopular — so that want to institute a new tax, install GPS units in every car, and track everyone’s movements? Does that seem more politically feasible?

If the government is already mandating fuel-efficiency standards and subsidizing hybrid-electric cars, why would it want to reduce gasoline taxes?

And why would you institute a static 1.2-cents-per-mile tax when the whole point of a “virtual tollway” system is dynamic pricing based on traffic? Driving down a road with no one else on it doesn’t cost anyone anything — except for the pollution that comes from burning gasoline, which won’t be taxed under such a system.

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