No less a personage than House Speaker Paul Ryan explained the issue last year:
Given that, doesn’t it make sense to make up the deficit by either raising the forlorn gas tax (untouched since 1993) or adding a tax on the miles we actually drive, so heavy road users (like interstate truckers) would pay their fair share? It’s called a mileage tax, and a bunch of states are now studying it. The concept, already the law in some parts of Europe, makes sense to me.
Ever since we built the Interstate Highway System, we’ve had a simple principle: user pays. The people who use the highways should pay for the highways—so far, mostly through the gas tax. The problem is, the current user pays system just doesn’t pay enough. Ever since 2008, the trust fund has spent more than it took in. And the reason is simple: People have been using less gas. They’re driving more fuel-efficient cars. You get a lot more miles to the gallon than you used to. And so gas just doesn’t track use as well as it used to.
We have vehicle miles traveled taxes in Hungary, Poland, Switzerland, the Czech Republic, Germany, Austria and Slovakia. New Zealand applies it to heavy trucks and diesels, and France, Belgium and Russia are working on truck systems. In the U.S., it exists only as volunteer pilot programs in Oregon and (for trucks) Illinois. Four states--Delaware, Connecticut, Pennsylvania and New Hampshire--are studying how they might charge drivers along the I-95 corridor, tapping a federal grant.
Let’s step back a bit. According to the Government Accountability Office, only 20 percent of highway repairs are covered by the states—the rest comes from the federal Highway Trust Fund. Because the federal gasoline tax is stagnant at 18.4 cents a gallon (24.4 cents for diesel) the $34 billion it brings in every year just isn’t enough to keep up with the projects that are desperately in need of attention.
We actually spend $50 billion on transportation projects annually, so that’s $16 billion in deficit spending. Meanwhile, 60,000 bridges in the U.S. are substandard, says the Department of Transportation. The American Society of Civil Engineers chimes in that a third of our roads are in bad shape, too.
As PBS points out, this is “troubling” (to say the least) “because a whole lot of people use those bridges and drive those roads. According to U.S. Census data, 86 percent of U.S. workers commuted to work by automobile in 2013. Like the I-35W Bridge, which was built in 1967, about half of the U.S. interstate highway system infrastructure was built in the 1950s and 1960s, and while it was built to last, it was not built to last forever.”
OK, against this backdrop we have politicians acting like demagogues on the issue. Few of them, on either side of the aisle, want to go on record as supporting either a mileage tax or raising the gas tax. Does Paul Ryan, who understands the issue perfectly well, support raising the gas tax? No way.
“I want to make very clear: I’m against raising the gas tax," Ryan said. "There’s not much happening in this economy to help it grow, but lower gas prices is one of them. Working families have been struggling for years to get by. They’ve looked high and low for good-paying jobs. Their paychecks haven’t grown much at all. And now they’re finally catching a break. It would be downright unfair to take that away from them. So we are not raising gas taxes — plain and simple.”
Governing magazine has a good point of view on a mileage tax. Scott Lazenby points out that we expect our cable TV, cell service, water, electricity and gas to function reliably. “We insist on, and pay for, reliable provision of all the basic services,” he said. “Except one: roads and highways. In this area, we are solidly in the third-world camp. What’s wrong with us?”
Lazenby adds, “We have the technical capability now, thanks to GPS, to charge at the gas pump for every mile we use rather than the current practice of collecting a per-gallon tax….[T]he per-mile charge would of course be highest when demand is highest, during peak periods, and lowest in the middle of the night. Rather than denying access to the system, demand would be managed through price signals that would let drivers decide when it is worth it to use the system.”
Carl Pope, the former executive director of the Sierra Club, told me:
That's logical, but politicians hate the word "taxes." What started me off on all this is a local state representative, Gail Lavielle, writing a column in the paper I spill coffee on in the morning. “People in Connecticut just can’t take on one more tax, and on top of that a mileage tax raises too many privacy issues.” She doesn’t like the fact that the state would have to pay $300,000 in matching funds for a mostly federally financed study.
We need a combination of fees and taxes to pay for transportation infrastructure. From a perfect policy perspective, there ought to be a tax on oil, not separate gasoline/diesel/aviation taxes, because oil imposes costs on the economy regardless of where it is used. Then there ought to be a mileage tax, because cars occupy space on roads and create congestion for others, and drivers should pay for that cost and the use of the road. And then there ought to be a significant weight tax because heavy vehicles wear the roads out faster.
My state is strapped, she’s certainly right about that. But assuming the money actually does go to much-needed road and bridge repairs, it benefits (and assures the safety of) all of us—or at least the 86 percent who drive to work. Lavielle, who lived in France, where motorists take a vehicle-miles-traveled ticket on entering the highway then reinsert it when they get off, called me back and made a good point.
“I think any mileage tax would have to be significantly revised and refined from the proposals I’ve seen,” Lavielle said. “And if we did have a mileage tax because people are switching to electric cars and issues like that, it would have to replace the gasoline tax, not be in addition to it.” If she was in Congress representing financially challenged Connecticut, she wouldn’t support raising the gas tax. “If I was representing somewhere else, maybe I would support it," she said.
A rare politician who does want to raise the gas tax is Congressman Earl Blumenauer. “We haven’t made any meaningful adjustment since 1993 to the gas tax, relying on short-term fixes, gimmicks—and no matter how you slice it, adding to the deficit," says Blumenauer, who wants to raise the tax by a mere 15 cents. Good luck getting that through the House.
There is a fairness issue here. Ryan is right when he says that strapped Americans who drive a lot will get hit hard by any new taxes. Either raising the gas tax or doing the mileage tax has that effect. But if there’s a better idea for how to meet our critical obligations to fixing our roads and bridges, I’d like to hear it.
This stuff is agonizing--nobody likes new taxes. But we have to figure it out. Politicians are in office only for a relatively short time, and that’s one reason it’s hard to get support for big-ticket infrastructure. But our roads and bridges are getting really, really bad.