Mileage-Based User Fees: Path to a More Sustainable Transportation Future or Privacy Nightmare?

MAP-21, the federal surface transportation authorization bill Congress passed this summer, doesn’t even officially take effect until next month. But a few folks on Capitol Hill are already reportedly talking about what happens when it expires in 2014. Could mileage-based user fees factor into the next authorization and achieving a more sustainable revenue model? And what role are gas taxes, tolling and other revenue mechanisms likely to play at the state and federal levels down the road? Here are a few recent updates.

  • Politico reports today that U.S. Senate Environment and Public Works Committee Chair Barbara Boxer is already looking towards the successor to MAP-21 with the goal of working on a bipartisan basis to find a dependable funding source for transportation. “I really believe that the Highway Trust Fund should be funded through user fees,” she told Politico’s Adam Snider in Charlotte this week. But Boxer said that’s more likely to mean indexing the gas tax to inflation and not a vehicle miles traveled (VMT) fee, as many transportation advocates have long recommended. Privacy remains her main concern with a VMT system. She notes however that even a gas tax indexed to inflation won’t be sustainable as vehicles continue to get more fuel efficient and more Americans turn to electric cars.
  • Interestingly, Politico reported last week that one of Boxer’s Senate colleagues on the Republican side might be open to a VMT system. Senator Chuck Grassley (R-Iowa), who is a member of the Budget and Finance committees as well as the Joint Committee on Taxation, told the newspaper’s Kathryn Wolfe last week in Tampa that his main concern is implementation of such a system, including equipping older cars with GPS to track mileage. But Grassley said he’s not as worried about the potential erosion of privacy some fear if the government were to track the whereabouts of every vehicle. “I think they probably can track us with our cell phones the same way,” Grassley said.
  • Vehicle miles traveled or mileage-based user fees are the subject of two recent articles (see here and here) I penned for the Kentuckians for Better Transportation (KBT) weekly newsletter. KBT is a Louisville-based organization representing numerous transportation interests in the commonwealth.  
  • Further recent reading on VMT/Mileage-Based User Fees:
  • Barron’s reported last month that a federal gas tax increase is likely to be on the table in 2013, regardless of which party is in power after the November election.
  • Iowa Gov. Terry Branstad (R) said recently he could support an increase in the state’s gas tax in 2013 if lawmakers approve property and income tax cuts, The Sioux City Journal reported. A Citizen Advisory Commission last year recommended that the state increase the gas tax by 8 to 10 cents. But Branstad instead had the state department of transportation first explore whether there were any efficiencies that could be achieved in the department’s budget. Iowa was one of the states featured in our recent Capitol Research brief on “Transportation Funding Commissions.”
  • The city of Memphis will consider a one-cent-a-gallon gas tax in a ballot referendum ordinance this November. Revenues from the tax, which are estimated at $3 million to $6 million annually, would go to the Memphis Area Transit Authority, which has been forced to cut bus service in recent months, The Memphis Daily News reported.
  • Los Angeles voters will consider a ballot measure this November that would continue to assess an existing ½-cent sales tax that helps pay for upkeep and expansion of that city’s transit system. The measure would extend the tax for another 30 years beyond its previously approved expiration date in 2039. The extension will allow the mayor to bond against future revenues in order to pay for transportation projects now. The Transport Politic blog has more.
  • Tollroads News reports that Virginia is scaling back its plans to toll I-95. Their application to the federal government reduces the originally proposed two toll points down to just one, which is located along the most lightly trafficked segment of I-95 in the state. The toll revenues collected will now only finance a small portion of needed improvements on the aging interstate.
  • The director of the Ohio Turnpike said recently he supports the controversial idea of using revenues from the toll road to pay for transportation projects elsewhere in the state, something that would require a change in state law, The Cleveland Plain Dealer reported. Ohio is also exploring a lease of the turnpike to a private operator in exchange for an up-front payment among other ideas. On a related note, Gov. John Kasich announced last month that the Ohio Department of Transportation will use a public-private partnership (P3) to design and build the second phase of Cleveland’s Innerbelt Bridge. P3s are also under consideration for the Brent Spence Bridge in Cincinnati, the Portsmouth Bypass in Scioto County, and an I-71 interchange in Delaware County, according to the AASHTO Journal. Ohio became the 30th state to pass legislation allowing P3s in 2011.
  • Last month I blogged about a proposed $2 billion privately funded east-west toll road that could run through rural and central Maine. Gov. Paul LePage subsequently announced that the state will slow work on a $300,000 road feasibility study that was approved by the legislature in their most recent session, The Bangor Daily News reported. Some have expressed concern that the toll road could harm some of Maine’s natural beauty and remoteness.
  • Texas State Highway 130, a 41-mile toll road and I-35 alternative between Austin and San Antonio expected to open this fall, will have the nation’s highest speed limit, the Associated Press reported this week. The Texas Transportation Commission has approved a speed limit of 85 miles per hour.
  • For the month of September, Virginia is offering drivers who open a new E-ZPass account for the 495 Express Lanes two free weeks of travel on the 12-mile toll lanes when they open this fall, Tollroads News reported.