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LaHood Talks of Mileage-Based Tax, but White House Dismisses Idea

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Until recently, the 18.4-cent-a-gallon federal gas tax had been a steady and growing pot of revenue. Over the past half-century, it has paid for the interstate highway system, which has crisscrossed the nation with asphalt, and since 1982, it has been kicking in for transit needs.

The last time the tax was raised was in 1993, under President Bill Clinton, and inflation has been eating away at its buying power ever since, said Jack Basso, a transportation expert with the American Association of State Highway and Transportation Officials. It hasn't helped that over the past several years, the government has spent more on transportation projects than it has received in gas taxes.

As a result, the federal Highway Trust Fund is essentially bankrupt. Several months ago, Congress added $8 billion to keep it funded through the end of the fiscal year in September. But some transportation experts said the fund will need another $9 billion to make it until then, when the current transportation authorization law expires.

The current system also assumes that Americans will drive more every year. And for many years that was true, with miles traveled increasing about 3 percent a year, Basso said. But when gasoline prices hit $4 a gallon last year, people began driving less. According to AAA, Americans drove 107.9 billion fewer miles in 2008 than in 2007.

The situation has led numerous business and interest groups to call for new ways of funding transportation projects. Last year, the National Surface Transportation Policy and Revenue Commission, which was created by Congress, recommended gradually raising the gas tax by as much as 40 cents a gallon and indexing it to inflation. The panel also recommended looking at a tax based on miles traveled, Basso said.

Such a tax would require equipping every vehicle with a sort of E-Z Pass on steroids. Charges would be based on miles driven, as well as where and when. A rush-hour trip on Interstate 95, for example, would cost more than a midnight drive through the countryside.

In 2006, Oregon undertook a pilot project using a mileage-based system. Global Positioning System units were placed in 200 vehicles, and when motorists filled up at gas stations, the electronic units added a fee of 1.2 cents per mile driven.

"We can see the future, and gas-powered vehicles are going away," said Patrick Cooney, spokesman for the Oregon Department of Transportation. "When that point comes, how do you collect money for your transportation system if your revenues are based on gasoline?"

Cooney said the pilot program proved the viability of a mileage-based system in which drivers would pay at the pump. He said state officials are continuing to look at the system.

A handful of other states have adopted similar pilot projects. All have met with resistance from drivers and privacy advocates.

The concern among privacy advocates is that, instead of just knowing what toll booths drivers pass through, as with the E-Z Pass system, the government would know where and when they were traveling. Many fear that would be a giant leap toward a Big Brother state.

"The danger is dismissing the privacy issues," said Robert Puentes, a senior fellow with the Brookings Institution. "There has to be a good answer to those concerns."

In the AP interview, LaHood also said more toll roads and public-private partnerships need to be part of the funding mix, an idea that was pushed strongly by the Bush administration.


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