Panelists Talk Vehicle Miles Traveled Fee Option for Transportation Financing

Transportation financing experts met in Denver at the 2013 AASHTO Annual Meeting to discuss the idea of a fee on vehicle miles traveled as a means to fund surface transportation. This session featured Jaime Rall of the National Conference of State Legislatures, Jack Opiola of D'Artagnan Consulting, and Jack Basso of the Mileage-Based User Fee Alliance.

Rall set the stage by discussing the funding challenges facing states and the country as a whole. She said that there are major gaps between revenues and expenditures at all levels of government, and that we as a nation are investing about a half to a third of what our transportation network needs to maintain and improve. Gas taxes, Rall said, are not keeping up with transportation funding needs and will continue to provide a gap between what is needed and what is available. In response to the funding challenges that transportation infrastructure faces, states are taking action, according to Rall.

"States have made transportation a policy priority in 2013," Rall said. "There is a need for the federal government to continue to be a strong partner to ensure a strong transportation system and to meet national transportation priorities. But, given the instability, the key question for states really is how they can pay for and provide needed transportation infrastructure in a time of change, of uncertainty, and with or without long-term sustainable federal programs."

One of the primary tools being explored is a vehicle miles traveled fee. Rall said that, since 2008, at least 46 VMT-related bills have been introduced in 18 states, signaling a level of interest in the option.

Opiola also discussed the concept of the vehicle miles traveled fee, or a road usage charge.

"We are in a new age, which is an age of fuel efficiency. We have challenged the auto manufacturers to come forward with more efficient automobiles," Opiola said. "Vehicle miles traveled is increasing (we do talk about them plateauing), we see population increasing which is going to further drive those vehicle miles traveled, and we see gas tax revenues decreasing."

For instance, increasing the gas tax, even if it was accomplished legislatively, sometimes does not have the intended positive impact on revenues, said Opiola, who cited the example of Washington State's 9.5 cent gas tax increase in 2005, which was predicted to generate much more revenue than it actually produced. "The unintended consequences of raising the gas tax had an impact on the amount of revenue they were going to get opposite of what they thought was going to happen," he said.

Basso reiterated the fact that current transportation financing strategy was falling short. To deal with the reality of shrinking revenue alongside greater investment needs, Basso said it would be wise to look at VMT as a viable option, though acknowledging that there are additional revenue options available.

"The question becomes, 'If we need a 21st-century set of collection systems what do we do?'" Basso said. "We could raise the gas tax, and as Jack [Opiola] demonstrated, raising it doesn't necessarily solve the problem, it may actually add to the problem. AASHTO has put out a menu of revenue options, around 33 options, and the point of that was to illustrate that there are a lot of things you can do but they start with the desire to do them. We need a long-term solution, we have these other issues that are impeding the current solution, mileage-based user fees may be the solution."

To wrap up discussion, Basso expressed optimism that VMT could gain some traction if the concept could continue to be advanced with initial assistance by the federal government.

"It is my belief that if federal legislation provided seed money to help the states to move forward [on a VMT fee], they will," Basso concluded. "When they do, they will find that the concerns, from collections to privacy, can pretty easily be dispelled."

 

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