Racking up miles? Maybe not.

By Ashley Halsey III
Washington Post Staff Writer
Sunday, February 7, 2010; G01

Within a few years, a driver who pulls up to the gas pump may pay two bills with a single swipe of the credit card: one for the gas and the other for each mile driven since the last fill-up.

That may be the result of what many transportation experts see as an inevitable revolution in the way Americans pay for their highways.

The flow of the gas tax pipeline that has poured cash into one of the world's premier highway systems has slowed as some people drive less and others choose more fuel-efficient vehicles. Maintaining that aging network and tackling the rush-hour congestion afflicting most cities will require billions of dollars. As gas tax revenue dwindles, federal and state lawmakers have an option created by innovative new technology: charge the nation's 201 million drivers for every mile they travel.

That prospect was raised last year by a congressional commission, a Brookings Institution report and a highly regarded nonpartisan transportation research group.

In 2008, then-U.S. Transportation Secretary Mary E. Peters warned a Senate subcommittee that the "fuel tax is unsustainable in the future."

"Virtually every economist who has studied transportation says that direct pricing of road use, similar to how people pay for other utilities, holds far more promise . . . than do traditional gas taxes," she said.

But getting the public and its elected officials to accept that idea may be a tough sell.

It is a change that could spark more debate than health-care reform, as federal and state policymakers weigh the use of pioneering technology against expected opposition from those who fear an invasion of their privacy and view paying per mile of road use as a form of taxation.

"Technology is not the limiter," said Ginger Goodin, a senior research engineer at the Texas Transportation Institute who did a major study on pricing. "The decision is in the policy arena. It's entirely up to lawmakers and their constituents."

On the road to change

The need for transformation in the way Americans pay for highways is in large measure the result of what they drive and how much.

Pennies per gallon paid at the pump have provided much of the tax revenue that states and the federal government have used to build and repair 8.5 million lane miles of roadway. Since 1993, the federal government has collected a tax of 18.4 cents per gallon, while state rates range from 8 cents in Alaska to 46.6 cents in California. When the two taxes are combined, Americans pay 46.9 cents on average.

If fuel consumption drops 20 percent by 2017, a goal set by President George W. Bush, gas tax revenue will drop as well. But it could fall far faster. President Obama mandated that new cars get even better mileage -- 35.5 miles on average per gallon -- by 2016, and he designated $2.4 billion in grants for companies developing car battery and hybrid technology.

"As vehicles become more fuel-efficient, revenue from gas taxes falls," said a Brookings Institution report co-authored by Alice M. Rivlin, former director of the Congressional Budget Office. "A more sustainable solution . . . is road-use pricing."

Hybrids coming on the market soon are expected to get more than 100 mpg, and even-lighter vehicles in the near future may reach more than 200 mpg. And the plug-in Chevy Volt, expected in showrooms later this year, can go 40 miles on batteries alone. Why 40 miles? Because two-thirds of Americans drive less than that distance each day. For plug-in drivers, daily gasoline consumption will drop to zero.

By one estimate, cited in a Federal Highway Administration report, hybrids may account for 30 percent of the new cars sold within two years, and they are projected to make up 75 percent of the market by 2025.

If half of America switches from a 20-mpg car to a 50- to 100-mpg car in the next 20 years, much of the tax revenue now used to build and rebuild highways will evaporate.

The most immediate solution to the prospect of declining revenue is to increase gas taxes, but legislators need look no further than last year for evidence that when gas prices rise, people drive less. They're also more motivated to trade sport-utility vehicles for smaller, fuel-efficient cars.

A study in Texas determined that the state might need an eightfold increase in its fuel tax to keep up, and another estimate projected that the state will face a $146 billion shortfall in 20 years unless it finds a fresh source of revenue.

A congressional commission concluded last year that the Highway Trust Fund, into which federal gas taxes flow, "faces a near-term insolvency crisis, exacerbated by recent reduction in federal motor fuel tax revenues." After considering more than two dozen revenue options, including higher fuel and tire taxes, a federal vehicle sales tax, a driver's license surcharge and a general federal sales tax, the commission recommended that the nation transition from a fuel-tax-based revenue system to one "measured by miles driven."

The dramatic need to revitalize the Highway Trust Fund comes as many of the roads built during the suburban boom years four and five decades ago cry out for major overhaul. Five years ago, the U.S. Chamber of Commerce estimated that $222 billion a year was needed to maintain the surface transportation system and that annual funding was falling about $45 billion short of that amount.

'We have the technology'

If the confluence of plummeting revenue, good roads going bad and traffic gridlock resembles the perfect storm, technology may provide an escape route.

The wizardry to switch the highway funding formula from a per-gallon tax to a per-mile tax exists.

A new device linking the technology of a cellphone with a global positioning system unit and a car's on-board computer could be deployed within a few years, experts say.

The first big hurdle that advocates of the transition will face is selling the American public on the belief that a per-mile levy is a replacement for the tax on gasoline rather than a new tax burden.

"Most people don't even know what they pay in gas tax or even what the gas tax is," said Goodin, the research engineer in Texas.

With powerful interests engaged, including civil libertarians and the oil and automotive industries, this debate may become as fierce as the one over health care.

Privacy may be the single biggest issue. Even as Americans think warily about "full-body scan" technology at airports that reveals what's beneath their clothing, many may be leery of technology that would create a record of where they drive.

Existing and developing technology gives the policymakers in Congress and state legislatures many design options, among them the pay-at-the-gas-pump model.

The easiest and most private way to tax people for the miles they drive is to check odometers. The driver knows that the count is accurate, and no one else knows where he has driven.

But there would be no way of knowing which state was owed the tax money. Washington, where commuters routinely cross state lines, is the best example. Such a move also would raise questions of fairness, because heavier vehicles use more gas and are harder on the road.

"People will ask whether a Hummer and Prius should pay the same rate," said Martin Wachs, director of the Transportation, Space and Technology Program at the Rand Corp.

And it would defeat something called congestion pricing -- the notion that people who opt to commute at peak hours or in special lanes should pay more than those who do not. Two examples are the high-occupancy toll lanes being built on the Beltway in Virginia and the variable pricing planned for the Intercounty Connector linking Montgomery and Prince George's counties.

Another option would use a car's on-board computer unit of the type that has been installed since 1996. The unit would keep track of a vehicle's travels, sending the information to a government billing center either in real time via roadside beacons (they might be cellphone towers) or through regular electronic downloads.

Rates for use of different roadways and traveling at peak or off-peak hours of the day would be computed at the billing center. Use of the data also would ensure that each state received revenue for miles driven within its borders.

Customers would be able to review the accuracy of their charges on detailed bills. This approach would eliminate the expense of checking the odometers for millions of vehicles. And if data were streaming in real time, they could be used for additional features, like matching traffic signals to the flow of traffic or providing drivers advisories to help them avoid congestion.

Privacy concerns

A third option -- call it the gas pump model -- would have the on-board unit handle everything but the bill. The OBU would collect data, calculate the amount owed and then transmit that information. It might send it to a government billing agency or just talk to a computer in the gas pump.

"We found there was a preference for that because that's more like what we're doing now," said Goodin, who has conducted focus groups on highway pricing.

The approach would provide far greater privacy, but it wouldn't give the details that would reassure the driver that the bill was correct. It also would require that the OBUs be updated regularly as rates change or more roadways begin billing per mile.

Goodin said her focus group data suggest that some Americans might be more ready to trust a private company with their travel history than the government. In this model, that company would receive the data, provide drivers with an accounting to review and forward only the billing information to state and local taxing agencies.

Those private companies might also market additional services to customers.

"People might say, 'I'll take one of these units if it will give me real-time traffic info and it can be used to pay for parking, and, then, okay, I'll pay for mileage at the pump too,' " Goodin said.

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